Viacom and AT&T Negotiate to Avert Major Programming Blackout
25 March 2019 - 4:05AM
Dow Jones News
By Benjamin Mullin and Drew FitzGerald
Viacom Inc. and AT&T Inc. were continuing negotiations to
avert a programming blackout that would leave more than 24 million
pay-TV customers without channels like MTV, Comedy Central and
Nickelodeon, after their earlier contract expired at midnight
Friday.
The negotiations are over carriage of Viacom's networks on
AT&T's DirecTV, U-verse and WatchTV services. As of Sunday,
Viacom's channels were still on the air as the parties continued to
talk.
Such programming-carriage disputes happen periodically in cable
and satellite TV and sometimes are resolved quickly. The fights are
intensifying as cable-TV cord-cutting picks up momentum, pressuring
pay-TV providers to cut their spending on content and prune the
number of networks they offer.
If the standoff leads to a blackout, it would deal a significant
blow to Viacom at a moment when the media company is working to
regain the ground it lost over several years of ratings declines at
many of its cable channels and turmoil in its upper ranks.
AT&T, meanwhile, risks alienating customers who will have to
go without shows like MTV's "Jersey Shore Family Vacation" and
Nickelodeon's "Double Dare." AT&T's DirecTV is already
hemorrhaging subscribers, losing 1.2 million satellite-TV customers
in 2018.
Price is at the heart of the dispute between AT&T and
Viacom. The companies have discussed terms that would result in
Viacom's carriage revenue being reduced, but they disagree on how
sharp the cut should be, according to people familiar with the
matter.
Over the years, cable-TV network owners have typically sought
substantial annual increases in per-subscriber fees, so the
contours of the talks show how much has changed in the industry and
highlight Viacom's weakened position.
Earlier this week, Viacom began notifying customers of a
potential outage, putting a "crawl" on its cable channels and
enlisting network stars like "Daily Show" host Trevor Noah to urge
subscribers to complain to DirecTV. Its talent also made a big push
on social media.
Over the weekend, those campaigns were halted as people close to
the talks expressed optimism a deal was within reach.
In the run-up to the contract expiration date, Viacom accused
AT&T of pushing for unreasonable terms and leveraging its
newfound programming clout to win more favorable terms. AT&T
last year acquired Time Warner Inc., parent of Warner Bros. and
cable networks such as HBO, TBS and CNN.
A spokesman for AT&T last week said that many of Viacom's
channels are no longer popular and called the company a "serial bad
actor" in carriage negotiations.
Beyond price, another issue in the talks is AT&T's push for
Viacom to use advanced TV advertising products from Xandr, the
telecom and media behemoth's advertising group, people familiar
with the matter say.
--Alexandra Bruell contributed to this article.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com and Drew
FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
March 24, 2019 12:50 ET (16:50 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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