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Viacom to Pull Plug on Spongebob, MTV at Midnight

By - Source: Tom's Hardware UK | B 0 comment

Viacom is at war with Time Warner Cable, and will pull all 19 channels - including MTV, Spike TV, VH1, and Nickelodeon - after midnight.

What it all boils down to is this: Viacom is asking just 23 cents more a month from each Time Warner Cable subscriber, yet the multimedia giant refuses to comply with the increase. 23 cents may not sound like much, but those additional charges stack up to a whopping $35.9 million USD a month. Time Warner is hiding behind a facade defense shield, claiming that it doesn't want subscribers to pay the additional fees.

But let's be realistic here: 23 cents wont even buy a gumball at the local grocery store, and come 12:01 a.m. when kids go into "Children of the Corn" mode when SpongeBob SquarePants is replaced by a black screen, crazed (even bloodied) parents will be trashing local TWC offices because they didn't have a choice in the matter. Actually, Children of the Corn will seem like a Disney movie if Viacom and Time Warner don't come into an agreement.

"The issue is that they have asked for an exorbitant increase in their carriage fees and their network ratings are sagging," said spokesman Alex Dudley, a vice president at Time Warner Cable. "Basically we're trying to hold the line for our customer."

Viacom's "exorbitant" request will increase the fee of each channel between 22 and 36 percent, but Viacom stresses that the request was "in the very low double-digit percentage range." As it stands, the company's fees only take up 2.5 percent of the average Time Warner Cable bill, but according to Viacom, Americans spend more than 20 percent of their TV time watching Viacom shows such as SpongeBob SquarePants, The Daily Show, and even Dora the Explorer.

"We make this request because TWC has so greatly undervalued our channels for so long," reports Viacom in a press release issued yesterday. "Throughout the country, we have negotiated equitable license agreement renewals, or are in the final stages of renewals, with virtually every cable and satellite carrier. Nevertheless, Time Warner Cable has dismissed our efforts."

"We find it a shame that Time Warner Cable remains unreasonable at this time. We hope its leadership will have a change of heart and will seek to negotiate a fair renewal agreement," the company adds.

If negotiations are not made, the following cable channels will go dark tonight at 12:01am: Comedy Central, CMT: Pure Country, Logo, MTV, MTV 2, MTV Hits, MTV Jams, MTV Tr3s, Nickelodeon, Nick 2, Nicktoons, Noggin, Palladia, Spike, The N, TV Land, VH1, VH1 Classic, and VH1 Soul.

Time Warner's Alex Dudley claims that both parties are in negotiations; Viacom says otherwise. However, Time Warner seems firm on its stance. Dudley said that Viacom collects advertising revenue from websites playing reruns of Viacom shows, a good chunk of change Time Warner never sees. "We don't think that's fair," he said. "They're trying to have their cake and eat it too online, where anybody can get it for free."

At the time of this writing, a ticker runs along the bottom of each channel, announcing Viacom's intention to pull the plug after midnight if Time Warner doesn't cooperate. It even asks that subscribers call in to the local office and voice their outrage (whatever).

Bright House Networks, the sixth largest cable television provider, will also drop Viacom channels after midnight as well. "MTV’s demands are outrageous and would force our customers to pay millions of dollars more per year," says BHN's website. "MTV’s networks are not worth so much more today than they were yesterday, especially given the fact that their ratings are mostly declining in recent years. Much of their popular programming is also available for free online. In this economy, we don’t believe it’s appropriate to ask our customers to pay so much more for programming with declining ratings or that's available for free."

Ouch.

While the global economy continues to plummet, Viacom's movement seems more like a means to build a mountain of cash, as Viacom shares recently rose 69 cents, its media network revenue grew 6 percent to $2.1 billion, and the company saw huge numbers generated from the success of its Rock Band franchise. In some ways, it seems fit to tell Viacom where they can shove the TV shows; its 19 less channels for viewers to worry about. Then again, 23 cents a month isn't going to break the bank, so perhaps Time Warner should get off its high horse and let the subscribers decide.

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