TBO.com - TBO is Tampa Bay Online

Deal Blocks TV Blackout

ADVERTISEMENT

The Associated Press

Published: January 2, 2009

Bright House Networks customers won't lose their access to MTV, Nickelodeon and a number of other channels after cable television giant Time Warner reached an agreement early Thursday with media conglomerate Viacom Inc.

The two sides, citing disagreement over fee hikes, had threatened a damaging blackout at a minute past midnight Thursday that would have cut off programming to about 15.7 million subscribers.

"We are pleased that our customers will continue to be able to watch the programming they enjoy on MTV Networks," said Glenn Britt, president and chief executive officer of Time Warner Cable Inc. "We are sorry they had to endure a day of public disagreement as we worked through this negotiation."

Terms of the deal were not disclosed. Details must still be finalized over the next few days, the companies said.

Viacom President and CEO Philippe Dauman said the company was happy a deal was struck. Viacom had mounted an advertising onslaught warning customers of the possible blackout, taking out ads in major newspapers and Web sites, including The Tampa Tribune, featuring a tearful Dora the Explorer and prompting people to call their cable company to complain.

In addition to Time Warner's 13.3 million subscribers, the dispute would have affected 2.4 million viewers on Bright House Networks, which serves most Tampa Bay area communities.

Bright House, a joint venture of Time Warner and Advance/Newhouse Communications, receives its TV programming through Time Warner, so any hiccup with Time Warner would have affected Bright House customers. A spokesman for Bright House said the reaction of local customers to the agreement was positive and that they appreciated the company's efforts to hold the line on costs.

Time Warner CEO Glenn Britt on Wednesday had called Viacom's demand for a 12 percent increase in fees - an extra $39 million on top of the estimated $300 million it pays Viacom annually - extortion and outrageous, given the recession. Viacom countered that the requested increase amounted to an extra $2.76 annually per subscriber.

Viacom had argued that Americans spend a fifth of their TV time watching Viacom shows but its fees made up less than 2.5 percent of the Time Warner cable bill.

Spokeswoman Kelly McAndrew said that despite ranking high in the ratings, Viacom's cable networks' average daily license fee was 65 percent lower than that of networks run by The Walt Disney Co., News Corp.'s Fox, Time Warner's Turner Broadcasting System and Discovery Communications Inc.

Analyst Michael Nathanson of Bernstein Research said Viacom's channels had been "underpriced relative to their peers."

Public carriage fee disputes of this scale between a programmer and a cable operator are not that common, especially when there is a threat of a blackout, said Derek Baine, senior analyst at SNL Kagan in Monterey, Calif. Typically, both sides agree on contract extensions as they negotiate on terms, he said, and any blackouts don't last long because TV operators get calls from outraged customers.

One prominent carriage fee fight was in 2004 between Viacom and EchoStar, the former name of Dish Network Corp. Shows were dropped for two days.

The channels that would have been affected in the Tampa Bay market are MTV, MTV 2, MTV Tres, VH1, Nickelodeon, Comedy Central, TV Land, Spike, Nick Toons, Noggin, Logo, Palladia, VH1 Classic and The N.

Reporter Rich Mullins and editor Dave Nicholson contributed to this report.

Loading Comments...

Email Print

ADVERTISEMENT