DirecTV says goodbye to Dora the Explorer, Snookie, and Jon Stewart. Negotiations with Viacom broke down as DirecTV was unable to reach a new fee arrangement.
DirecTV dropped more than a dozen cable networks owned by Viacom including MTV, Nickelodeon, BET and Comedy Central on Tuesday night after the satellite distributor was unable to reach a new fee arrangement with the media giant to continue carrying its channels. Although the two sides are continuing to negotiate, analysts said the dispute could drag on for weeks.
“I think it’s going to take a while,” said Nomura analyst Michael Nathanson. “It shouldn’t have gotten to this level, and it did.”
That means almost 20 million DirecTV subscribers around the country may have to get used to life without “Dora the Explorer,” “Snookie and Jwoww,” “The Daily Show” and other popular programs from Viacom’s networks.
At issue are price increases Viacom wants to extract from DirecTV to keep carrying its cable channels.
“Viacom is pushing DirecTV customers to pay more than a 30 percent increase, which equates to an extra $1 billion,” Derek Chang, DirecTV’s executive vice president of content, strategy and development, said in a statement. Chang argued that the increases are out of line, given declining ratings for many of Viacom’s channels over the last year, including childrens network Nickelodeon.
Chang said the company was willing to keep the popular channels on its systems while talks continued but couldn’t get permission from Viacom.
“Let’s be clear: Viacom took these channels from DirecTV viewers,” Chang said.