The two big media entities deadlocked over competing proposals late Tuesday, when according to DirecTV spokesman Robert Mercer, the satellite provider had no choice but to pull the plug. “They sent us a letter telling us we were obligated to remove the channels at midnight or face legal action,” he says via e-mail, adding that this was “after we formally asked them to keep the channels up while we negotiated past the deadline.”
Mr. Mercer says that Viacom “refused.” The company “had to comply with their demand ahead of the midnight deadline to avoid having any of the channels up past midnight, which again would have violated the terms dictated by their letter," he says. It's not as easy as flipping a switch, he adds: “The process of removing linear and VOD channels takes time."
Viacom declined to comment beyond its blog posts, in which company spokesman Mark Jafar writes, “DirecTV dropped the channels without giving Viacom advanced warning. The last time Viacom was contacted by DirecTV was at approximately 11:00 a.m on Tuesday morning.”
In its official statement, Viacom said: “We are deeply disappointed that DirecTV dropped Viacom’s channels before our midnight deadline this evening, severing our connection with its nearly 20 million subscribers nationwide. We proposed a fair deal that amounted to an increase of only a couple pennies per day, per subscriber, and we remained willing to negotiate that deal.”
Whoever is “right” in this battle, both sides lose, says David Bartlett, senior vice president of Levick Strategic Communications, a crisis management firm in Washington. “This puts the customers in the middle of a corporate fight,” he says. “This is precisely the wrong tactic.”