Viacom President and CEO Philippe Dauman, sees DirecTV ordeal over as 20 million customers get to view shows like Spongebob SquarePants and The Daily Show again. (Photo : Reuters)
Up to 20 million DirecTV customers can finally enjoy their Viacom channels after the two companies reached a deal, restoring channels such as Nickelodeon, MTV, and Comedy Central.
In the new deal, DirecTV will pay Viacom $600 million a year, a 20 percent increase. The deal will also see Viacom programming on DirecTV's hand-held devices.
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A total of 26 networks for the nine days saw channels like Nickelodeon lose 20 percent of their viewers. Rival channels such as Disney Channel, Disney Jr., and The Hub benefited from Viacom's loss. The Hub saw its total audience increase more than 100 percent, while the main Disney Channel saw a 20 percent jump.
It was only on Wednesday when Viacom's Executive Vice President of Content Distribution Denise Denson said, "I really don't see any end in sight, truthfully. Nothing about negotiating with them is productive."
The two companies have been arguing over terms for a new distribution deal. DirecTV stated the long-term agreement that Viacom is seeking is an increase in value of $1 billion over the previous contract. Viacom dismissed DirecTV's claims.
"We know our customers don't want to pay such an extreme price for an extra channel.... We stand ready and willing to work with Viacom to get this done and, once again, ask Viacom to do the right thing and restore these channels to our customers immediately," said a DirecTV spokesman to the Los Angeles Times.
"The Viacom/DirecTV dispute may be remembered as a critical turning point in programmer/distributor negotiations," said Bernstein Research analyst Todd Juenger in a Reuters report. "For the first time in memory, it was the distributor that won the public relations war."
"The attention surrounding this unnecessary and ill-advised blackout by Viacom has accomplished one key thing: it serves notice to all media companies that bullying TV providers and their customers with blackouts won't get them a better deal," said DirecTV's Executive Vice President of Content Strategy and Development Derek Chang.
After reports of the deal came to light on Friday, Viacom shares were up nine cents at $46.74 on the Nasdaq while DirecTV shares were down six cents at $48.89.