Nickelodeon, MTV, Comedy Central, And More Go Dark For Millions

July 11, 2012 | Filed under Entertainment | Posted by

DIRECTV customers receive 17 separate Viacom owned cable channels, including BET, VH1, TV Land, Comedy Central, Nickelodeon, and MTV. As of today Viacom has forced DIRECTV to stop airing all of those channels over a dispurte on licensing fees. Viacom suspended DIRECTV’s right to air the channels to try to make their 20 million customers angry, a fairly common tactic in these type standoffs.

DIRECTV claims Viacom is demanding 30 percent more – more than a billion dollars extra – for this programming. Derek Chang, DirecTV‘s EVP Content, Strategy and Development, told Deadline.com that ratings for channels including Nickelodeon are way down. “I don’t know how you reconcile 20 to 30% declines in ratings with 30% increases in rates, other than the fact that there’s some symmetry going both ways.”

Parents with young kids are sure to feel the heat eventually without the several flavors of the Nickelodeon channels that are now gone. I know at our house we’ve got episodes of most of the kids favorite Nick shows on the DVR, but it this drags on too long the kids are going to get antsy. The good news is that it is summer, which pairs a lack of new episodes with substantially less TV time in favor of outdoor activities.

As much as we like some of those channels, I’m with DIRECTV on this one. They’ve got a good deal with Viacom and they’re trying not to get screwed on this new deal. If they get screwed their customers are going to get that bill…

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Posted by on July 11, 2012.
Filed under Entertainment.
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Doug Johnson is a news junkie and long time blog reader, turned author.

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  • http://www.wizbangblog.com David Robertson

    iBelieve that the title of this post is misleading. Nickelodeon, MTV and Comedy Central are not going dark. Those networks are still in operation.

    • jim_m

      No one said that the networks were out of operation. The point is that Direct TV dropped them due to a fee dispute. That is what the article said and that is what the linked article in the LA Times said. I did not take the headline to be misleading because it specifies that the channels went dark for some people, not all.

      • http://opinion.ak4mc.us/ McGehee

        “Go dark” is generally understood to mean “out of operation.”

        • SCSIwuzzy

          RAAACCCCISSSSST
          /Grumpy

          • http://opinion.ak4mc.us/ McGehee

            You’re lucky I wasn’t taking a drink when I saw that.

      • http://www.wizbangblog.com David Robertson

        iMisread the post title when I responded earlier. Sorry.

  • http://www.shockandblog.com/ Jay McHue

    So basically, these millions of people aren’t losing anything of worth.

  • Guest

    I really sympathize with neither party. Content producers, as a whole, produce a lot of garbage relative to quality programming. The cable and satellite companies, meanwhile, leverage their monopoly over distribution to force customers to overpay for access to content. Meanwhile, both groups conspire together to inflate the cost to consumers by tying desirable products to undesirable products.

    A pox on all their houses.

    • Guest

      This isn’t one of the usual lefty anti-corporate rants. It’s more frustration with the cable companies using their monopoly power to inflate the cost of access.

      Take, for example, a person who likes to watch HBO’s A Game of Thrones . If this person wants access to HBO on TV, this person must pay the HBO subscription fee, which also grants access to programs this person may not be interested in. Perhaps annoying, but the subscription fee is relatively low. Fair enough.

      But this person must also pay for at least a basic cable package before they are allowed access to HBO. Want HD? There’s typically a separate charge for an HD signal (and access to all channels) on top of the basic network access charge.

      Want to watch A Game of Thrones on your iPad? This requires payment to HBO (fair enough), a payment to whoever provides your Internet access (again, a fee for a service, fair enough) …. and a separate payment to your cable company for the basic cable service + HBO!

      • http://www.shockandblog.com/ Jay McHue

        Just wait for the DVDs to be released.

        • Guest

          Netflix rox.

          • http://www.shockandblog.com/ Jay McHue

            Sure. The point remains that people don’t need to be bound to crippling fees if they just practice a little patience. Sure, you won’t be able to talk about the shows with your friends until you are able to view the shows some other way, but that’s a small price to pay to be free of these fees.

        • Conservachef

          I’ve been without tv for three years and the only thing I miss is college football on Saturdays. I can still stream a lot of it online, so I’m not even hurting too much for that. For the little one, dvd’s are the way to go- they can travel with you and you can control the content.

          If providers would offer a la carte options, we’d probably sign up for it, that way we could have the few channels that we would actually watch, and skip the trash.

          • http://www.shockandblog.com/ Jay McHue

            My family has been free of TV for a long time, too. I highly recommend it.

      • http://www.rustedsky.net JLawson

        Some of it is understandable – the infrastructure to get that signal to you isn’t free, or even cheap – and it’s pretty widespread, even if you don’t see much more of it than your local cable outlet.

        “Tubes” by Andrew Blum is a look at it. Your local cable/internet provider is just the first couple of inches on the top of a big iceberg. And that’s not even considering the cost of getting the satellites up for DirecTV and maintaining THAT linkage.

        Add in the fact that there’s a constant upgrade cycle going on, and it’s not terribly hard to understand the price of admission.

        Yeah, a lot of the content is crap. But even crappy content costs something to produce. Should it all cost as much as it does?

        Well, that’s a good question. There’s a lot that I don’t care for – but someone does. I miss the old MTV, where they showed music videos. Comedy Central’s not terribly funny to me, but then I’ve a rather odd sense of humor. Some Nickelodeon stuff is pretty decent (Spongebob, god help me, was pretty amusing – and so is/was I-Carley) but a lot of it is dreck. I can only stand the “Adults are SOOOO stupid and kids are SOOOO smart!” crap for a limited period of time…

        • Guest

          I understand that the infrastructure isn’t free or cheap. And if I’m watching, say, HBO on my iPad, via a hotspot generated by my cell phone, I have no problem paying HBO for the content or my cellphone provider for the infrastructure. They’re part of the transaction.

          My problem is that in order to do this, I also have to pay the cable/satellite company for this privilege when the cable/satellite company, in fact, contributes absolutely nothing to the equation. (If cable/satellite lines are being used to transmit this signal, I would expect it to be built into my cellphone provider’s bill. Essentially, I’m paying a tax to the satellite/cable provider.

          Yeah, a lot of the content is crap. But even crappy content costs something to produce.

          This is an interesting issue, actually. In the last couple decades, the combination of mergers and a decrease in the cost of printing have fundamentally changed the book-publishing industry.

          In the old model, a given publishing house would likely have one or two superstar popular writers, several midlist authors, and a few “literary” authors who wrote high-quality books, but whose work did not sell as well as the popular authors. Because publishers, especially the smaller presses, saw themselves as literary conservators as well as businesses, they would use the profits from their popular authors to subsidize the fees paid to literary authors.

          I’m not going to comment on whether mergers are a good or a bad thing overall, but I will note that a large publishing house, answerable to shareholders, and part of a larger entertainment conglomerate, does not have the luxury of an artistic commitment to literary authors and midlist authors. So it focuses its energy on the superstar popular writers.

          Meanwhile, the decreased cost of producing books means that literary authors and midlist authors, if they and their agents work like dogs, can reach their fans without paying rents to publishing houses. The lower cost of ebooks also means that publishers will focus on getting as much money as they can by selling material from superstar authors.

          Where am I going with this? Disaggregation. Because of a changed business environment, the publishing industry has no choice but to disaggregate its popular authors, its midlist authors, and its literary authors. We can argue about overall quality of the resulting products, but from an economic standpoint, the results are the same: It is now far more difficult to subsidize lower-selling authors by taking profits from higher-selling authors.

          With the advent of YouTube, Netflix, and other forms of online streaming, free-market forces should put pressure on television producers to disaggregate, at least partially. Walking Dead fans are not necessarily interested in subsidizing a Dallas reboot, and Battlestar Galactica viewers are likely less than enthused about the Food Network.

          And do ESPN fans really want to receive the Oxygen network?

          But content producers and content providers mightily resist the pressure to disaggregate. They can do so, while book publishers could not, because of their monopoly power. While the costs to produce and distribute a TV show should theoretically be lower than ever (think Dr. Horrible), the producers and distributers, thanks to their monopoly — a monopoly that is abetted by government, I should add — can use their market power to force consumers to pay for a ton of unwanted programming. And when a consumer does try to disaggregate by subscribing directly to a cable channel’s network through an unrelated medium, the cable companies still collect rents.

          That’s why I don’t like the cable companies. And to a lesser extent, my beef with the content producers.

          • http://www.rustedsky.net JLawson

            “With the advent of YouTube, Netflix, and other forms of online streaming, free-market forces should put pressure on television producers to disaggregate, at least partially. Walking Dead fans are not necessarily interested in subsidizing a Dallas reboot, and Battlestar Galactica viewers are likely less than enthused about the Food Network.”

            But the other aspect of that is that without the revenue from watchers of various things that you or I might have no interest in, there’s little likelyhood that there will be money to make the Walking Dead series. Production of any quality is pretty expensive, on a scale that a writer doesn’t have.
            Admittedly, with new ways of creating content the costs have come down… but you can only go so far (at present) with inexpensive hardware.

            An author doesn’t have much overhead cost, nowhere near the kind that any sort of video production group has. And when you disaggregate the distribution, as in the podcast or Kindle EBook model, you can get a heck of a lot out there that you wouldn’t see otherwise.

            But then another problem arises – how do you find the GOOD stuff? I’ve gotten some stuff for $3 off a Kindle that was excellent stuff, and I’ve paid the same for crap that badly plotted, written, and edited. Both had 4-5 star ratings.

            Youtube’s got something like 60-70 hours of new content posted every minute. Netflix… well, they’ve got a whole lot of content – and a lot of it’s decided b-grade.

            I don’t have any real answers as far as content distribution goes. I think the next 5 years are going to be really interesting on that – we’re going to have to figure how to drink from a firehose at full pressure, and there’s no pressure reducer in sight.

            (Hmm. The idea of the current media distributors as a filtering mechanism might bear some thought…)

          • Guest

            But the other aspect of that is that without the revenue from watchers of various things that you or I might have no interest in, there’s little likelyhood that there will be money to make the Walking Dead series. Production of any quality is pretty expensive, on a scale that a writer doesn’t have.
            Admittedly, with new ways of creating content the costs have come down… but you can only go so far (at present) with inexpensive hardware.

            Different scale, same issue: using money from your hits to finance either risky endeavors that might create a profit, or high-quality artistic endeavors that soothe performers’ egos and appeal to a rarefied audience.

            I recognize that one is less likely to see the Walking Deads without the bundling. And I, like other viewers, am certainly willing to pay the subscription fee that finances both (yech) Sex and the City and The Sopranos. But force me to subscribe to ESPN and Nickolodeon alongside HBO, and I start to have a problem with it — my money paid for ESPN is almost certainly not going to AMC to finance Walking Dead, even if the two channels have the same coprorate parent.

            I submit to you that the providers’ ologipoly and the content creators’ collusion grossly inflate the costs meted out to individual consumers.

            Incidentally, the providers are collectively scared to death of things like Hulu and Netflix. There’s been some talk of converting Hulu over to the same model used by HBOGo, requiring that a viewer be a cable customer before he can view shows on Hulu … even if that person is a Hulu Plus subscriber.

            Cable companies know that consumers don’t like them. And they’re fighting with tooth and nail to prevent the coming revolution in content distribution. But I submit that the providers’ methods are not true free-market methods, but rather anticompetitive practices that leverage their own market dominance in an effort to forestall the technology and thus harm consumers.

          • Guest

            Here’s the sort of thing I’m talking about:

            http://www.theatlantic.com/business/archive/2012/07/the-end-of-tv-and-the-death-of-the-cable-bundle/259753/

            Interesting thing that I didn’t know before: Apparently in this dispute, DirecTV wants to unbundle the channels, but Viacom is that one that’s being obstinate.

  • http://www.facebook.com/people/Doc-Musgrove/100000620620015 Doc Musgrove

    I think this is great as I didn’t watch these channels anyway. Maybe they will be replaced with something decent. At worst it will reduce the number of channels I will have to disregard to find a good program.

  • http://www.facebook.com/people/Doc-Musgrove/100000620620015 Doc Musgrove

    Cartoon network off?? OH crap! It just dawned on me, what will Grumpy do when he is not blogging?

  • Idahoser

    those channels for the most part are the reason I no longer have any paid TV service- I was not going to pay to support companies who use my money to destroy my county. I’m still not going to pay for DirecTV but I’m happy to see those channels lose. Temporarily, of course- they’ll work it out.