Cable Operators

Suddenlink, Viacom Negotiations Reach Impasse

24 Networks Set to Go Dark Tonight 9/30/2014 9:30 PM Eastern
TakeAway

Suddenlink Communications said it will drop 24 Viacom networks at midnight tonight because it cannot reach a carriage deal with the programmer.

After five months of what appears to have been fairly contentious negotiations, Suddenlink Communications has come to an inevitable conclusion: It really, really doesn’t want its MTV. And neither do its customers.

 

Negotiations between the small market operator and the parent of MTV, Comedy Central, BET, Nickelodeon and VH1 have reached an impasse and as of midnight tonight Viacom’s 24 networks will go dark to Suddenlink’s 1.1 million video subscribers. Both sides have cast blame on the other for the impasse. Viacom, in a statement, said it had agreed to accept a previous Suddenlink proposal, which the cable operator later rejected because it didn’t have enough bandwidth, a possible allusion to not having enough additional channel capacity after it had already agreed to sign on dozens of additional replacement networks.

 

“Suddenlink took the unprecedented step of rejecting its own proposal and informed Viacom that it will drop our networks tonight when our deal expires,” Viacom said in a statement. “Suddenlink claimed to Viacom that it had created bandwidth issues that it is unable to remedy.  Inexplicably, Suddenlink has backed itself into a corner and is now unable to accept its own final proposal.”

 

Suddenlink claimed that it was Viacom that had done the rejecting.

 

"Viacom rejected our Sept. 23 offer and declined to give us a best and final offer, as we repeatedly requested,” Suddenlink said in a statement. “Accordingly, this weekend, we entered into long-term contracts with other parties for alternative programming.  Viacom waited until this afternoon to make a verbal proposal that effectively rejected our Sept. 23 offer, once again.” 

 

And though carriage deals typically start off with both parties puffing their respective chests only to reach a deal at the eleventh hour, Suddenlink senior vice president of corporate communications Pete Abel hinted that this time may be different.

 

In an interview, Abel pointed to customer surveys conducted by Suddenlink where the “vast, vast majority do not value the Viacom channels as much as they do other parts of the lineup.” He added that those same customers stated they do not want to pay significantly more for Viacom networks and want other channels added.

 

Viacom, in turn, points to Suddenlink’s own Facebook page, which is littered with comments objecting to dropping the channels.

 

While Viacom has been put on indefinite hold, Suddenlink has done a flurry of carriage deals in the past few months including three in the past two days – with Revolt TV, CBS and RLTV. In addition to those networks, the St. Louis-based MSO has teed up about 20 additional networks to replace the Viacom channels – including OWN: The Oprah Winfrey Network; conservative pundit Glenn Beck’s, The Blaze; Hallmark Movies & Mysteries; Fusion; Game Show Network; MGM Channel, Aspire; and Baby First TV.

 

Suddenlink has said repeatedly that Viacom was demanding a 50% increase in affiliate fees despite falling ratings – the company parroted National Cable Television Cooperative data that showed some Viacom network ratings had slipped as much as 30% in the past.

 

Viacom claims it attracts the greatest share of viewing of any cable programmer, citing Nielsen data that estimates that at any given time, one out of every five cable viewers under the age of 50 is watching a Viacom network. According to Rentrak data, Viacom programming also accounts for one-third of all free video on demand orders by Suddenlink customers.

 

Suddenlink’s stance is reminiscent of another small market cable operator – Cable One – which dropped the Viacom networks in April. Although Cable One claims its subscribers also asked for alternative networks, video subscriber losses at that cable operator have more than doubled since dropping the channels. As for Viacom, it said it will do what it always does in the throes of carriage disputes.

 

“We will inform Suddenlink’s customers about alternate distributors to view our programming,” the company said in a statement

 

  

 

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