Viacom, Time Warner Cable Reach Tentative Deal

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Viacom's cable networks will remain available to Time Warner Cable and Bright House Networks subscribers, after eleventh-hour talks between the media giant and the country's second-biggest MSO resulted in an agreement in principle on carriage terms.


The tentative resolution to the high-stakes carriage dispute was confirmed shortly after 1 a.m. Thursday by both Viacom and Time Warner Cable. However, no details on the agreement were disclosed. The companies said they expect to work out specific terms of the agreement over the next several days.


The deal averted an unhappy New Year's outcome that would have left around 13.3 million Time Warner Cable and 2.3 million Bright House customers without MTV Networks' 19 channels, including Nickelodeon, Comedy Central and MTV.


“We are pleased that our customers will continue to be able to watch the programming they enjoy on MTV Networks," Time Warner Cable president and CEO Glenn Britt said in a statement issued jointly early Thursday morning. "We are sorry they had to endure a day of public disagreement as we worked through this negotiation.”


Viacom president and CEO Philippe Dauman said, “We’ve been partners with Time Warner Cable for a long time, and we’re happy to be renewing that partnership for the benefit of their customers and our loyal viewers. It’s gratifying that we could reach an agreement that benefits not only our audiences but that is also in the best interest of both of our companies.”


On Tuesday Viacom had vowed to yank the channels after Time Warner Cable rejected Viacom's proposed 12% per-subscriber fee hike. The MSO said that would tack on an extra $39 million to the hundreds of millions it already pays the media giant. Bright House was affected in the spat, as it has a deal with Time Warner Cable that lets it take advantage of the bigger MSO's carriage agreements.


Viacom had asked Time Warner Cable for an additional 23 cents per month per subscriber, a demand Britt had earlier characterized as tantamount to extortion. 


"We sympathize with the fact that Viacom’s advertising business is suffering and that their networks’ ratings have largely been declining," Britt said in a statement earlier Wednesday. "However, we can’t abide their attempt to make up their lost revenue on the backs of Time Warner Cable customers." 


Time Warner Cable has more than 13 million video customers in markets that include New York City, Los Angeles, Dallas and northeast Ohio.


MTVN's channels include Nickelodeon, Comedy Central, MTV, Noggin, TV Land, VH1, MTV Tr3s, CMT, Nicktoons, Spike TV, MTV2, Palladia HD and Logo.


Viacom on Wednesday ran scrolling text along the bottom of its channels -- which aired nationwide -- urging Time Warner Cable and Bright House customers to call their cable providers and complain about the impending loss of the networks. That stunt elicited an angry protest from the American Cable Association, which said the crawl confused cable customers who weren't affected by Viacom's fight with Time Warner Cable.


The media company also set up a Web site, IWantMyChannelsBack.com, with the same message and ran a 30-second spot in key TWC markets (click here to watch it).


Viacom claimed that U.S. viewers spend more than 20% of their TV viewing time watching its programming, while its carriage fees amount to less than 2.5% of what Time Warner Cable generates from its average customer. 


In his statement earlier Wednesday, Britt said: "If every channel demanded huge, double-digit increases like what Viacom is trying to force our customers to pay, it would be impossible to keep the price of cable reasonable for our customers."


SNL Kagan analyst Derek Baine, in a research note Tuesday, had predicted the dispute would play out quickly. "Viacom is too big a programmer for Time Warner Cable to lose, and Time Warner Cable is too big a customer for Viacom to lose," he wrote. 


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