DirecTV and Viacom? Let's make a deal

[Bob NC]

So Viacom's advertisers then pass on their increased costs to ALL consumers, not just Viacom channel viewers/DirecTV customers? How is that reasonable, but Viacom refusing to let DirecTV air its shows until an agreement is reached not?

No. Advertisers simply aren't going to take a rate hike from these channels with poor viewership. Why should DirecTv have to suck up a rate hike for underperforming channels?

I'll tell you how it's reasonable, Viacom can't pass along costs to channels that fall by the wayside if they are forced to pay their own freight. If the viewership isn't there, then the channel isn't there either. No more forcing D* to pay for the crappy end of their "bundling".

 

[Bob NC]

They win and D* loses no matter how it plays out.

I don't see how.

Nobody I have talked to in the past week misses ANY of these channels. I have a sneaking suspicion that Viacom will miss the $$$ though.

Nobody who watches Sponge Bob, (with a few exceptions), or MTV is writing a check every month.

 

[Colleen27]

I don't see how.

Nobody I have talked to in the past week misses ANY of these channels. I have a sneaking suspicion that Viacom will miss the $$$ though.

Nobody who watches Sponge Bob, (with a few exceptions), or MTV is writing a check every month.

A lot of parents who have kids who are missing their favorites are, though. I know quite a few people who are looking to change providers if this lasts much longer, mostly the parents of my 3yo's friends (though when I point out that Nick's top programs are all available on Netflix they're all very interested...).

I don't think there are many adults who are hooked on any of Viacom's programming but there are a lot of parents who look at Spongebob or Dora or Diego as a way to take a shower or cook dinner uninterrupted.

 

[sam_gordon]

I just don't see this as believable... It is Viacom's info, and bound to be just as biased as anything coming from D*. We're not paying anywhere near 52% more for DirecTV than we were 7 years ago, and if they're willing to 'fudge the numbers' on that (I suspect by comparing new customer promo rates to undiscounted rates) what reason do I have to believe the rest of their sales pitch?

I have no problems with people disbelieving Viacom's side. I just feel you (general you) should treat both sides equally.

Why do you take this as the truth, but discount the D* version of the truth?

I never discounted D*'s version. In fact, I *PROVED* their version could be true (30% & $1B increase). Coconut claimed Viacom isn't defining their "pennies a day" comment, and that must mean all of D*'s comments must be true. I simply pointed out Viacom *DID* define their "pennies a day".

And DirecTV's position is that if Viacom wants these higher fees, D* should be able to offer the channels ala carte rather than paying "pennies per day" per customer for each and every subscriber on each and every one of their packages. Viacom is calling foul on that, and that's one of the places they're losing the public opinion wars.

D* CAN'T offer the channels ala carte. No provider can. I'm not saying it's technically impossible, it's just the providers make too much money from getting people to go up a package to pick up 1-2 networks they "must" have.

Viacom is posting consistently higher profit margins than D*, and with as price sensitive as consumers are now this issue stands to cost D* a lot no matter how it goes. They'll lose subscribers if this drags on, but they'll also lose subscribers if they raise rates. Meanwhile, Viacom is making money from selling the rights to their programming to the streaming services that are increasingly convincing people to drop cable/satellite. They win and D* loses no matter how it plays out.

The longer it stretches out, the more Viacom loses I think. D* will lose some subscribers over it, but the majority will find other shows to replace what they used to watch on Viacom. So both companies lose.

A lot of parents who have kids who are missing their favorites are, though. I know quite a few people who are looking to change providers if this lasts much longer, mostly the parents of my 3yo's friends (though when I point out that Nick's top programs are all available on Netflix they're all very interested...).

I don't think there are many adults who are hooked on any of Viacom's programming but there are a lot of parents who look at Spongebob or Dora or Diego as a way to take a shower or cook dinner uninterrupted.

Agreed!

 

[Coconut36]

Just to update because there seems to be some confusion on what's been claimed.
On the webpage Viacom set up for this dispute (http://whendirectvdrops.com/), there's a statement. Please note the part I bolded...

So yes, Viacom's "pennies a day" IS "2 cents a day". So yes, those of you "standing firm" against the increase are fighting a $7 PER YEAR increase.

That's the first I have seen from Viacom on it. I call extreme BS on their part though. I have no problem admitting I neither side with them nor do I want to pay so much as a penny more for their channels. Even though my kids were NickJr addicts they have gotten over it and they (Viacom) would be wise to keep that in mind..kids are adaptable. Direct offered us several replacement channels and made Disney Jr available to all starting yesterday..kids move on. The rest of their channels have minimal draw.

I was noticing several websites I was reading had a lot of people siding with Direct (obviously note on the Viacom websites) regarding their refusal and not wanting to pay a cent more. I was just skimming the Viacom FB on this issue and there was an interesting number of supporters for Direct on there..people who voice many of the things others here have said..the content is not worth the increase..even a small one.

Viacom has shown themselves to be untrustworthy to me..part of why I think their claims of 2 cents are heavily manipulated/lies. For example they refer to their channels as 26 when in reality they are double counting and adding the HD channels with the exact same contact in that (channels only a portion of subscribers pay extra to get), they removed their online content (poor service if you ask me), they requested the channels be dropped, and the one that really got me was them using cartoon character images from Nick/Nick Jr like Spongebob and Dora and manipulate the children. Parents have reported that their kids thought Spongebob or Dora were dying. That is just crappy. I imagine if they had a way to raid the DVR boxes of subscribers they would take the shows they have on there away too.

Me..I don't care if it is 2 cents a year..they are utterly not worth it and I would not pay it. I will happily stay with Direct and my kids will adapt. I would hope other parents introduce their kids to new programs/channels and move on.

 

[Sgt Mickey]

Sorry had to share I saw it on fb tonight

 

[kaytieeldr]

I was saying what they SHOULD be trying to do on the new contract, instead of asking for a 30% increase (reportedly) on day one of whatever new deal they want D* to sign now.

Clearly the past is the past, and I made no mention of how the old contract was set up.

And as Sam first surmised, then discovered and linked, Viacom isn't asking for a 30% across the board day one increase.

But a lot of people are quick to buy DirecTV's hyperbole aboutwhat Viacom is asking. The latter is a business, too - and their expenses have increased. Why is it okay for their bottom line to shrink, but not DirecTV's (if that satellite company chose to pay the higher rate but not pass the [entire] increase on to subscribers?

 

[Coconut36]

And as Sam first surmised, then discovered and linked, Viacom isn't asking for a 30% across the board day one increase.

But a lot of people are quick to buy DirecTV's hyperbole aboutwhat Viacom is asking. The latter is a business, too - and their expenses have increased. Why is it okay for their bottom line to shrink, but not DirecTV's (if that satellite company chose to pay the higher rate but not pass the [entire] increase on to subscribers?

I think the issue for many of us is that Viacom offers little to no value. It's one thing if you are a premium channel or offer value..Nick/Nick Jr, MTV (for the Jersey Shore, Teen Mom crowd) and Comedy Central garner the most attention. For me that isn't worth an increase and it's not like I have the option of declining their channels if I am not interested..I am stuck with channels that don't offer much (and this isn't just my personal issue..most of their channels have dropping ratings and viewers and offer Direct little value).

 

[Colleen27]

And as Sam first surmised, then discovered and linked, Viacom isn't asking for a 30% across the board day one increase.

But a lot of people are quick to buy DirecTV's hyperbole aboutwhat Viacom is asking. The latter is a business, too - and their expenses have increased. Why is it okay for their bottom line to shrink, but not DirecTV's (if that satellite company chose to pay the higher rate but not pass the [entire] increase on to subscribers?

First, because many D* subscribers just don't see Viacom's programming as worth paying more for. You justify price increases with higher ratings and programs that can't be seen elsewhere, not with declining numbers and numerous free or low-cost ways to access the same content.

Second, because Viacom is posting better profit numbers than D*, and is well positioned in their field while D* is fighting to retain their share of a shrinking market. Viacom is out-earning D*, in part because they've watered down the value of their programming in a cable package (and the desirability of cable/satellite as a whole) by licensing hit shows to streaming services, and now they're looking to D* to pay more at the same time that they're losing subscribers to those alternatives.

 

[kaytieeldr]

Q1 2012 results for Viacom and DTV:

http://online.wsj.com/article/SB10001424052702304746604577381680490480266.html
Partly because of a one-time tax benefit, [Viacom's] fiscal-second-quarter profit rose to $585 million, or $1.07 a share, compared with $376 million or 63 cents a share, a year earlier. The tax benefit accounted for $66 million, or 12 cents a share in the latest period.

Revenue increased 2% in the quarter to March 31.

http://mobile.reuters.com/article/idUSL1E8G81KO20120508?irpc=932
DirecTV's net income rose to $731 million, or $1.07 per share, compared with $674 million, or 85 cents per share, a year earlier. Its EPS beat Wall Street analyst estimates by a penny, according to Thomson Reuters I/B/E/S.

Revenue rose 12 percent to $7.05 billion, narrowly missing analysts' estimates of $7.06 billion.

The company's shares closed 12 cents, or 0.26 percent, higher at $48.03 per share.

So with these numbers, from Wall Street Journal and Reuters respectively (versus the disputing companies), it's hard for me to understand how Viacom is outlearning DirecTV.

 

[Albort]

I think the issue for many of us is that Viacom offers little to no value. It's one thing if you are a premium channel or offer value..Nick/Nick Jr, MTV (for the Jersey Shore, Teen Mom crowd) and Comedy Central garner the most attention. For me that isn't worth an increase and it's not like I have the option of declining their channels if I am not interested..I am stuck with channels that don't offer much (and this isn't just my personal issue..most of their channels have dropping ratings and viewers and offer Direct little value).

another issue i can see is that a lot of these contents are already free online. Netflix, Hulu, all carry these contents, not to mention their own websites.

So i can see why DirectTV being pain in the butt about not wanting to pay more, why pay more when all these contents are already free online or part of Hulu/Netflix.

I think Viacom needs to adapt to whats popular. Similar to RIAA/MPAA... stuck with an old business model.

just my 2 cents.

 

[sam_gordon]

Me..I don't care if it is 2 cents a year..they are utterly not worth it and I would not pay it.

First, because many D* subscribers just don't see Viacom's programming as worth paying more for.

THAT's a valid argument in my mind. Why did it take so long to get here? We've had 10 pages of "Viacom is lying", "Viacom isn't disputing D*'s claims", "$1B is too much to ask for", "30% is too much".

You justify price increases with higher ratings and programs that can't be seen elsewhere, not with declining numbers and numerous free or low-cost ways to access the same content.

I understand what you're saying, but I don't think it's 100% accurate. Sometimes you need to increase prices because the cost of business has gone up.

 

[sam_gordon]

So with these numbers, from Wall Street Journal and Reuters respectively (versus the disputing companies), it's hard for me to understand how Viacom is outlearning DirecTV.

Stop using facts kaytiee, they confuse the issue.

 

[sam_gordon]

I think the issue for many of us is that Viacom offers little to no value. It's one thing if you are a premium channel or offer value..Nick/Nick Jr, MTV (for the Jersey Shore, Teen Mom crowd) and Comedy Central garner the most attention. For me that isn't worth an increase and it's not like I have the option of declining their channels if I am not interested..I am stuck with channels that don't offer much (and this isn't just my personal issue..most of their channels have dropping ratings and viewers and offer Direct little value).

DIRECTV (and all other cable/sat providers) DOES THE SAME THING. I don't feel like looking it up right now, but you MUST get channels in "blocks", and pay for all of them, whether you watch them or not. There is *NO* ala carte system.

I'm not interested in any of the news channels (MSNBC, CNN, Fox News, etc), but I'm still paying for them because I have to to get the channels I *DO* want.

That's been my biggest issue with this thread, holding the two entities (Viacom & DirecTV) to different standards.

FWIW, if it was me, although the programming on Nick isn't that good (I'll agree with that), it would still be worth $7 a year.

 

[FlightlessDuck]

Nobody I have talked to in the past week misses ANY of these channels.

Wait until Colbert and Stewart come back from vacation. Unless, of course, they are going to be available on Hulu.

 

[pat fan]

Wait until Colbert and Stewart come back from vacation.

I'd rather gauge out my eyes than watch either of them! Not everyone loves these guys. I don't miss one channel that has been turned off. Lower my bill a few bucks and let Viacom stay off air (on D*).

 

[rgf207]

I'd rather gauge out my eyes than watch either of them! Not everyone loves these guys. I don't miss one channel that has been turned off. Lower my bill a few bucks and let Viacom stay off air (on D*).

I do miss some of the channels that have been cut off and I don't have a problem paying the $7 per year proposed hike

 

[sam_gordon]

I'd rather gauge out my eyes than watch either of them! Not everyone loves these guys. I don't miss one channel that has been turned off. Lower my bill a few bucks and let Viacom stay off air (on D*).

Let us know how that works out for you. Think about this... I'm assuming, based on what both sides have put out, the old contract had D* paying Viacom ~$1.80/month/subscriber. Someone please let us know if D* lowers the bills by that amount.

 

[pat fan]

Someone please let us know if D* lowers the bills by that amount.

Well, I'm pretty sure they WON'T lower our bills, but I would actually prefer not to have some of those channels on my tv either way.

Yes, that is just my opinion and I know some people DO want them as a choice, but whether they lower my bill .50 or $5.00 or not at all, I won't really care if I don't have to mess with blocking channels.

 

[sam_gordon]

Well, I'm pretty sure they WON'T lower our bills, but I would actually prefer not to have some of those channels on my tv either way.

Yes, that is just my opinion and I know some people DO want them as a choice, but whether they lower my bill .50 or $5.00 or not at all, I won't really care if I don't have to mess with blocking channels.

I'm sure the bills won't go down either. I just think it's funny there are people claiming Viacom is "greedy" by asking for all this money, but there's no criticizing of D* for NOT lowering the bills.

Like I said, let's hold BOTH entities to the same standard. I have no problem with D* telling Viacom "we don't think your programming is worth the extra money". I have no problem with subscribers saying "we don't think the programming is worth the extra money". I *DO* have a problem with people who are claiming Viacom is greedy or is "just trying to get more money" when that's EXACTLY what D* is doing.