Time Warner, Viacom reach cable channel deal
BY STAFF AND WIRE REPORTS
In an 11th-hour agreement, Time Warner Cable said it has reached a deal with Viacom Inc. that would avoid a threatened blackout of 19 cable channels in a spat between the two media giants over how much the cable company pays to carry channels such as MTV and Comedy Central.
Time Warner, the nation’s second-largest cable operator, had proposed an increase in what it pays for Viacom’s channels, but the offer initially was rejected as “a pittance,’’ said Viacom spokeswoman Kelly McAndrew.
Blackouts of shows such as “SpongeBob SquarePants’’ and “The Colbert Report’’ loomed for Time Warner’s 13.3 million cable subscribers. Time Warner serves 110,000 subscribers in Lincoln and Southeast Nebraska.
Shortly after agreeing to extend a midnight deadline by an hour, Time Warner Cable spokesman Alex Dudley said the sides agreed on a new contract.
Details of the deal were not immediately available.
John Peterson of Lincoln, a father of four boys ages 3 to 11 who watch “SpongeBob SquarePants” on Nickelodeon, wasn’t happy with Viacom’s threat to pull several of its channels from the Time Warner Cable system.
He called Time Warner and Viacom on Wednesday to complain, only to have both companies tell him to call the other one.
“I found it very frustrating,” he said. “These companies are playing games with their customers. That’s what got me upset.”
Time Warner Chief Executive Glenn Britt on Wednesday called Viacom’s demand for a 12 percent increase in fees — an extra $39 million on top of the estimated $300 million it pays Viacom annually — extortion and outrageous given the recession. Viacom countered that the requested increase amounted to an extra $2.76 annually per subscriber.
“We sympathize with the fact that Viacom’s advertising business is suffering and that their networks’ ratings have largely been declining,’’ Britt said. “However, we can’t abide their attempt to make up their lost revenue on the backs of Time Warner Cable customers.’’
Viacom had planned to run TV ads starting today on local broadcast stations blaming Time Warner Cable for any blackout of channels. Viacom began putting Time Warner’s toll-free telephone number Tuesday night on a crawl on its networks, asking subscribers to demand the cable company keep Viacom’s channels.
Dudley said the advertising campaign was a sign Viacom had been preparing for a damaging shutdown.
Viacom said Americans spend a fifth of their TV time watching Viacom shows, but its fees make up less than 2.5 percent of the Time Warner cable bill.
McAndrew said that despite ranking high in the ratings, Viacom’s cable networks’ average daily license fee is 65 percent lower than that of networks run by The Walt Disney Co., News Corp.’s Fox, Time Warner Inc.’s Turner Broadcasting System and Discovery Communications Inc.
Analyst Michael Nathanson with Bernstein Research said Viacom’s channels had been “underpriced relative to their peers.’’ He expected a settlement relatively quickly.
“Both sides may not want to see if this battle results in mutually assured destruction, as Viacom loses ad dollars and Time Warner Cable loses subscribers,’’ he wrote in a research note.
Public carriage fee disputes of this scale between a programmer and a cable operator are not that common, especially when there’s the threat of a blackout, said Derek Baine, senior analyst at SNL Kagan in Monterey, Calif. Typically, both sides agree on contract extensions as they negotiate on terms, he said, and any blackouts don’t last long because TV operators get calls from outraged customers.
But this time, Time Warner Cable faced Viacom, the largest cable programmer.
“It’s a must-have,’’ Baine said. “That’s probably why Viacom is playing hardball.’’
The channels that would have been affected in Nebraska are Nickelodeon, MTV, VH1, Noggin, TV Land, Comedy Central and Spike on the basic cable tier (Channels 2-80) and LOGO, Nicktoons, The N, MTV2 and VH1 Classic on the digital tier.
Programming from those networks on Time Warner’s on-demand channels also would have be affected.
Viacom networks CMT and BET are part of a different carriage contract, according to local Time Warner spokeswoman Ann Shrewsbury.
“We understand (our customers’) concerns,” Shrewsbury said earlier Wednesday. “We’re going to continue to negotiate aggressively on their behalf for fair and reasonable rates.”
Shrewsbury said subscribers jammed phone lines nationwide on Wednesday. Locally, many more worried customers journeyed to Time Warner’s offices for answers.
One of those was Lincoln’s Deena Saddler, a mother of three children ages 2 to 10. She said her children watch Nickelodeon and Noggin. She’s a regular MTV and VH1 viewer.
“Really, for me, by not having those channels, there’s no point of me having cable,” she said. “I’m really hoping (the negotiations) don’t take long.”
Shrewsbury said Wednesday night that Time Warner was prepared to offer alternative programming should a blackout occur, but after receiving news of a “handshake deal” with Viacom, she expressed her relief that negotiations apparently were over.
“We appreciate our customers’ patience and understanding,” she said.
Journal Star reporter Jeff Korbelik contributed to this report.

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Teach you how to cut out the middle man, careful TW most all of your programmers content is online, you may teach your customers how to live without you.
If we could only get high speed internet without cable...
Goodbye TWC. "
Why don't they have the NFL network or Other programs that people want. But no they just fill it with Shopping from He00. Great idea "
As someone who needs to stick with Time Warner I say drop the Viacom stations, we don't watch them anyway. "
Wow, the hits just keep coming from Time Warner. How do they even have a customer base left in Lincoln after their 'navigator' fiasco? They consistently overprice and underdeliver...a combo like that won't last forever, no matter how loyal you think Nebraskans are. You have choices people, time to take a look elsewhere. "
that would truly be the final straw "
Bye-Bye. Dish sounds like a good option along with Windstream internet. "
If they got rid of the Discovery channel types, then I might care, but I applaud TWC for standing firm against a price hike. Don't kid yourselves folks, if Viacom raises their rates, the others will do, and what started off as a $.23 hike, will snowball into something MUCH higher... and don't think that the satalite providers will be immune as well.
If a business can get away with a rate hike, they will, and all the rest will fall in line and do the same. "
I'm a father of two kids and we where addicted to t.v and video games. My son, daughter and I watched t.v and played video games for hours and then one day about a year ago I shut it off. We went to the library and went for a walk in the park. I spend more quality time with my kids and we don't miss the t.v one bit. We still watch t.v from time to time but nothing like before. "
I will wallow in despair without Jon Stewart and Stephen Colbert. "
Comedy Central and Spike are spotty at best, and there are lots of other sources for good kids' programming. But MTV? VH1? CMT? All garbage! eMpTyV hasn't been relevant for well over a decade, and VH1/CMT never were. Time to trim the fat. "
I've been with DirecTV for nearly 7 years and haven't looked back. Although I keep hearing about the weather related blackouts with satellite, I experienced far more delays/service interruptions with TWC than I have with DirecTV. Besides, if you have digital cable you will experience the same rain blackout as you would with a dish (digital cable IS satellite cable, it's just coming in through TWC's local dish and the signal transmitted through cable). I'll suffer a few minutes of storm related blackouts (which I'd have with digital cable anyway) to avoid TWC's horrid service. "
So to review - we have the recent rate increase, the Navigator fiasco, and Time Warner service has horrible for years.
What's it going to take to get some competition for these clowns in Lincoln? "
and the rest are just junk. I have 72 channels and only watch about 6
past the first 22. So I'm paying for gobs of channels that aren't even
worth watching. Past channel 22 I only watch 25, 32, 46, 70 & 71. Look
what I pay for that aren't even worth looking at!! Internet on cable is
alot faster than Windstream or I'd switch. So I'm gettin' cable telephone
so I can make long distance calls free!!! I figure all those channels
I pay for and aren't worth watching, they owe me the free long distance
telephone calls!!! "
I see that as a HUGE problem. "
http://money.cnn.com/2004/03/09/technology/echostar_viacom/index.htm "
Let em go. "
Oh never mind, I'm going to Dish "
The Daily Show and Cobert Report are huge - not only with us but everyone we hang around with. If Comedy Central and all of those other channels go dark tomorrow, I don't know how you could call this anything less than...
A BREACH OF CONTRACT.
When we call to disconnect, it will be interesting to see what they try to charge us. (emphasis on the word 'try').
Is Viacom being unreasonable? Is TWC? I don't know and I don't care. I DO know that when I pay for something and I don't get it, I take action. I will wait and see if those channels are dark Thursday morning and be ready to pick up the phone (cell phone I guess). I'll have quite a few numbers to dial. "
Here's a theory, TWC cable knew ahead of time they would reach an impasse with VIACOM, so they raised our rate by $5 per month in November to cover it. Now when they give in under pressure to VIACOM at the 11th hour, they will say they need to raise our rate yet again to cover the cost...do you see a trend???
Its time to switch to satellite. City Council - please begin the process to get another cable provider in Lincoln, me and at least 35,000 subscribers would appreciate it.
If VIACOM pulls the plug at midnight, TWC as an obligation to provide us programming other than shopping on the seven dark channels on the basic 2-75 tier....if those seven channels are dark, then TWC doesn't care at all about their customers, which should already be obvious by now. "
One of the best decisions I ever made.
There's some great programming out there, but I can find it on Hulu. "
Have you ever called 611 repair in arkansas or where ever it is? They tell you your call for service will be given high priority, and will resolve your repair issue in 48 hours??? High priority yeah right. I have windstream phone and internet and it was not always the best in the DSL pioneering days but have not had any problems recently and is for the most part very reliable. We have an antenna too for over air tv (free). We never had a service issue repair with twc , did not have a navigator either. Just a problem with the twc Bill! and lack of content and value. "
Tisk tisk TWC, you charge too much for your service and when Viacom wants their FAIR share, the customers get the shaft... AGAIN!!!! "
In October of last year, my digital cable and internet would go out for 5-10 mins up to twenty times a day. We had numerous servicemen come out who could find nothing wrong. After 16 days the problem went away on its own. I called TWC to have my account reimbursed for all the days of interrupted service and was given a total of $8 back (on my monthly bill of $137). If my math is right that's about 2-3% reimbursement for service that only worked properly for 14 days out of the month.
And unfortunately I live in an apartment, so a dish is never an option. "
Everyone on here needs to visit the Cox Cable website and let them know how well they could do if they set up shop in Lincoln! "
If TWC were to increase prices, for whatever reasons, and met the demands of Viacomm, I'm pretty sure the same people that are crying about how TWC should cave in so the channels can be saved, would be posting here how TWC gouges them and don't understand why their bill is going up X amount each month.
Guess what folks, this isn't the first time that Viacomm has been behind TWC and other cable companies rate hikes. It's about time -someone- stood up for them.
Personally, I won't miss any of those channels. Good riddance spongebob, may our children get smarter through time without you. "
TWC actions will continue to make a great case for bringing in additional service providers. I for one am considering moving to satellite and this would be the final straw.
If the "negotiations" are successful; I'm sure we'll have to pay more or be "thankful" they didn’t raise our prices....this month. "
Or maybe a better idea, Ala Carte like Canada.. That puts responsibility on the channels themselves to better their programming.
When we can choose what channels we want, the programming directors have to step it up and quit feeding us crappy tv.
I'm sure glad Time Warner is on the customer side.. Culling our channels, upgrading our digital cable box menus and operating systems. Thanks TW.
Satellite here we come.. !!! "
As for everyone else, if you don't like TWC, cancel your service! It is just that simple! "
Didnt my cable bill just go up? And yes I will be switching "
We were going to get basic TWC when we moved, but this removed the reason for it. Now I'm going to put up a nice high gain HD antenna on our new home for the locals and PBS (GREAT kids programming, by the way, our kids LOVE it). The kids got a Xbox 360 for Christmas, and we discovered the Netflix streaming to it - which is amazing.
So for about $200 for a nice HD antenna, then $49/yr for Xbox live, and $8/mo for Netflix we have an excellent entertainment system.
It's sad that cable companies are going to make themselves extinct, but look at what is happening to telephone companies?
Adapt or die! "
There is a reason why they call it the "boob tube." "
Outsourcing jobs, getting rid of the Colbert Report, when it's one of the only five stations I watch... well, it's time to move on. Maybe some people don't mind losing comedy central. I get 78 stations, and only watch 5.
I'm done. Time to go shopping and get a better deal while I am at it. "
I can't believe all these folks paying $130+ a month for TV. And then you admit to only watching a handful of channels! Getting rid of cable/satellite TV all together is an option, you know. The world won't end without it. "
I find it incredible that you've allowed shysters like Viacom to make TWC out to be the bad guy here.
As far as satellite? Fuggitaboutit. TWC 80 basic channels are better than both Dish companies 250 channel pkg...just compare them for once. "
Call TWC next time! "
town, its all dictated, theres no competition, that way the city's
"friends" can charge the heck out of you and your stuck. This is the
way Lincoln always operates! Thats why gas is higher than anywhere else
in the state. Even food, at one Hy Vee bananas will be .54 cents a lb.
and drive down the street to another Hy Vee and they will be .69 cents a
lb. I've never lived in such a crooked town in all my life. I have
NO respect or trust for anyone in this town. They are ALL out for your
last drop of blood!! "