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Pay-TV customers in Austin, Cincinnati and Milwaukee are at risk of losing access to shows such as SpongeBob SquarePants, PAW Patrol and The Daily Show with Trevor Noah if cable company Charter and Viacom cannot agree on terms for cable service.
The second-largest U.S. cable company — Charter has 16.6 million pay-TV homes in the U.S. — and Viacom, home of Comedy Central, MTV and Nickelodeon, have extended talks as they continue negotiations over how much Charter should pay Viacom for its programming. Their current deal expired Sunday, but Viacom programming remained on Charter’s system Monday.
This is just the latest dispute over how much pay-TV companies should pay media companies for their programming. Earlier this month, Disney and Altice reached a multiyear agreement to keep the Disney Channel, ESPN and other channels available to Altice’s more than 2.6 million New York-area customers.
Despite a growth in non-traditional pay-TV options, including streaming services such as Hulu Live TV and YouTube TV, Charter and Viacom will likely come to terms because “the long-term partnership between the two is mutually beneficial,” Vijay Jayant and James Ratcliffe, analysts with investment banking advisory firm Evercore ISI, said in a note to investors Monday.
That’s because Charter “remains committed to its video product,” the analysts say. Stamford, Conn.-headquartered Charter has a total of 25.3 million residential customers, including 22 million who pay for Internet service.
Similarly, Viacom is still “heavily dependent” on traditional video distributors for viewership and advertising revenue, they say. “We believe that in the end ‘cooler heads will prevail’ to avoid a permanent Viacom blackout on Charter systems, as ‘mutually beneficial’ is a better outcome for these companies and the ecosystem than ‘mutually assured destruction,’ ” Jayant and Ratcliffe say.
Earlier this year, Charter moved some Viacom channels, including BET, Comedy Central, MTV and Nickelodeon, to more expensive packages, resulting in some customers needing to pay more than they used to for some channels.
Charter has rolled out its Charter Spectrum service to all of the markets acquired last year in its $79 billion acquisition of Time Warner Cable and Bright House Networks. Some former TWC customers who had special deals expiring could have had to pay more to get certain programming packages, as compared to previous subscriptions.
Among areas served by Charter Spectrum: Asheville, N.C., Louisville; El Paso and Corpus Christi, Texas; much of Ohio, Wisconsin and New York state; and the Los Angeles area, including Palm Springs.
Both companies have said they have consumers’ interests at heart. Last week, as the end date of the current deal approached, Viacom released a statement that its offer “would enable Charter to lower Spectrum subscribers’ bills, while also giving them more access to shows across Nickelodeon, BET, MTV, Comedy Central and other Viacom networks.”
However, Viacom charged Charter with continuing “to insist on unreasonable and extreme terms that are totally inconsistent with the market. While we’re making every effort to reach a new deal, Charter’s actions may force a disruption in their service.”
On a “Get the Facts about Viacom” Web page created by Charter, the provider argues that “Viacom has been overpaid for their channels over the recent years. Their business is suffering and they are trying to boost their bottom line at the expense of you, our customer.”
Charter said it had “offered a fair price for what they provide, and they have refused to consider it.”
Many consumers caught in the middle took to Twitter to express their concerns. “For now Viacom didn’t take the channels away from Spectrum like they said they would do lots of people probably called in or complained,” tweeted @Sasha_Minor.
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