Update 2: As predicted, just a game of chicken and TWC and Viacom have settled their dispute.
Update 1: commenter "Mikey" provided us with some data in the comments and I've cleaned up the formatting and posted here. It is an analysis of the subscriber monthly cost per cable channel per tenth of a ratings point. Based on this data, Mikey gives the moral high ground in the dispute to Viacom (though he isn't advocating all the spin Viacom has surrounded its PR campaign with). There were some fairly big "wow" moments for me when I saw the cost of high performing networks ratings-wise like Nick and USA vs. say, TNT).
[original post from 12/30/08 below]
Doubtful.
I'd probably ignore this and it would have merely been a reply to a comment left about Nikki Finke's post on the TWC vs. Viacom battle. But the comment was posted in the broadcast weekly top twenty, and replying there seemed Awkward since it doesn't have a freaking thing to do with cable channels.
Viacom is asking Time Warner to pony up an additional $.25 per month, per subscriber. Time Warner's response so far is this: we'll pass on you and your cable channels. So Viacom is working the press, spinning tales about how 20% of TV viewing time is spent watching their channels so the increase is very reasonable.
While I understand Ms. Finke's dismay at potentially losing SpongeBob, my gut tells me that Viacom and TWC are different sides of exactly the same greedy coin. There's so much spin in the blurb she posted from TWC, that sorting through how misleading it is isn't worth the effort since conflict will likely be avoided.
Viacom is hurting in general, and this isn't a deal where it's looking to get paid, it's looking to get paid $.25/mo./subscriber more than it's already receiving from TWC. I do not in any way immediately jump to the conclusion that Viacom deserves a $.25/month increase across all subscribers, and Time Warner is armed with data about how much time its customers spend watching Viacom channels.
I seriously doubt Viacom will give up all the revenues it receives from TWC in the name of earning an additional few million or so a month, but I also seriously doubt that TWC can handle the customer service hit. You can't go dark on Nickelodeon, Comedy Central and MTV, etc. without running into a customer service nightmare.
Right now it seems like just an interesting game of chicken heading into the New Year, and the stuff Nikki Finke posted is pure Viacom propoganda in hopes of gaining some negotiating leverage. My bet is one of them, probably Viacom, blinks before the networks go dark on TWC. Can Viacom afford to lose the TWC subscriber base? Hell no. It would be looking at all kinds of make goods if that happened.
Can TWC really take on the customer service nightmare and lost local ad revenues for those channels? Not paying any fees at all would more than make up for the local ad revenue, but at the expense of screaming customers, and increased defection to satellite, and where available, FiOS. Though TWC seems in a better position than Viacom, TWC is clearly not going to be able to reprise Michael Corleone in The Godfather, part II and take a position like:
Viacom, you can have our answer now if you like. Our final offer is this: nothing. Not even the monthly fees we we're already paying you...
...but it's fun to think about.
This is a different issue…but we lost our CBS and Fox channels here in our market through Dish Network. It is kind of the same story; the local channels (owned by Fisher or something like that) wanted, according to Dish Network, an increase in fees of 80%. Dish Network said heck no.
So, now we don’t have either station and we get a $1.00 credit on our bill plus the Hallmark Movie Channel for free!
Luckily, for our household, Survivor and Amazing Race aren’t on right now. That is all we watch on CBS anyway.
If the greedy execs took a cut in their obscene pay, gave up their undeserved bonuses, restricted their perks to no more than their employees have, they wouldn’t have to worry about their advertising revenue gone soft and their profit margin would be consistent and they wouldn’t be in this mess.
Survivor and The Amazing Race are, in fact, the only shows worth watching at all, except the daily news I guess.
“Survivor and The Amazing Race are, in fact, the only shows worth watching at all, except the daily news I guess.”
No way, “Always Sunny in Philidelphia” is pretty much the greatest show ever created
Drop Viacom and don’t raise my rates. I won’t miss any of the channels in question and am disgusted by Viacom’s attempt to profit on the backs of cable/satellite subscribers. As reported in Reuters and AP, their ad revenues and ratings are dropping in part due to the fact that they make their most popular shows available for download on the internet.
So Viacom wants cable ad revenue, internet ad revenue, and wants increase fees that will be passed on to me? H*** no.
If a cable/satellite subscriber wants a Viacom channel so much, they can pay for it as an add on. Don’t pass the buck to every single subscriber.
I have a friend who used to work customer service for DirecTV. Last time Dish Network dumped a bunch of local channels, DirecTV offered a pretty sweet deal to former Dish subscribers and they got a lot of them. TWC probably doesn’t want to have to deal with that.
I have to disagree with you Robert on this one. Although I agree both sides will figure it out before the New Year, Viacom is in the stronger negotiating position here. Viacom’s lost revenue would be temporary while TWC’s lost revenue would be permanent. Cable is steadily losing customers to alternate services. This would cause a mass exodus from their customer base (and since their customers don’t just purchase Viacom channels ala carte the financial hit would be exponentially greater than what would be felt by Viacom). Also, you have to recognize the fact that the consumers who watch Viacom’s channels will find a service that provides those channels, Viacom will get its audience back (even if it takes a ratings hit for several weeks while the customer adjusts). However, once TWC loses customers to another service they are not likely to return… ever. So, even if TWC later works out a deal with Viacom the damage would have already been done. So, as the deadline approaches it is more important for TWC to ensure those channels don’t go dark because the effect would be permanent. (And dont think DirectTV and other TWC competitors in those areas arent planning a marketing campaign to take advantage of the situation).
twc dont lose these channels there decent and some r okay
what ever happen to constummers first
we desevre better than what were geting
were forced to pay more for less yeah right
twc fix or im gone hello direc tv
I personally hope they do drop the Viacom channels. As a mother to 3 small children at first I was really upset at the thought of losing Nickelodeon and Noggin, but now that I have thought about it wouldn’t be no great loss. There is better quality programming for my kids on other channels. And MTV and VH1 have just become worthless over the last couple of years.
You couldn’t pay me to go to satellite. Every time we have had it, it’s been a horrible disaster with the worst customer service on the planet.
And I think it’s hillarious that Viacom is painting themselves as poor little victims of big bad Time Warner in their press release about all this. Talking about how Time Warner needs to think about their customers, etc. Well, why can’t Viacom think about their customers as well.
I would dump cable TV tomorrow and switch to free over-the-air transmission except for one thing: the Noggin channel. However, if I find a way to get my kid her favorite shows some other way, the pay TV services will lose me forever. I wonder if I can buy the complete Blues Clues…
Blues Clues? You know I always wonder why parents sit and watch kids shows with their children. Just get them addicted to family guy – ‘And boom goes the dynamite!’ They have absolutely no idea why they are laughing.
But I truely sympathize wit you Jasbrit, I know what it is like to be stuck at home with a bunch of pre-teens – can’t imagine what the outcome would have been without the spongebob marathon – most likely the day would have ended up with me in a coffin.
Ohh Looky! The fun has just started for TWC – viacom is televising round the clock message on Nickelodeon, trying to frighten the kids.
What I don’t understand about TWC is why they offer so few HD channels. This irks me since I have an HDTV. Why can the satellite providers offer 100+ HD channels and TWC offers 5 (plus HBO, plus local channels)?
For that reason, I’m probably going to migrate to either Dish Network or DirecTV early next year.
I side with Viacom in this dispute, but I have to say….how in the world does Viacom claim that their channels account for 20% of TWC viewing?
I’d love to see the math behind that claim. I have to believe they’re excluding broadcast networks, which if true would be disingenuous since that is part of what you pay for when you pay for cable.
I also think it’s clever for TWC to use the fact that the shows are available for free online against Viacom. That’s a fair point. A lot of content providers are alienating their most important partners by making shows available online where they make no money.
I don’t have Time Warner, but I wouldn’t miss a single one of those channels. I don’t think anyone in the house has watched programming on any of them in years. OTOH, I was very angry when Charter switched Soapnet to the more expensive digital tier on a month’s notice and with very confusing wording in tiny print that I suspect was designed to keep customers from figuring it out ahead of time. When I contacted online Charter help (because their phone lines were perpetually busy), the rep claimed to know nothing about the Soapnet change and wouldn’t give me a straight answer.
Well, a month later the channel indeed vanished (along with a couple others, but no new ones were added), while our bill stayed just as high. It’s since been raised to about $56 a month for just expanded basic, which is roughly 70 channels (no pay per view, premium channels, or any other extras). Charter is the only local cable company, and satellite is just not going to happen for us. So it’s either pony up and accept what they want to do, or get hardly any channels.
Viacom needs to think of the consumers first – Please don’t pull these channels from Time Warner Cable or Brighthouse Networks!
http://www.floodthelines.com/viacomdontpullchannels/
I don’t think Time Warner Cable can or should give in because if they do, what will stop NBC Universal or ABC Disney or any of the other companies which own tons of cable channels from trying to shake down Time Warner Cable or other cable companies. If TWC gives in it will set a bad precedent. Also this shows how important Nickelodeon is because if Viacom did not have that channel they could never try this because there other cable channels, including Spike and Comedy Central, really don’t attract that many viewers.
I don’t even like any viacom stations, so it doest’t bother me at all
David, what you’re calling a shake down I would just call getting fair market value for your product.
Earlier this year I did an analysis of what each cable network charges for their product relative to the ratings they deliver. Comedy Central and Nickelodeon are two of the biggest bargains on cable. Spike is not far behind. There’s no question in my mind that Viacom has undervalued these properties.
Honestly, if I were running the negotiations for Viacom I’d turn this into a Dutch auction. Don’t want to agree to a 25-cent increase? No problem. Tomorrow our price is 30 cents, and next week it will be 40.
Hi here is what i have done i am a time warner customer but i am also the mother of 2 children under 13 so nick and noggin are huge . I have called the numbers and issued an email complaint at time warner cable but i have also sent an email to viacom because they are not innocent in this to let them know i will no longer buy their products (toys dvds tc) and i am also encouraging my friends and family to do this as well as suspend their neopets accounts hich viacom also owns and gets revenues from . just something to think about
Very interesting stuff Mikey. That’s the kind of analysis I wish we had access to so we could post it. If you create a price/value metric where do the broadcast networks shake out in such an index? Are they fairly valued? Undervalued? Undervalued relative to the Viacom channels you mention?