DirectTV channel blackout continues

KANSAS CITY, Mo. — It’s summer. There are bored kids in the house. Your TV gets its programs from DirecTV.

But on Wednesday, you couldn’t get Nickelodeon or NickToons.

For the second day in a row, a tiff over fees is taking away TV channels. Negotiations collapsed late Tuesday between Viacom Inc. and DirecTV, a satellite company that transmits 285 channels to 33 million customers in the United States and Latin America.

The blackout is affecting 17 Viacom channels, including Comedy Central, VH1 and TV Land.

The move comes a day after fee talks failed between Time Warner Cable and Hearst Television.

In both disputes, Viacom and Hearst say their channels are undervalued and want the companies that transmit their content to pay higher fees. But DirecTV and Time Warner say that the higher fees would eventually filter through to their customers.

Hearst says its fee increase would be rather modest, but Time Warner claims it’s being asked to pay to pay 300 percent more.

Viacom and DirecTV on Wednesday offered similar patter in dueling statements.

“We have been very willing to get a deal done, but Viacom is pushing DirecTV customers to pay more than a 30 percent increase, which equates to an extra $1 billion, despite the fact that the ratings for many of their main networks have plummeted and much of Viacom’s programming can be seen for free online,” said Derek Chang, DirecTV executive vice president of Content, Strategy and Development.

Not so fast, says Viacom.

“The last time we spoke with DirecTV (on Tuesday) there were no new ideas offered for resolution,” Viacom said in a statement. “We proposed a fair deal that amounted to an increase of only a couple pennies per day, per subscriber, and we remained willing to negotiate.”

The disputes are leaving consumers a bit bewildered and considerably irked.

Suzanne Nootz of Overland Park, Kan., said she was missing one of her favorite programs, “Good Morning America,” which is carried by KMBC.

She considered switching to AT&T U-verse, a Time Warner competitor, but it isn’t offered in her neighborhood. What’s happening with DirecTV doesn’t make that seem like a safe bet either.

Both Hearst and Time Warner say they are still willing to negotiate, but there appeared to be little movement.

“We still have no deal,” Michael Pedelty, a spokesman for Time Warner, said late Wednesday afternoon.

A deal can’t come too soon for Janice Childers of Kansas City, Kan. Hearst also operates Me-TV, a digital subchannel that is also being blacked out. Me-TV shows reruns of “Gunsmoke,” the Western series that had top ratings for years. Her father has Alzheimer’s disease and the program has become very important to him.

“It’s the only thing that my mom can get him to watch that gets him to calm down,” she said.

Childers and others are being caught up in an industry drama that has been brewing for some time over the value of content. Broadcasters are now questioning why some cable and satellite channels are getting paid more despite their smaller audiences.

“A lot of broadcasters started scratching their heads, saying this isn’t fair,” said Dennis Wharton, spokesman for the National Association of Broadcasters

Cable companies say that broadcasters are worried about future ad revenues, and that is in part behind the move for higher fees. They also point out that companies such as Viacom are increasingly offering their programs on the Internet for free, a move that ends up devaluing content.

There are potential financial risks for both parties in not completing a deal. Such risks once could be counted on to speed negotiations, and many similar fee disputes in the past were resolved, although at the last minute before channels were taken off the air.

But tougher stances by both sides are now prolonging them.

Dish Network, another satellite purveyor, and AMC Network failed to come to a deal last month and still don’t have one. The AMC channel carries the popular “Breaking Bad” and “Mad Men.” But AMC is sold as a package with the IFC and WE channels, which Dish Network claims aren’t worth much.

Meanwhile, KMBC is spreading the word that it is still available over the air and through Time Warner competitors.

But how successful that is remains to be seen.

Robert Haney of Kansas City said he misses KMBC’s news. He hasn’t been able to get it with an antennae because of how his house is constructed, and isn’t quite ready to switch providers.

“I would prefer they come together with a new contract,” he said.


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