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What’s Trending Today in Finance and Business: DirecTV and Viacom

Kensey Lamb
Kensey Lamb
The Exchange

Topping our trending report today is news that DirecTV dropped several channels around midnight because of a dispute with Viacom over fees. Nickelodeon, MTV, Comedy Central, BET, VH1, CMT, Spike TV and TV Land are among the channels that have gone dark after the companies' 7-year contract expired.


DirecTV Executive Vice President Derek Chang said in a statement: "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."

According to Reuters, Viacom CEO Philippe Dauman stated, "In the last 7 years since we did the last DirecTV deal, we have successfully and peacefully concluded affiliate agreements with every major distributor in the U.S. We are prepared to move forward. It's unfortunate consumers for the first time are not able to enjoy our channels."

In addition to fees, another part of the problem has to do with bundling, which forces distributors to carry channels that have lower ratings along with the more popular channels.

William Launder at Marketwatch also points out:

Disputes over rate increases and resulting blackouts are commonplace in the TV industry, where distributors argue that their profit margins are getting squeezed by continually rising programming costs. In a smaller example, AMC Networks Inc.'s channels recently went dark for Dish Network Corp.'s approximately 14 million subscribers.

While distributors across the industry complain that higher programming fees squeeze their profit margins, they are a particular sticking point for satellite TV companies like DirecTV, which don't have other big businesses like telephone or broadband service to support their earnings.

A settlement is expected to be reached. But for now, if you are a DirecTV customer, you might be left screaming, "I want my MTV!"

Elsewhere on the list of top stories gaining traction today:

And wrapping up the trending news around the web:

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