Did you see the Viacom channels ad depicting a crying Dora the Explorer as the text accuses Timer Warner Cable of callously wanting to deprive her of her beloved audience? Try explaining that to your tot!
Viacom Channels Demand $39 Million More From Time Warner
The Associated Press reports that Time Warner Cable pays $300 million to Viacom for the privilege of carrying its channels. Now, Viacom wants an additional $39 million for the very same channels. Time Warner is not gung-ho about charging subscribers another estimated $2.76 per head per year to make it happen. Subsequently, both entities are engaged in a game of chicken.
Is Time Warner Cable Losing Channels?
If Time Warner cannot come to a meeting of the minds – or pocket books – with Viacom, it stands to lose a number of popular channels. Among them are children’s favorites such as Noggin and Nickelodeon; adult favorites such as Comedy Central, VH1 Classic, and Spike; and music junky fixes, among them CMT, MTV and VH1. There are a total of 20 channels Time Warner Cable could be losing.
Time Warner Cable Viacom Contest Fought on the Backs of Consumers
The Biz Journal explains that Time Warner is adamantly opposed to paying the extra money. They are quoted as stating that “the dispute really stems from Viacom’s slumping ad revenue and that a fee increase would amount to a squeeze on the cable company’s customers.” Even as Viacom is pulling out all the stops in an attempt to make Time Warner look like the bad guy, it cannot escape notice that this money grab will come out of the pockets of consumers.
Viacom, an Old Hand at Hardball Tactics, Might Have Found its Match in Time Warner
Viacom pulled a similar stunt with Dish Network back in 2004. At issue, once again, was a rate increase and neither side was willing to flinch, leading to a two day blackout of Viacom channels. Since the satellite television provider realized that their situation was precarious, the dispute ended amicably, and once again Dora the Explorer and Boots are gallivanting across satellite fed TV screens.
Time Warner Cable, on the other hand, has the advantage of being, well, the cable company. This makes them the only game in town – unless consumers want to switch to a satellite TV provider – giving them ultimately more leverage than Dish ever had. Time Warner only competes with satellite TV, Dish had to compete against the other dish and cable.
So maybe Dora isn’t crying because Time Warner wants to keep her from her little fans, but perhaps she is crying because she is held hostage by Viacom? Either way, consumers lose out. They will either lose some of their favorite channels or pay even more for the privilege of having them.
Sources: http://www.google.com/hostednews/ap/article/ALeqM5gmeKcfi6sWhsSN9SOcnD9eR3hjsAD95DUAU80; http://www.bizjournals.com/cincinnati/stories/2008/12/29/daily46.html