Viacom and Time Warner Cable are fighting over the renewal of Viacom’s cable network fees. Specifically, Viacom wants TWC to pony up another $50 million a year (a low-double-digit percentage increase over the existing fees, says a source) , and TWC doesn’t want to. So Viacom is threatening to stop showing Dora The Explorer, The Daily Show, MTV, et al, on Time Warner Cable systems starting Jan. 1.
TWC has about 15 million subs, and the parties are fighting over about 25 cents per sub per month ($4 million of revenue per month, or $50 million a year). That’s pure profit for either side, so it’s understandable why both want it.
As the squabble comes down to the wire, Viacom has taken the fight to the people. Here’s the Viacom statement, which is obviously designed to get cable customers to call Time Warner and scream:
“This move by Time Warner Cable to force such channels as Nickelodeon, COMEDY CENTRAL and MTV off the air is another example of a cable company overreaching for profit at the expense of its viewers.
The renewal we are seeking is reasonable and modest relative to the profits TWC enjoys from our networks. We have asked for an increase of less than 25 cents per month, per subscriber, which adds up to less than a penny per day for all 19 of MTV Networks’ channels.
We make this request because TWC has so greatly undervalued our channels for so long. Americans spend more than 20% of their TV viewing time watching our networks, yet our fees amount to less than 2.5% of what Time Warner generates from their average customer.
Throughout the country, we have negotiated equitable licence agreement renewals, or are in the final stages of renewals, with virtually every cable and satellite carrier. Nevertheless, Time Warner Cable has dismissed our efforts at a fair compromise and has effectively chosen to deny its customers some of the most popular TV shows on the air.
As a result, we are sorry to say that for Time Warner Cable customers our networks will go dark as of 12:01 on January 1st , denying Time Warner customers shows like Dora the Explorer, SpongeBob SquarePants, The Daily Show with Jon Stewart, The Colbert Report, and The Hills.
Ultimately, however, if Nickelodeon, COMEDY CENTRAL, MTV and the rest of our programming is discontinued – over less than a penny per day – we believe viewers will see this behaviour by their cable company as outrageous. Time Warner Cable subscribers who are being handed a January 1st $3 monthly increase in Raleigh, Orange County, Los Angeles, and New York City are simultaneously facing the removal of beloved shows across 19 channels.
We find it a shame that Time Warner Cable remains unreasonable at this time. We hope its leadership will have a change of heart and will seek to negotiate a fair renewal agreement. “
We’ve asked for more info, which we need to determine which side is being piggish here. More as we get it.