Viacom-TWC Dispute: More Smoke Than Fire?
December 31, 2008
You can follow the full he said, she said here of the brickmanship that could result in Spike/UFC losing several million households as a result of the current fee dispute between Viacom and Time Warner Cable. The dispute has received a good amount of coverage in the MMA world, with the tone suggesting that it is a real possibility that Viacom will go dark on Time Warner shortly, leaving Spike and the UFC out in the cold.
TVByTheNumbers.com, one of the leading TV blogs, has a more sober analysis of the situation, suming up the odds of Viacom actually disappearing from Time Warner in one word: “doubtful:”
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.