Viacom, DirecTV Reach Deal, End Blackout
DirecTV Group’s 20 million U.S. subscribers are getting back their favorite shows after the satellite TV provider reached a deal to restore Viacom Inc.’s networks, but the size and scope of the high-profile dispute may have changed the nature of future programming battles.
The loss of 26 networks to 20 million homes for nine full days means the size, length and scope of this programming blackout was unprecedented to date in the U.S. pay-TV industry. Contentious relationships between program distributors and program makers are on the rise as the industry’s growth appears to have peaked.
“The Viacom/DirecTV dispute may be remembered as a critical turning point in programmer/distributor negotiations,” said Bernstein Research analyst Todd Juenger. “For the first time in memory, it was the distributor that won the public relations war.”
While distributors typically take the brunt of the complaints about network blackouts, DirecTV argued that the increasing number of disputes with other distributors had educated customers that they would face the same problems with their rivals.
“By showing their willingness to take a blackout, and arguably winning the battle for the hearts and minds of their customers as a result, DirecTV may extract better terms from other programmers down the road,” said Juenger.