They’ve been negotiating a multi-billion-dollar deal for some of the most widely viewed channels in the cable universe.
But according to DirecTV, the sticking point in its ongoing carriage impasse with Viacom is … wait for it … the fledgling pay channel Epix.
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On Wednesday — just more than a week after Viacom channels were pulled off the set-tops of DirecTV’s nearly 20 million subscribers — both sides ramped up the rhetoric.
Viacom hit first in a late-afternoon statement, dismissing any notion that a deal is close at hand and accusing DirecTV of “moving backwards” in negotiations.
Elaborating for paidContent, a Viacom spokesman called this notion “DirecTV spin,” adding, it’s “a fabrication designed to deceive their customers and discourage them from moving to other distributors.”
Responded DirecTV: “Viacom’s current statement on our negotiations is completely inaccurate. They made a proposal last night for our carriage of the 17 channels they pulled from DirecTV, and we accepted all material terms for those channels including an increase that was more than fair. We are ready to close this deal at anytime and restore those channels to our customers.
“However, as part of that offer, Viacom insists that we carry the Epix channel at an additional cost of more than half a billion dollars. We know our customers don’t want to pay such an extreme price for an extra channel, they simply want the ones they had returned to them.”
And on and on it went, with Viacom’s PR team later “updating” the company blog saying, essentially, that it also offered DirecTV proposals that didn’t include Epix, and the satellite carrier passed on those, too.
“Nothing in the [DirecTV] press release reflects the reality of the negotiations, which, sadly, are at an impasse,” the Viacom missive added.
Currently, Epix touts about 30 million subscribers, but it only counts carriage on four of the top 10 pay TV services — Dish Network, Verizon FiOS, Charter Communications and Cox Communications. It also has a licensing deal with Netflix.
The premium channel is a joint venture between Viacom, Lionsgate and Metro-Goldwyn-Mayer. And getting carriage on the No. 2 pay TV service in the U.S. would certainly be a vital next step in its evolution.
Logic, of course, says this impasse can’t exist for much longer: DirecTV provides Viacom with about 20 percent of its U.S. coverage, and Viacom channels deliver DirecTV about 20 percent of its viewing.
In a note to investors Monday, Bernstein Research senior analysts Todd Juenger and Craig Moffett wrote that the haggling will inevitably end. But that it might go on for a while, with no “Linsanity” moment on the horizon.
(For those of you who missed out in February, an entrenched Time Warner Cable caved into the demands of regional sports network MSG after dissonant fans of a moribund New York Knicks pro basketball team suddenly became energized by the emergence of point guard Jeremy Lin, father of the so-called “Linsanity” media phenomenon. Astoundingly but perhaps not surprisingly, MSG/Knicks/Cablevision impressario James Dolan on Wednesday allowed Lin to sign with another team, the Houston Rockets, choosing not to match a contract offer.)
Back on subject, we see one very definitive signpost up ahead for DirecTV — its August 2nd second-quarter earnings report. Should the El Segundo, Calif.-based carrier report significant subscriber losses and no dealmaking progress to investors, we DirecTV subscribers might have access to Epix very soon.
This article is from the archive of our partner The Wire.
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