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Cable Technology Feature Article

July 16, 2012

DirecTV's CEO Appeals to Customers About Viacom Blackout

By Miguel Leiva-Gomez, TMCnet Contributor

If you haven't heard it yet, there's a reason why The Daily Show and Colbert Report won't show you any full episodes for the moment. A short look at the comments section below each of the "Full Episodes" sections in each website will show you just how angry people are at Viacom. You see, Viacom asked DirecTV (News - Alert) to accept its higher price per subscriber. Since DirecTV refused, Viacom pulled out in protest.

They've been in this fight for several days now, and customers have been denied access to channels like MTV, Nickelodeon, and Comedy Central. DirecTV and Viacom have been trying to gather support via the Internet in places such as Twitter and YouTube (News - Alert). Viacom attempts to coax customers to switch out of DirecTV's services and fall into the radar of another service provider that's willing to comply with the company's demands.

However, DirecTV's CEO, Mike White, attempts to make an appeal on the situation to his customers via a video that also appears on YouTube. He starts the video by assuring viewers that the blackouts of Viacom's (News - Alert) channels is only a temporary measure and that Viacom wants to charge 30 percent higher fees to DirecTV for its networks. He calls this an extra $1 billion for the "exact same channels you already receive." He makes an appeal by saying that he's fighting to keep his subscriber prices as reasonable as he can.

To err on the side of the devil, though, Viacom's probably getting a lot more programming into DirecTV and wants to be compensated for new networks it creates. This kind of thing has been done in the past by Disney and News Corp (News - Alert). Some niche networks, which are not so successful, end up being subsidized by full package payments and are allowed to exist for the few subscribers who enjoy them. The thing is that the majority of subscribers who don't view these channels also end up paying that end of the tab. Costs have been steadily rising for TV programming, and providers have gotten sick of it after all this time. This is one of the reasons they are lashing at companies like Viacom whenever they are forced to increase their prices.

Hopefully, the problem will soon die down and both companies can approach a resolution. In the meantime, you still can't watch The Daily Show online.

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Edited by Brooke Neuman

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