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Cable Technology Feature Article

July 23, 2012

DirecTV and Viacom Both Come Out Winners After Fight

By Oliver VanDervoort, Contributing Writer

Now, with the fight between Viacom and DirecTV (News - Alert) over, the one thing that is clear is that there are no real winners. What needs to be pointed out is that this particular fight seems to be fought at least once a year between a cable company and a satellite company and the fight usually ends with both companies blinking and working out their differences.

It seems in this day and age that the fight is almost used as practice or a way to get their names in the paper for a few days. While the fight bloodied some noses, in the form of a 10 day blackout of Viacom’s (News - Alert) channels on DirecTV, the two companies basically punched themselves out.

There are a number of different approaches that these fights can take, depending on how the companies carry themselves. Most of the fights do not get quite as nasty as the recent one did. At the end of this particular battle the two sides were able to agree to a long term deal that has led lovers of the Viacom channels and DirecTV televises to breathe a sigh of relief.

The exact terms of the deal saw DirecTV agree to pay Viacom 20 percent more than they had been paying this year and that the two companies have agreed to single digit fee increases over the life of the deal. The new agreement will net Viacom more than $600 million in the first year of the deal. For its part, DirecTV was able to avoid having to pay for the premium network Epix, which will save the company $500 million over the term of the contract. DirecTV said that this particular deal shows that the company will not just rollover and allow cable providers to do whatever they want.

Viacom says that the deal means that DirecTV is now paying a fee that is more in line with what other providers are paying. The company says that their programming makes up as much as 20 percent of what DirecTV customers are watching, while the satellite company was only paying five percent of their overall programming cost.

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Edited by Brooke Neuman

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