Viacom to Take Jon Stewart, MTV & SpongeBob Off The Air on Time Warner Cable Networks

31 Comments

What would happen to New York if The Daily Show went off the air? Where would hipsters get their daily Moment of Zen? No Spongebob Squarepants either – which means the Upper East side mommies would actually have to talk to their kids. A dispute between Time Warner Cable and Viacom (s VIA.b) over fees is going to impact Time Warner Cable (s TWX) customers in New York, Los Angeles, Dallas and several other cities on January 1. The channels likely to go off the air include Nickelodeon, Comedy Central, VH1 and MTV.

At the crux of the problem: Viacom wants to increase the rights fees to its 19 channels. Time Warner Cable says this is a bad time to be asking consumers to pay more money to watch television. Given the state of the economy, TWC seems to have a point. To this Viacom counters in a press release:

The renewal we are seeking is reasonable and modest relative to the profits TWC enjoys from our networks. We have asked for an increase of less than 25 cents per month, per subscriber, which adds up to less than a penny per day for all 19 of MTV Networks’ channels. We make this request because TWC has so greatly undervalued our channels for so long. Americans spend more than 20% of their TV viewing time watching our networks, yet our fees amount to less than 2.5% of what Time Warner generates from their average customer.

The increase is going to be about $3 a month for the subscribers. TWC says that Viacom is trying to get more money out of its pockets because the advertising market has tanked. “The root of this is that the advertising market has gone soft and Viacom is desperate,” Alexander Dudley, a spokesman for Time Warner Cable, told The New York Times.

Dudley wasn’t shy about spanking Viacom in public. He told The Los Angeles Times:

They are holding our customers hostage for a bunch of networks with sagging ratings and only one or two good channels. We have to hold the line for our customers.

Snap! There have been troubles between content owners and carriage providers recently. Echostar (s DISH) and Viacom got into each other’s faces in 2004. TWC and ABC have tussled over price issues. Except this time around, Viacom has Jon Stewart and Stephen Colbert on its side.

Time Warner Cable says it is going to respond by telling people where to watch these very channels online — using, of course, its broadband pipes.

“We will be telling our customers exactly where they can go to see these programs online,” Mr. Dudley said. “We’ll also be telling them how they can hook up their PCs to a television set.

Viacom Networks’ Full Statement:

The move by Time Warner Cable to force such channels as Nickelodeon, COMEDY CENTRAL and MTV off the air is another example of a cable company overreaching for profit at the expense of its viewers.

The renewal we are seeking is reasonable and modest relative to the profits TWC enjoys from our networks. We have asked for an increase of less than 25 cents per month, per subscriber, which adds up to less than a penny per day for all 19 of MTV Networks’ channels.

We make this request because TWC has so greatly undervalued our channels for so long. Americans spend more than 20% of their TV viewing time watching our networks, yet our fees amount to less than 2.5% of what Time Warner generates from their average customer.

Throughout the country, we have negotiated equitable license agreement renewals, or are in the final stages of renewals, with virtually every cable and satellite carrier. Nevertheless, Time Warner Cable has dismissed our efforts at a fair compromise and has effectively chosen to deny its customers some of the most popular TV shows on the air.

As a result, we are sorry to say that for Time Warner Cable customers our networks will go dark as of 12:01 on January 1st, denying Time Warner customers shows like Dora the Explorer, SpongeBob SquarePants, The Daily Show with Jon Stewart, The Colbert Report, and The Hills.

Ultimately, however, if Nickelodeon, COMEDY CENTRAL, MTV and the rest of our programming is discontinued — over less than a penny per day — we believe viewers will see this behavior by their cable company as outrageous. Time Warner Cable subscribers who are being handed a January 1st $3 monthly increase in Raleigh, Orange County, Los Angeles, and New York City are simultaneously facing the removal of beloved shows across 19 channels.

We find it a shame that Time Warner Cable remains unreasonable at this time. We hope its leadership will have a change of heart and will seek to negotiate a fair renewal agreement. “

See our additional coverage:

Where to Get Your Daily Show Fix and More Online

Time Warner: No Colbert? Count me out

31 Comments

Osvaldo

listen all u little Fs who agree w/ time warner Spongebob and everyone else should stay ok so f every1 who agrres with TW

r

these companies better learn how selfish they are. they dont care about the kids the like to watch spongebob and all these other channels.i sujest they should think about the others and not put spongebob of air. its not going to to be fair to the people that watch these chanels.

jon stewart

Jon stewart proposed to his future wife through a personalized crossword puzzle created with the help of Will Shortz

chris

I could be wrong here, but I think Viacom has a point. If 20% of americans are view Viacom’s programming, and only 2.5% of TWC’s revenue is going to Viacom fees, then I think they are entitled to more. Don’t drink TWC’s kool-aid guys. If Viacom raises its fees, it doesn’t mean that TWC HAS to raise ours. It simply means they’ll have less profits. But remember who’s pocketing most of that money anyways. So I’ll paraphrase…it means the TWC execs will have 1 less yacht. In the end, Viacom will license its material to online outfits and branded content providers, and TWC will be the dummy. Trust me on that.

Ponyboy

NOO!!!! The Colbert Report!!! It won’t be available online anymore if this lasts.

MikeM

Viacom, MTV, garbage, irreverant Stewart, copycat Colbert, no loss on my TV.

Hold firm TWC.

austinite

Sorry son … I’m going with Time Warner, and I applaud them for standing up to these thieves and not just taking the hit and passing it on to the consumer.

I can watch Jon Stewart online the day after (without commercials I might add) … Viacom will not be missed.

Hunter Gatherer

Both of these companies are being greedy and self-centered during a time of belt-tightening across the country. It’s just another example of the executives in the boardrooms drinking their own brand of kool-aid. I wish they would go ahead and broadcast these people committing hari-kari. It would be a very highly rated show.

Great time to switch to satellite.

randpat

I wrote this to Viacom suggest you do something similar: You misrepresented yourself. I will now go to any and all blogs I can to tell the true story. I called and wrote Time Warner Cable to demand the return of shows I watch all the time. The truth is you are making great money from the cable companies, while they lose money and your trying to gouge additional money out of them. Well, I guess I can lose my shows at YOUR foolishness. Like my grandmother would have said, “Shame on you!”

Tekkfu

The real reason TW is doing this is because they have price locked a large % of it customers for two years. So they would have to pay for these increase them self, they don’t care about us. Wakeup people… These cable companys charge $29 a month for phone service when you can get a skype phone and pay $5 a month.

These companys all have a bottom line and we are all not on that line.

thompsongun

This is just another case supporting a la carte pricing. I’d pay a few pennies more for Comedy Central and would make up for it by dumping MTV.

And certainly the cable companies are no saints here. They’ve not changed anything in 20 years so why have their prices been rising so much faster than inflation during that time?

Jan Barrows

I applaude Time Warner for not wanting at this time of ecomonic down fall to charge customers more money. To me it is bad business dealings for Viacom to want to up prices at this time. Although the kids will miss the channels, we will watch on the internet. Hopefully Viacom will come to see that this is a bad deal at this time to up prices.

Michael

In this instance, I think TWC should hold firm. There are many reasons for Viacoms flagging ratings and to think that people will want to pay even more just shows how greedy they have become. This should help lower even more there ad revenue since even more people won’t be watching. Good bye Viacom, you will not be missed.

tim s per

what is concerning is that the increase from viacom is 25 cents but the rate a person would get billed for is 3.00. whos the manipulator here. its bad enough that there are so many commercials on now that tv isnt fun to watch any more. they ought to give us the cable for free and let the commercials pay for the programming.
have you tried to watch a baseball game on tv? about 100 commercials, mostly the same items, and a little bit of a ball game.

Derek Currie

I just wrote a THANK YOU note to Time Warner Cable, my cable TV provider, and a GOOD RIDDANCE note to Viacom. I could not be happier that a greedy company with a bad attitude toward their customers like Viacom is being slapped down. I’m actually going to enjoy not having access to their programming, knowing Viacom is being hurt in the process. They are easily the worst of the massive media moguls. If we’re extra lucky this will be the beginning of the end of BIG MEDIA, which has strangled entertainment diversity for decades. Next target: The blithering idiots at the FCC.

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