The ongoing carriage fee spat between Viacom (s VIA) and DirecTV (s DTV) just escalated to a whole new level: Viacom has taken a number of full episodes of programs like the Daily Show, and the Colbert Report off its websites. The step was taken to prevent DirecTV customers from accessing the content, but in turn shut off everyone else as well. Viewers who want to access an episode of the Daily Show are instead being shown the following message:
(Stewart and Colbert are on summer break so no new episodes of their shows are being blocked this week.)
The takedown, which was first spotted by BTIG’s Richard Greenfield, seems to affect a wide range of content: Clips and older long-form episodes are still available but most current or new full episodes aren’t being offered at Comedycentral.com, MTV.com or the other network sites. “We still have hundreds of long-form episodes remain online, for free, but we have temporarily slimmed down our offerings as DirecTV markets them as an alternative to having our networks,” Viacom spokesman Carl Folta explained during a phone conversation; more than 4,500 episodes are still up, he told us after checking. Folta also said Hulu and other partners who pay Viacom for its programming will continue to get it and be able to serve it up as usual.
Hulu.com’s offering is good news for anyone who wants to catch up on Jon Stewart’s latest election coverage, but it’s also notably different from the last retrans conflict that took a toll on online content: Back in late 2010, Fox (s NWS) made Hulu.com block access to its content for Cablevision (s CV) customers, in addition to blocking Cablevision subscribers from accessing full episodes on its own website.
Viacom doesn’t have that kind of leverage this time around, simply because DirecTV isn’t a broadband provider. In other words: Viacom can’t single out people who subscribe to DirecTV for their TV programming online. Instead, if it wants to make a point to DirecTV subscribers, it has to cast its net much wider.
The online blackout comes after DirecTV told its customers where to watch their favorite shows online. It’s Viacom’s way of putting an additional layer of pressure on DirecTV, which also is likely to see campaigns from competitors Dish Network, Comcast and others hoping to peel off customers irked by the situation. It’s a reminder that streaming rights are part of the modern licensing deal — and a warning that while Viacom has promised to provide its distributors with on-demand broadband programming, it doesn’t have to do it for everyone else. The spigot can be opened, shut or set to a trickle any time Viacom chooses to do so.
The question is, as always with these kinds of stand-offs: Who does it hurt more? Viacom is risking some negative feedback from non-DirecTV subs, but that’s dwarfed by the huge revenue potential of higher carriage fees. DirecTV could lose subscribers; that risk is higher every day that this goes unresolved.
The damage this will do to both companies’ image is another matter entirely. DirecTV customers could get further riled up against their TV provider, and Viacom is using all of its web properties to stir that sentiment. However, customers of other TV service providers could feel like Viacom is unjustly dragging them into a fight that they’ve got no beef in.
The good news is that this could be a very temporary online blackout: Viacom and DirecTV are back at the table after an interlude where the two sides only talked to each other through the media.