Read updates to these developments at the end of this post
Viacom reportedly is looking for a big increase in what hundreds of small cable companies pay to carry popular channels such as MTV, Nickelodeon, Spike TV and Comedy Central. According to a notice issued by cable operator RMA Cable of Rancho Murieta, Cal., Viacom’s contract with the National Cable Television Cooperative expires March 31 and Viacom is looking for “unreasonable rates” to renew. The NCTC negotiates with content providers such as Viacom on behalf of its rural cable operators, who number 890.
The NCTC and its members are “pressing Viacom to re-think the level of the rate increase,” RMA says. But the company warns customers that Viacom “may require us to stop carriage of their channels until a final agreement is reached.”
It wouldn’t be the first time Viacom used that tactic. In 2012, for example, Viacom pulled its content from DirecTV when DirecTV balked at a 30% cost increase. At that time, Viacom ran ads blaming DirecTV for the blackout. The ads featured some of Viacom’s popular cartoon characters.
Anticipating that Viacom might use such tactics again, the NCTC has proactively created website TVonmyside.com that member companies can use to educate customers about cable operators’ programming cost challenges.
“We are your source for timely information about TV contract disputes,” says a video on the site. “Our goal is to control excessive TV network fee increases . . . so that we can keep your bill as low as possible.”
An executive from another small cable operator, South Carolina-based Hargray Communications, told local news outlet Island Packet that Viacom is looking for a rate increase that was 40 times the rate of inflation.
Perhaps not coincidentally, the American Cable Association, which represents many of the same companies that are NCTC members, today praised the role of buying groups such as NCTC. “Without a buying group like the [NCTC] customers of small- and medium-sized cable operators would pay higher fees for their television service,” said ACA President and CEO Matthew M. Polka in a press release.
The press release was issued to call attention to a filing the ACA made with the FCC in comments about the commission’s new video competition report.
Telecompetitor thanks FierceCable for calling our attention to the developments with Viacom and the NCTC.
Update 1 – April 1: Read the follow up post, NCTC Letter Strives to Forestall Viacom Blackout for Rural Cablecos, for more details regarding the NCTC-Viacom dispute.
Update 2 – April 1: A deal has been reached between NCTC and Viacom avoiding a blackout. Read Viacom NCTC Deal Reached, Avoiding Rural Cable Blackout for the details.