Viacom, Dish Network Agree on Carriage Contract--Update
April 21 2016 - 12:11PM
Dow Jones News
By Keach Hagey and Shalini Ramachandran
Viacom Inc.'s channels will remain on satellite-television
provider Dish Network Corp.'s service after the companies agreed to
a multiyear carriage contract.
Terms of the deal weren't disclosed, although the companies said
the agreement would allow Dish subscribers to access Viacom content
-- including Comedy Central and MTV -- on Dish's Sling TV streaming
service.
The agreement comes as the traditional pay-tv business faces
increasing pressures because of shrinking profits for distributors,
rising costs of content and the proliferation of choices for
consumers beyond the bundle.
In addition, Viacom -- which operates Nickelodeon, MTV and
Comedy Central, among other channels -- is viewed as especially
vulnerable by some on Wall Street. The young audience for its
channels has been the first to abandon or avoid signing up for
expensive pay-TV packages in favor of cheaper, ad-free subscription
services like Netflix or free, ad-supported streaming sites like
YouTube and Snapchat.
The Dish agreement applies to 18 Viacom channels, including
Nickelodeon, Comedy Central, MTV, VH1, Spike, BET, CMT, TV Land,
Nick Jr. and Nicktoons.
Todd Juenger, an analyst at Sanford C. Bernstein, has long
argued Viacom is "uniquely vulnerable" to being the first place
where major readjustments to the pay-TV bundle will be made. He
became more convinced of that, he wrote this week, after reviewing
the growing pressure on distributors' businesses as cord-cutting
proliferates.
"If the current trajectories of ARPU [average revenue per user]
and affiliate fees continue at current rates, the average [pay-tv
distributor] would earn $0 on video subs by the year 2023," he
wrote. "So obviously something has to change. We believe Viacom is
the obvious place for [pay-tv distributors] to start."
Viacom's channel's ratings have fallen markedly since 2009, the
last time it signed a distribution deal with Dish, said Rich
Greenfield, an analyst at BTIG Research.
While the deal's financial terms weren't revealed, Viacom likely
was under pressure not to accept a significantly lower rate, Mr.
Greenfield said, because it has "most favored nation" clauses in
its contracts with other big distributors like Comcast Corp. that
would mean they had the right to those same low rates.
Wednesday, a Viacom spokesman said that so far this year, "our
networks represent nearly one fifth of cable viewership on Dish,
which gives Dish enormous incentive to renew our agreement."
Write to Keach Hagey at keach.hagey@wsj.com and Shalini
Ramachandran at shalini.ramachandran@wsj.com
Corrections & Amplifications
An earlier headline to this story's summary on the wsj.com home
page incorrectly said Viacom's channels had gone dark on Dish
Network. Instead, the channels remained on the satellite-television
provider as negotiations continued past the deadline.
(END) Dow Jones Newswires
April 21, 2016 11:56 ET (15:56 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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