Viacom Networks to Return on Suddenlink Communications
May 25 2017 - 7:21PM
Dow Jones News
By Ezequiel Minaya
Viacom Inc.'s television networks will make at least a limited
return to the lineup of Suddenlink Communications, ending a more
than two-year dispute over costs to carry the media giant's
channels.
Suddenlink parent Altice USA, the U.S. arm of French mogul
Patrick Drahi's Altice NV, said Thursday it reached an advertising
and content distribution agreement with Viacom that would return
some of the company's channels to Suddenlink customers. The
companies didn't say which Viacom channels would return to
Suddenlink.
The deal also involved an early renewal of Viacom channels with
Altice subsidiary Optimum.
Suddenlink was the largest of a group of some 60 small cable
operators that dropped Viacom in 2014, saying that the company was
asking for a nearly 50% increase in so-called carriage fees. The
fees are a crucial source of revenue and operate as an important
profit driver for companies such as Viacom.
Suddenlink has about 1.1 million subscribers, according to a
Sanford C. Bernstein & Co. report. Altice acquired the St.
Louis-based cable operator in 2015.
Viacom, which owns networks such as Nickelodeon, Comedy Central
and MTV, said at the time that the defections represented about two
million subscribers, or about 2% of its subscriber base.
At the time of the break between the companies, there were wider
Wall Street jitters that the development was a bad sign for Viacom
as it entered renewal negotiations with larger pay-TV
distributors.
Viacom had played down the defection, but Chief Executive Bob
Bakish has said he would pay special attention to mend frayed
relations with traditional distributors.
"We are delighted to extend and strengthen our successful
relationship with Altice USA, ensuring that loyal fans across the
country will have access to Viacom's must-see content," said Tom
Gorke, Viacom's executive vice president of content distribution at
the company.
Earlier this year, Viacom said it would narrow its strategic
focus to six key channel brands -- Nickelodeon, Nick Jr., MTV,
Comedy Central, BET and the soon-to-be-rebranded Spike -- out of
about two dozen.
Mr. Bakish has said he believes the six core brands could
ultimately be the anchor of a cheap, skinny "entertainment pack" --
without sports -- that pay-TV distributors could sell for as little
as $20 a month.
Todd Juenger, an analyst with Sanford C. Bernstein, questioned
how much leverage Viacom will have in negotiating new agreements
with larger cable operators after the Suddenlink deal.
"Now Viacom seems to have proactively agreed to a narrow
distribution footprint with Altice," said Mr. Juenger in a report.
"Why, then, would Comcast or DTV or any of the larger MVPD's agree
to broader distribution of networks that Viacom themselves have
deemed 'non-core'?"
In efforts to restore lapsed partnerships with traditional
distributors, Mr. Bakish said he wants to increase the use of
data-driven advertising products to help cable operators increase
the value of the local advertising spots they sell.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
May 25, 2017 19:06 ET (23:06 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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