Viacom, Time Warner Cable Fight Over Cost Of Comedy Central, MTV

from the and-so-it-goes dept

While this happens pretty frequently, you can bet that battles like the one going on between Viacom and Time Warner Cable are going to become more and more bitter in the next few years. Unless an agreement is reached (which is likely), Time Warner Cable customers may lose access to popular Viacom channels such as MTV, Nickelodian and Comedy Central. The issue is that Viacom wants to significantly raise the costs to TWC for those stations (between a 22% and 36% price increase). TWC would just pass those costs on to consumers, and the company accurately realizes that this would seriously piss off customers at a time when customers are increasingly realizing that they can drop cable TV and just go online for much of the programming they want.

And that, actually, is part of the issue. One of TWC's big complaints is that Viacom now offers most of the shows on those channels for free online -- where TWC isn't able to get any of the associated ad revenue. The real question is who is in a stronger bargaining position. If TWC dumps Viacom stations, and people start realizing they're fine with just being able to view the content online, both TWC and Viacom will likely lose out (the ad revenue that Viacom gets online won't come close to matching the carriage fees from TWC). The whole thing is a big game of chicken, but we're going to see it play out many more times, as the relative value of the cable provider as the exclusive delivery mechanism for television content starts to decrease. Of course, that only makes the content companies want to increase prices more to make up for the loss -- and the cycle actually accelerates. Both sides stand to lose out unless new arrangements are reached.

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