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Sean Daly, Michelle Stark and Sharon Kennedy Wynne

Viacom, Bright House and Time Warner Cable's New Year present: No more MTV, Nickelodeon or 19 other channels

31

December

Dora_the_explorer5242 Yet another big media story has broken while I am on vacation: This time, it's the dispute between Time Warner Cable, Bright House Networks and Viacom over retransmission fees, which threatens to see nearly two dozen cable channels yanked from the cable company's systems by 12:01 a.m.t omorrow, including MTV, VH1, Nickelodeon, CMT, TV Land and Noggin.

If you've turned on a Viacom cable channel today, you've seen the odd "crawl" at the bottom of the screen urging viewers to call Time Warner and Bright House and complain about the impasse; ads from Viacom showing popular cartoon characters such as Dora the Explorer and SpongeBob SquarePants crying also ran in several newspapers, including the Tampa Tribune.

The cable companies say Viacom should keep the channels on while negotiating an increase in fees; Viacom says no way. The increases Viacom wants are reportedly between 22 and 26 percent per channel.

According to the Associated Press, the channels that would be affected are: Comedy Central, CMT: Pure Country, Logo, Palladia, MTV, MTV 2, MTV Hits, MTV Jams, MTV Tr3s, Nickelodeon, Noggin, Nick 2, Nicktoons, Spike, The N, TV Land, VH1, VH1 Classic and VH1 Soul.

Viacom, like many big media companies, has struggled to deal with huge debts in a crumbling economy. So it's no surprise that the corporation is playing hardball to try raising its retransmission fees -- the amounts paid to cable channels by cable companies for the rights to retransmit their content (because its channels are among the most popular, Forbes reported Viacom earns $300-million annually in such fees).

These payments have a been a source of ire in the media business for a while. Cable companies blame them for their ever-increasing subscription fees. And broadcast stations and networks wonder why they don't get similar payments for the way cable channels rebroadcast their content. Cable companies might respond that they are required to carry broadcast stations by the government; making them also pay for the channels might seem unfair.

This entire mess is a result of the odd way in which our cable and broadcast TV systems have evolved. As the crumbling economy and changing technology shift the media landscape, expect more food fights like this one to break out.

Right now, given that these cable channels make some of their revenue from advertising it would seem that a scenario where programming gets yanked will hurt both sides. So the question is: Which side is worried it will get hurt worse? And can this situation get pulled back from the brink by midnight?

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[Last modified: Wednesday, July 21, 2010 2:54pm]

    

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