President and CEO Matthew M. Polka commented, “The pay-TV industry is trapped in a perpetual state of crisis with no end in sight for the obvious reason that avaricious programmers like Viacom demand outrageous fees for their channels. Worse, Viacom insists on being richly rewarded not for the quality or popularity of its content but for its sheer ability to muscle distributors — including small, independent cable operators with no bargaining leverage – into overpaying for marginal services.”
“At a minimum,” said Polka, “Viacom should end its blackout immediately and call off its campaign to impose excessive rate hikes on millions of DirecTV customers.”
He also discussed the internet blackout, saying, “Viacom should also immediately restore access to online programming for which customers of other cable and satellite providers have already paid. Viacom’s decision to deny access to online content to all consumers in order to exert greater pressure on DirecTV is another example of Viacom’s total disdain for consumers in pursuit of its goal of dominating distributors in order to reap windfall profits.”
Polka then added broadcasters into his list of complaints. He stated, “In the past six months, we’ve seen an abrupt spike in the number of broadcaster- and cable programmer-initiated blackouts in lieu of amicable agreements putting the interests of consumers above all else. Without a doubt, programmers like Viacom that show only callous disregard for consumers are clearly inviting a regulatory response from Washington, D.C., where lawmakers are showing increasing interest in updating rules and laws that are seen as contributing to market malfunctions and rampant consumer harm.”
RBR-TVBR observation: It is ridiculous for ACA to lump in broadcasting when discussing the Viacom/DirecTV dispute. According to SNL Kagan figures, broadcasters will get a miniscule 7% of MVPD retransmission outlays this year. You read that right: 7%.
Despite all the MVPD wailing and gnashing of teeth about triple-digit increases in broadcast fees, broadcasters aren’t projected to break into a double-digit share of the retransmission pool until 2015. And when that happens, basic cable will still be getting just short of 90% of the pool.
The facts are simple: If MVPDs need to get a handle on programming costs, they’d better focus on where the money is, not on the broadcast stations that bring an MVPD large numbers of viewers (read subscribers) and in many cases provide the MVPD’s only source of local programming and emergency information.