Time Warner Faces Midnight Deadline For Viacom Content Deal

Counting Down More Than A New Year

TIME WARNER CABLE has until midnight TONIGHT (12/31) to reach a carriage fee deal with VIACOM, or else the content provider will pull MTV, COMEDY CENTRAL, NICKELODEON and 16 other channels from the cable system. If so, MTV, VH1 and popular shows such as "The Daily Show" and "SpongeBob SquarePants" will be unavailable to TIME WARNER's to 13 million subscribers at the turn of the New Year.

"The issue is that they have asked for an exorbitant increase in their carriage fees and their network ratings are sagging," TIME WARNER CABLE VP ALEX DUDLEY said. "Basically we're trying to hold the line for our customer."

VIACOM is reportedly asking for fee increases in the range of 22-36% per channel, totaling tens of millions of dollars per year. In a statement, the media company noted the price hikes would be less than 25 cents a month per subscriber. Its current fees comprise less than 2.5% of the TIME WARNER cable bill, while American viewers spend a fifth of their TV time watching VIACOM shows. "We make this request because TIME WARNER CABLE has so greatly undervalued our channels for so long," it said.

DUDLEY, who described the negotiations as "tense," responded that the main sticking point is that most of VIACOM's popular shows are rerun on websites where it collects advertising revenue that it doesn't share with TIME WARNER. "We don't think that's fair," he said. "They're trying to have their cake and eat it too online, where anybody can get it for free." 

More details here.

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