Dish Network & Viacom Settle Their Differences

weshart writes "I haven't yet seen anyone mention the fact that CBS and other Viacom channels are back on DishNetwork. They've been unavailable for the past day and a half, as was reported earlier. No word on the details of the agreement; and the DishNetwork announcement doesn't say anything about whether or not they'll be raising their rates."

Comments

A few factoids...

[LostCluster]

Here's a few things we do know about the deal:

- One of the reported sources of conflict was Viacom's demand that Dish add the new Nicktoons network into their lowest base package, America's top 60. That didn't happen. Instead, the network will be added to one of Dish's more obscure packages, America's Top 180.
- The three notable Viacom-owned networks that weren't deleted from Dish Network, namely TV Land, SpikeTV and CMT had contracts that expired at a different time, and Viacom wanted those three networks to be tied to expire at the same time as the rest of Viacom's channels. Apparently, those three networks have had their contracts extended as part of this deal. No official statement on when they now expire, but I think we can all assume the next time things expire, everything will all expire together.
- Echostar had a pretty good anti-trust lawsuit working against claiming that the tactic of withholding the popular networks to force the purchase of unpopular networks is illegal because it's using a monopoly product (copyrighted content) to force the purchase of another product. If Echostar had won, this would send a shockwave through the industry because every content provider does this to every signal distributor. However, we'll never know the result of this suit because this deal agrees to dismiss all pending litigation between both companies.
- Every Dish Network Subscriber will recieve a $1 credit on their next bill, and those who also subscribe to a locals package that lost their CBS station will get a second $1 credit on their next bill as well. These will not be pro-rated down to pennies because the outage only lasted 36 hours. In addition, all Dish Network subscribers will get a coupon for a free pay per view movie, which is worth $3.99. The cash credits will cost the company at least $15 million, and allowing for the fact that some of the coupons will be unused the PPV movie offer should cost the company about $10-15 million. Ironic, because $25-30 million is about the total price increase Viacom was seeking.

Re:A few factoids...

[LostCluster]

This doesn't cost Dish Network anything, since it costs them nothing to provide the service and they are not losing out on money I would have otherwise paid them.

Nope. Dish has to pay the movie studios per viewing for the content on the PPV services. For every coupon redeemed, Dish will have to pay the movie supplier their cut of the fee despite the fact that Dish isn't collecting a fee.

Seems to have been in Dish's favor

[cmeans]

This article seems to have a bit more meat.

Re:Package Pricing

[lazytiger]

I was watching Charlie Ergen's chat show the other night and he explained a lot of things that you don't normally hear explained by a big company, let alone from the CEO. I am actually a bigger fan of Dish now than I was before. I really dig the fact that he comes on the air and takes calls and emails from his customers.

Regarding the packaging of channels, Charlie said that he wishes Dish could do ala carte, but they can't because companies like Viacom won't let them. Viacom (and Disney, and all the rest) explicitly lay out in their contracts with distributors which channels have to be bundled with other specific channels. It's not a matter of Charlie having double standards - he's simply not allowed to break up packages any more than you can.

Are you kidding?

[andih8u]

You think that the cable tv industry doesn't pull this kind of thing all the time? In order to get the same number of channels that I get with my current DirecTV system, I would have had to pay Comcast cable over $100 a month for their digital package, while DirecTV has more channels at half the price.

If anyone, the blame more likely rests on Viacom who will just assume that all cable/satellite companies should swoon at their feet for the chance to carry MTV and the rest of their garbage.

If you start getting the government involved in regulating something, you're going to end up with problems. Calling for regulation over losing VH1 classics for a day and a half is pretty stupid anyway.

What dish emailed me

[piles_of_spam]

I complained to dish and Viacom by email, warning dish that I would cancel the service if those channels were not restored (I don't really care who is to blame).
I got a response quickly from an actual person at Dish (I was impressed by this) but not from Viacom. The letter was apologetic, and directed towards my particular concerns, but suggested I voice my displeasure to Viacom as well; this I had already done. Today after the channels were restored I received this dish form letter, which you'll notice does not address price hikes (or a lack thereof):

Dear Loyal DISH Network Customer,

I am very pleased to announce that we've successfully reached a long-term agreement with Viacom to provide you with CBS and MTV Networks including MTV, Comedy Central, and Nickelodeon. I am happy to say that this agreement will allow us to continue to provide you the lowest all-digital price everyday.

I understand that it has been a difficult 36 hours to be without these popular channels. We appreciate your patience, your support for DISH Network and your continued business.

As promised, you will receive a credit on your next billing statement. In addition, we would like to thank you for all of your support by sending you a free DISH On Demand Pay-Per-View coupon that will allow you to view upcoming hits like "Cat in the Hat" and "School of Rock." The coupon will arrive in your April billing statement. Enjoy a movie on us.

Everyone at DISH Network will continue to fight to provide the best possible programming and services at the lowest possible price, every day.

Thank you for your loyalty and thank you for being a DISH Network customer.

Charlie Ergen

CEO

DISH Network

Re:I'm a Dish customer

[tenman]

$.06/mo/cust -or- $.72/cust/yr *more* than dish was already paying!!! That's $1,368,000/yr. This is about right when you consider that Dish paid ~$12,500,000/yr. for the recently expired programming contract. The addition of NickToons to the line up could have been worth the extra 1.3 million alone. Nickelodeon is an extremely compelling property to offer to viewers.

The major problem is where Viacom wanted Dish to put the two(2) extra channels associated with the new contract. Dish offers 60 channels with our basic package. Viacom wanted to put *2* more of its own station in with that package.

Our problem was along the lines of "what do we kick out of the Top60 package to make room, and is the NickToons channel more valuable to us than, say, a Disney? The answer is/was no. They wanted $.72/cust/yr for 1.9 million customers. The way the contract is written up now, we will pay then $.72/cust/yr for ~260,000 customers. That's a 1.18 million dollar savings for Dish. Viacom gets to add their channel; we still get to offer a programming line up that is good value to the consumer.; subscribers won't see an immediate impact on their bills...

Everyone happy? Sorry about the outage...