Viacom Demands Huge Hikes From Hundreds of Cable Companies
by Karl Bode 08:41AM Monday Mar 31 2014 Tipped by Zoder
If the last few weeks are any indication, annoying retransmission fee feuds (and the annoying content blackouts that accompany them) aren't going away anytime soon. Viacom is said to be demanding massive carriage fee hikes, something that's angering hundreds of small cable operators across the country
. The National Cable Television Cooperative (NCTC), which is negotiating with Viacom on behalf of around 700 small cable providers, seems unable to get Viacom to budge ahead of a new contract, with the current contract expiring this evening.
Cable One CEO Tom Might states Viacom is looking at hikes of up to 100%:
Cable One president and CEO Tom Might said Viacom is asking for a rate increase greater than 100 percent, “even though viewing is down on 12 of their 15 networks since 2010 – some by more than 30 percent." He said Cable One has asked Viacom to either reduce its rates or allow it to drop some of their less popular networks to reduce the total cost." So far, they have refused both reasonable requests. In any other business, when there is less demand, the price goes down, not up,” Might noted.
Cable One states that if a deal can't be struck by the end of today, they'll be replacing the fifteen Viacom cable channels in their lineup (including Comedy Central and MTV) with other channels.
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|reply to TAZ |
Re: And then
said by TAZ:How naive. Where is the money going to come from to make many shows and see which ones are hits and which ones are flops? The quality of programming will drop dramatically, if only because the volume of content being available on a "trial" basis will be decimated.
The future is to consume by the show. Pay by the episode or subscribe to a show/season at a reduced price. (Already being done.)
Not to mention that the niche content that most of the people who bellyache about "a-la-carte" consume will be the most outrageously priced, as the demand for it will be a fraction of that of the mainstream content (sports, MTV, etc.). That niche programming may even cease to exist under a supply/demand model.
So, if you think paying $100 a month for 300 channels is bad, wait until you're paying $100 a month for the 4 or 5 shows you actually watch, and have no other content available to you, ever, under any circumstances, unless you pay more money to the content cartels. The current system *works*. There, I said it. IT WORKS!!
I, for one, enjoy knowing that should I choose to want to watch something that I wouldn't normally, I have the option to do so without any additional cash extraction from my wallet. Relatives sometimes visit, they may want to watch the Military Channel, their kids may want to watch some Nickelodeon or Disney Channel. I don't watch those channels regularly, but something might catch my eye one day.
If I was only "buying" the three or four shows I watch religiously, I would never have the chance to be exposed to any other content outside my box. So enjoy the closed-minded, compartmentalized future of "a-la-carte"! Where you can pay more and get less. I'm sure you will all eventually get your way once the providers and networks realize how much more money they can get from you idiots while providing less product overall.
I'm having issues understanding this.
Ok, so my background is in logistics and I'm going to school to prepare myself for the Certified Public Accountant exams. I can understand what Viacom is trying to do (restrict supply to both create artificial demand and the sense of exclusivity).
However, what they're doing is not consistent with the way you keep a business growing. If a business isn't growing, then it is dying. A business like mass media can only survive by selling to as many people as possibly (and by specifically targeting those who can afford it). You either target your product and sell it to those with median-income, or your product will end up at the end of a spectrum. In other words, if you fall out of favor with those in the middle class, then your product either ends up in the hands of wealthy customers (whose demands are FAR more costly), or you end up with the month-to-month crowd (who will take your crappy product, but who is much less likely to be able to afford it).
Because Viacom's customer is captive in the current environment, their risk is lessened thanks to the lack of competition. Their strategy is to squeeze the cow for all it has. This latest cable race is simply a cash grab, and a desperate attempt to make the numbers look good before the company finally implodes (or is forced to sell their assets). The CxO's and controlling interests know what they're doing, the only loser here are the customers, and the thousands of employees who will soon need to look for jobs elsewhere.
|reply to TOPDAWG |
Re: And then
Good, the business model needs to die.
People will bitch about their missing channels then the cable folks will cave pay fees and pass the cost to the customer who will cry about their cable bill being so high when in fact they cried about the channels missing that caused the hike.