Conglom walks away from DirecTV negotiations; ratings suffering

Viacom has walked away from negotiations with DirecTV on a carriage agreement to restore 26 channels to the satcaster’s lineup, the conglom disclosed Wednesday.

As the standoff between the companies goes into its second week, it’s clear the blackout is having a meaningful impact on viewing patterns for Viacom cablers and rival outlets.

The satcaster responded to Viacom’s pullout from talks with a statement claiming it had all but accepted Viacom’s latest proposal when the deal was scuttled by a last-minute bid to include the Epix pay TV net at a cost of roughly $500 million.

But a Viacom spokeswoman refuted that claim, saying DirecTV was given several different compromise proposals including ones without Epix attached and one with Epix bundled with significant incentives for the satcaster to carry that premium movie service for the first time.

DirecTV claimed it wants to sign a deal on the table, though it didn’t specify which deal. “We are ready to close this deal at anytime and restore those channels to our customers,” the satcaster’s statement read.

Denise Denson, Viacom exec VP of content distribution, disputed DirecTV’s assertion. “It’s important for the consumers to know that negotiations are not ongoing,” she said.

The war of words shows how far apart the companies have grown since July 10, when the signals to 17 channels, as well as nine high-def channels, went dark after the companies failed to reach a new agreement. The companies are haggling over subscriber fees for the collection of cablers, which include MTV, Nickelodeon, Comedy Central, BET and CMT.

Of particular concern to Viacom is what it sees as DirecTV’s messaging to consumers that they are working toward a deal. Asked to characterize the nature of the negotiations, Denson said she and her lead-negotiation counterpart on the satcaster’s side, Derek Chang, have spoken on the phone for only about 10 minutes per day since the blackout began. “If that counts as a productive negotiation, that’s a surprise to me,” she said. “I’ve never seen negotiations like that roll this way in my entire career.”

Denson added that negotiations got off to a bad start last week at the Sun Valley media conference when Viacom CEO Philippe Dauman offered a compromise proposal directly to DirecTV CEO Mike White, who did not respond, Denson said.

The emergence of Epix as a bone of contention between the companies offers a new twist in the stalemate, which was never understood to be entirely about money. Viacom-owned studio Paramount Pictures is one of the principals behind the movie channel along with MGM and Lionsgate. Epix, which is available to over 30 million homes, has not been able to crack the industry’s top three multichannel vid providers, Comcast, DirecTV and Time Warner Cable, since its 2009 launch.

An apples-to-apples comparison of Nielsen data from Monday and Tuesday of this week to Monday and Tuesday of last week — the last two days on which all Viacom nets were available to DirecTV’s 20 million U.S. subscribers — shows that nearly all of the Viacom properties have lost viewers. And that includes top shows like Comedy Central’s “Tosh.0″ and VH1’s “Love and Hip Hop: Atlanta.”

The biggest ratings impact can be seen among viewers under 12, with Disney cablers and other rivals the clear beneficiaries.

Looking at the numbers for the top kids networks, Nickelodeon lost 22% of its 2-11 audience this week (713,000 vs. 919,000 last week) while Nick Jr. has lost 34% (300,000 vs. 456,000). Their losses have contributed to gains elsewhere: Market leader Disney Channel shot up 13% (1.29 million vs. 1.14 million), Cartoon Network has edged up 4% (778,000 vs. 751,000), Disney XD surged 24% (322,000 vs. 260,000) and Hub is up 2% (97,000 vs. 95,000).

Nickelodeon has been losing viewers for a while now, but the DirecTV dispute seems to be accelerating the trend. (As an example of how the net has been affected, last week marked the first time ever that Disney Jr. pulled ahead of it among total-day viewing by kids 2-5.)

The Viacom networks targeting adults have seen mostly modest declines.

In total-day viewership, TV Land is down 1% (479,000 vs. 484,000), MTV is off 5% (442,000 vs. 467,000), VH1 is down 6% (396,000 vs. 422,000), Comedy Central has lost 7% (386,000 vs. 416,000), Spike is down 14% (358,000 vs. 417,000) and BET is off 10% (325,000 vs. 360,000). Smaller nets like MTV2, CMT and Logo are all down as well.

Only Nick at Nite is up, rising 18% (684,000 vs. 582,000) thanks to the return this week of top show “Victorious.”

The top Monday-Tuesday nighttime shows on the nets are down, too.

VH1’s Monday hit “Love and Hip Hop: Atlanta” — basic cable’s No. 1 series in adults 18-49 last week — has gone from an average of 3.4 million viewers last week to 2.7 million this week (down 21%). On the same night, MTV’s “Teen Wolf” shed 23% of its aud (1.33 million vs. 1.72 million).

And among Tuesday shows, Comedy Central’s “Tosh.0″ dropped 20% this week (1.10m vs. 1.37m), MTV’s “Teen Mom” tumbled 28% (860,000 vs. 1.19 million) and Spike’s “World’s Worst Tenants” slid 10% (750,000 vs. 964,000).Comedy Central’s “The Daily Show with Jon Stewart” was in reruns last week. But its average aud so far this week (1.36 million) was down 19% from its average for originals in June.

The DirecTV-Viacom dispute could send the satcaster’s subscribers in search of missing content to a variety of digital platforms, which may be seeing a usage uptick as a result of the blackout.

But on the Viacom channels’ various websites, DirecTV subs may be disappointed. Viacom pulled full-episode online access to recent programming across its channels after DirecTV issued recommendations to its subs that they seek out the shows they were missing there. This week, however, Comedy Central restored episodes of “The Daily Show” and “The Colbert Report” after Stewart took to the air Monday to mock Viacom’s decision.

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