UPDATE: A Viacom spokesman said Thursday morning that negotiations with Dish are continuing.

PREVIOUSLY: Viacom’s 18 channels remained intact on Dish early Thursday even as the midnight ET deadline for the sides to reach a new carriage agreement passed.

The fact that the channels stayed on past the contract expiration deadline indicates that the two sides are continuing to negotiate in an effort to avert a blackout that threatens to hit the bottom lines of both companies. Dish’s satellite TV service reaches about 13.8 million subscribers around the country.

The carriage battle took on heightened urgency after Viacom warned of the looming blackout yesterday, causing its stock to drop more than 8% in trading Tuesday. Dish reported its first-quarter earnings on Wednesday, giving CEO Charlie Ergen a platform to suggest that Dish was ready to go to the mat and drop the Viacom channels – notably Nickelodeon, Comedy Central and MTV —  if the sides couldn’t come to a deal.

Dish and Viacom have been trying to hammer out a new deal for months under a long-term extension of a seven-year-old contract that expired in January. But earlier this week, Viacom notified Dish that it would revoke that extension as of midnight ET on Wednesday.

During his earnings conference call with analysts, Ergen said Wednesday he felt there had been progress in the talks recent days but he also strongly suggested that Dish was not willing to overpay to avoid the disruption.

Ergen’s comments made it clear that some of the hurdles in the deal are related to granting Dish rights to incorporate Viacom channels into its next-generation services such as its authenticated streaming platform and its Sling TV over-the-top product. Sling is aimed at drawing younger and budget-conscious consumers with a slimmer package of channels for $20 a month.

Reps for Viacom and Dish declined comment.

(Pictured: Comedy Central’s “The Daily Show with Trevor Noah”)