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Charter to Move Eight Viacom Networks Back to Basic Tier Under Multiyear Renewal

Charter Communications will return Comedy Central, Nickelodeon, MTV, VH1 and four other Viacom cable networks to its most widely distributed tier, under the terms of the companies’ multiyear carriage renewal.

The parties reached a deal in principle in October — after months of haggling — and have since hashed out the final terms. Under the renewal, Charter will include Viacom’s Nickelodeon, BET, MTV, Comedy Central, Spike (rebranding as Paramount Network), VH1, TV Land and CMT in its Spectrum Select entry-level cable package.

The new deal comes after Charter moved those networks to higher-priced tiers in April 2017, a move that has been a bone of contention between the two companies in subsequent talks. Viacom CEO Bob Bakish this summer told investors that the cable operator didn’t contractually have the right to re-tier its nets in that manner.

Other Viacom networks will continue to be available on the higher-priced Spectrum Silver or Spectrum Gold tiers. Subscribers will continue to have access to Viacom’s content on both set-top boxes and through both Charter’s and Viacom’s authenticated apps.

Under the pact, Viacom and Charter also entered into a partnership for co-production of new original content that will exclusively premiere for subscribers on Charter’s platform in the U.S. Under the agreement, Viacom’s Paramount Television and Charter will jointly produce programming. Viacom will distribute the co-produced programming internationally, as well as in additional domestic markets, including potentially on Viacom Networks, after Charter’s premiere period.

Additionally, the companies have agreed to collaborate on the use of anonymized viewership data, on advanced advertising opportunities, and on addressing unauthorized password sharing. Financial terms weren’t disclosed.

Charter CEO Tom Rutledge has on several occasions times complained about users sharing passwords for TV Everywhere authenticated services — arguing that such illicit access is putting “pressure” on the pay-TV bundle.

“There’s an enormous ability for people to receive free content because of the way content distributors are securing their product so ineffectively,” Rutledge groused on Charter’s earnings call last month.

Charter, the second-largest cable operator in the U.S. after Comcast, had 16.5 million residential video customers as of the end of the third quarter. The operator, which last year completed the acquisitions of Time Warner Cable and Bright House Networks, dropped 104,000 net residential video customers in Q3 (more than double the losses in the year-prior period).

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