Biggest loser in DirecTV-Viacom feud? Both. (+video)
The standoff between DirecTV and Viacom risks accelerating the move away from television to iPads and smart phones – and the expectation of access to content anywhere, anytime.
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Viacom declined to comment beyond its blog posts, in which company spokesman Mark Jafar writes, “DirecTV dropped the channels without giving Viacom advanced warning. The last time Viacom was contacted by DirecTV was at approximately 11:00 a.m on Tuesday morning.”Skip to next paragraph
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In its official statement, Viacom said: “We are deeply disappointed that DirecTV dropped Viacom’s channels before our midnight deadline this evening, severing our connection with its nearly 20 million subscribers nationwide. We proposed a fair deal that amounted to an increase of only a couple pennies per day, per subscriber, and we remained willing to negotiate that deal.”
Whoever is “right” in this battle, both sides lose, says David Bartlett, senior vice president of Levick Strategic Communications, a crisis management firm in Washington. “This puts the customers in the middle of a corporate fight,” he says. “This is precisely the wrong tactic.”
Customers, he adds, don’t care who is right. They care about their programming.
The biggest factor driving customer choice is convenience, says Edward Arke, associate professor of communication at Messiah College in Grantham, Pa. “Whoever can provide the most convenient way to access the programming will be the 'winner,' ” he says via e-mail.
That's why the standoff between Viacom and DirectTV carries such long-term risk to the the television industry. "With DISH and DirecTV as really the only competition to cable, depending on the length and subsequent damage Direct sustains as a result of the impasse, this has the potential to send waves throughout the market,” writes Professor Arke.
Moreover, customers can expect more, not less of this sort of disruption as the marketplace sorts itself out. From the 1920s to the '80s, there was a nice, stable model for who pays how much to whom, says Robert Thompson, founder of the Bleier Center for Television and Popular Culture at Syracuse University in Syracuse, N.Y. But with the advent of cable, then satellite, then the Internet, “the whole business model has been thrown up in the air," he adds. "Nobody knows who should pay how much and to whom. It’s going to be awhile before the smoke settles around this ship."