Viacom yanks free online episodes

By Lynette Rice, EW

updated 10:30 AM EDT, Thu July 12, 2012

Fans of shows like "Jersey Shore" are left in the dark since Viacom pulled its online episodes.

(EW) -- As the dispute between Viacom and DirecTV continued Wednesday, the conglomerate yanked access to some of its more popular programming that was available free on company websites. Fans can no longer watch full episodes of shows like "SpongeBob Squarepants" and "iCarly" or "Jersey Shore" and "The Daily Show," which is sure to further anger the 20 million DirecTV subscribers who continue to find a dark screen when they change the channel to Viacom-owned nets like Nick, MTV, Comedy Central and VH1.

"Viacom is now not only holding DirecTV customers hostage, but all online viewers as well," according to a statement from DirecTV. "Is this just another underhanded negotiating tactic, or does this mean that Viacom will no longer offer its content free online?"

The latter is certainly possible. Ratings for Viacom's once shining star, Nickelodeon, have dropped double-digits in the last year while some of its popular shows were available online for free -- one likely reason why DirecTV is refusing to pay the 30% more Viacom wants for all of its channels.

The carriage agreement between the two expired last weekend; by midnight on Tuesday, all 17 Viacom channels went black on the satellite provider. "That's over $1 billion on top of what you were already paying for not only MTV and Nickelodeon, but also all of their other channels that you might never watch. You should be able to decide which Viacom channels you want and which you don't," according to a statement on DirecTV's website.

A spokesman for Viacom says it is still offering lots of free episodes online of its programming; it just removed some of them because they were only meant as a marketing tool.

Meanwhile, Cox Communications took the unusual step to back DirecTV, which is a competitor, in its fight against Viacom. "This is a reflection of an unbalanced multichannel video business model that has two major effects: continued significant increases in the cost of programming that are the main driver of rising cable and satellite TV service bills, and wide disparities between what large and small distributors pay for programming, resulting in similar disparities in what respective customers pay for service," said Bob Wilson, Cox's senior VP of the cable operator. Cox has almost 5 million subscribers.

Analysts, on the other hand, chided DirecTV for allowing the Viacom nets to go dark. "While we appreciate DirecTV's goal of maintaining robust free cash flow and an aggressive share repurchase program, we believe losing a wide array of programming valued by their subscribers could seriously harm the company," according to Richard Greenfield of BTIG Research. "Nickelodeon, despite its ratings declines in the past year, remains the No. 1 cable network in the US and Nick actually outperforms in DirecTV households. Hard to imagine DirecTV maintaining its current subscriber base and/or attracting new subscribers without its most viewed cable network."

And how; fans took to Twitter on Wednesday to voice their displeasure with the carriage dispute. By Wednesday night, Viacom was a trending topic with outspoken show runners like Sons of Anarchy's Kurt Sutter even weighing in with pejoratives that we, unfortunately, can't print here.

See full story at EW.com.

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