Time for a Consumer Revolution
In July 2012, DirecTV had a nine-day blackout of channels from Viacom after the two companies could not come to an agreement before their existing deal expired. A total of 17 channels went dark, including Comedy Central, MTV, and Nickelodeon.
Why you ask?
Simple greed. According to published reports, Viacom wanted upwards of $700 million per year to allow DirecTV to show their channels. In the previous deal, Viacom made roughly $500 million per year.
Uh…don’t commercials pay for the production of content?
Apparently not.
Viacom and other content distributors have this type of deal with all the major cable and satellite companies. So clearly they are pulling in some serious cash from these deals – above and beyond revenues from the commercials.
During negotiations, DirecTV claimed they spend $10 billion per year on programming. Assuming that’s largely true, do you think the price of their service will be going down anytime soon?
Not a chance.
Major content providers such as Viacom want the system to be preserved largely as is, and the satellite and cable TV companies fall right in line. Neither side really cares what consumers want, such as a la carte plans where you can choose specific channels rather than bump up to a more expensive “package” just to get the one channel you want. They don’t seem to be aware that with so much content available, consumers can find satisfying choices elsewhere for free or very cheap.
This fight between Viacom and DirecTV was just one of many recent battles. Similar face-offs between content providers and cable companies have been occurring with growing frequency – Dish Network, Time Warner, and others have been part of the fray in recent years.
A comment on a New York Times blog covering the DirecTV vs. Viacom showdown caught my attention and offers a good microcosm of how large entertainment corporations just don’t get it:
“What! The channels are back! I hadn't noticed, nor did we miss them.
Our kids are just as happy with ‘Perry the Platypus’ as they are with ‘Sponge Bob’. When the channels were removed, in our household at least, we didn't miss a beat… We simply watched something else.”
If you are reading this book, you get it.
Kudos to you!