Viacom, Time Warner Cable settle contract dispute
Viacom had threatened to pull 19 of its cable channels, including Nickelodeon, MTV, VH-1 and Comedy Central, from the cable firm's systems.
Facing a backlash from TV viewers furious at the prospect of losing "SpongeBob SquarePants" and "Dora the Explorer," two media giants reached a new programming agreement that keeps those popular cartoon characters on the channels of the country's second-largest cable operator.
Viacom Inc. had threatened to pull 19 of its cable channels, including Nickelodeon, MTV, VH-1 and Comedy Central, from the Time Warner Cable Inc. systems at midnight Wednesday when their previous two-year contract expired.
At midnight in New York, minutes into the new year, Viacom granted an extension that allowed the two sides to keep talking. They then clinched a deal. The New Year's Day accord avoided a blackout of Viacom's programming in 13.3 million homes in the U.S. served by Time Warner Cable Inc., including nearly 2 million in the Los Angeles area.
The two companies said they expected to finalize the details of the agreement over the next several days.
The resolution came after a long day of squabbling as each side accused the other of greed, and irate customers jammed Time Warner Cable's call centers, saying they wanted their MTV and Nickelodeon. The reaction from viewers was stoked by Viacom's costly media campaign in print and on television, much of it targeted at kids.
"We are pleased that our customers will continue to be able to watch the programming they enjoy on MTV Networks," Glenn Britt, chief executive of Time Warner Cable, said in a statement released about 2 a.m. New York time. "We are sorry they had to endure a day of public disagreement as we worked through this negotiation."
Philippe Dauman, chief executive of Viacom, said he was glad to begin the new year in detente with one of Viacom's leading distribution partners: "It's gratifying that we could reach an agreement that benefits not only our audiences but that is also in the best interest of both of our companies."
Viacom had purchased newspaper advertisements, featuring a tearful Dora the Explorer, and placed an on-screen crawl on its channels to alert viewers to the impending programming blackout. The ads encouraged viewers to complain to Time Warner Cable.
The tactic worked -- parents reported having to soothe children who were upset over the prospect of not being able to watch their favorite shows on Nickelodeon, including "SpongeBob SquarePants."
