Satellite cable provider, Dish Network, said that it is prepared to drop MTV and Nickelodeon’s parent company, Viacom, if an agreement on a new deal cannot be reached soon between the two parties.
Dish and Viacom have reached a monumental stalemate which the LA Time reports, could result in a total blackout between the cable provider and media company.
Viacom currently serves nearly 14 million Dish customers with their channels. Negotiations have reportedly been transpiring for months and is slowly approaching its 9 p.m. (Pacific Time) deadline on Wednesday.
Dish Chairman and CEO, Charlie Ergen, claims that the cancellation could be permanent if an agreement is not reached between Dish and Viacom.
Ergen also mentioned that despite Dish threatening to drop Viacom from their services, the two companies did make progress in regard to a comprehensive deal last week.
“There probably is a path to continue carriage, but it’s not done yet. And obviously the devil is in the details.”
Viacom investors, on Tuesday, sent shares of the company from $1.74 a share to nearly $40 due to fear of Dish dropping Viacom.
Ergen said that bottom line, “Dish will not reach a deal with Viacom until the economics made sense,” even if that results in Dish dropping Viacom altogether.
Dish’s CEO added that he’d much rather take the high road in dropping Viacom altogether than bicker with cable companies that are only interested in clinging onto the folding traditional business model of the TV industry in an age where consumers are turning to cheaper and more convenient streaming services.
“I would rather spend my time with companies who are a bit more foward-thinking.”
The Dish CEO was referring to Walt Disney’s prompt endorsement for their internet streaming service, Sling TV.
Ergen then added this about Viacom. “You can put your head in the sand. Or you can say, hey, the world is changing and let’s go out and change with the world,” he said boldly as Twitter reacted to his maverick disposition akin to Rocky Balboa’s.
Contrary to his snarky remarks about Viacom and his audacious willingness to drop the cable company, the Dish CEO implied that he would ultimately like to see something work out between the two companies.
“We’d like to get a deal done. Seven years ago, Viacom was a lot stronger on our systems than they are today. But they still have valuable stuff.”
What Happens If Dish Really Goes Through With Dropping Viacom?
Then Dish knows that it will lose the aforementioned “valuable stuff.” Completely blocking out Viacom will be a risky move granted that Dish has already lost a considerable amount of customers in the last two years to other services and cable providers.
If Dish drops Viacom they will lose Nickelodeon, VH1, MTV, and Comedy Central — all highly viewed networks. The move could spark further outrage among their customers causing the Dish exodus to accelerate significantly.
What Has Viacom Got To Lose From Being Dropped?
Viacom will not be exempt from taking a hit by the power move either. If Viacom is dropped by Dish, they will risk losing millions of annual revenue in affiliate fees from Dish.
Viacom is already suffering from downward spiraling stocks in their company. Therefore, Viacom and Dish both have a lot to lose in this conglomerate game of chicken.
Viacom representatives recently gave their opinion on possibly being dropped by dish.
“Consumers have spoken loudly and clearly. Over the past 24 hours, hundreds of thousands of concerned subscribers have reached out to implore Dish to negotiate reasonable terms with Viacom for continued carriage of our networks.”
Ergen warns that Viacom and Dish are just the beginning of cable providers and networks fighting each going forward.
[Photo by Alberto Rodriguez/Getty Images]