The game of chicken being played with programming

In what is becoming a common occurrence in the entertainment world, Dish Network avoided a blackout of all Viacom properties (Comedy Central, Nickelodeon, MTV, BET, etc.) with a last-minute deal to secure this critical programming. This is just the latest in a long history of brinkmanship between cable and satellite providers, and the owners of programming.

It went to the bitter end, but Viacom needed a boost to its stock price, and Dish’s 14 million subscribers might make a meaningful dent in its advertiser rates, as well as setting a precedent that might come back and bite it in the you-know-what:

“News of the deal should give Viacom shareholders relief. The stock was up about 5% on Wednesday after Ergen’s comments and soared 9% ($3.41 per share) to $40.70 each in early trading Thursday. Analysts had feared that losing Dish for any length of time would affect future carriage deals with other distributors and set the stage for continued pushback against other content companies concerning the high cost of programming.”

Not that Dish was in the driver’s seat either:

“Dish was also incented to do a deal after losing about 23,000 pay TV customers in the first quarter, a loss that was tempered by gains in the Sling TV service. MoffettNathanson principal and senior analyst Craig Moffett estimated that Dish lost about 158,000 satellite TV customers in the quarter, offset by a gain of 135,000 Sling TV subscribers. Some analysts had predicted that losing Viacom could result in as many as one-third of Dish customers heading for alternative providers.”

This is further proof that there is significant pressure to produce and own programs to avoid these showdowns, and with the advent of new means of distribution, these battles will morph into different battles with new stakes.

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