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Viacom vs. DirectTV: More Creative Destruction

The dust has settled: According to the Wall Street Journal, Viacom and DirecTV have declared a truce in their contract standoff, meaning DirecTV viewers can now go back to watching their SpongeBob, Daily Show, and Colbert Report. The seven-year agreement, worth hundreds of millions of dollars, was reached after DirectTV instituted a nine-day blackout of Viacom channels.

Their struggle is just another chapter in the internet’s ongoing destructive march through the media landscape. Whole industries have been caught up in this whirlwind, with newspapers being only the most well known victim—and the porn industry, as we noted last month, the most recent victim.

It’s worth noting in the DirecTV-Viacom fight that several cable companies, ostensibly competitors with DirecTV for subscribers, offered it support in its fight against Viacom. Dish Network, for example, is continuing its blackout of AMC Network’s channels because AMC has made episodes from previous seasons available on Netflix:

“These online deals undercut the value of the content they are providing for us,” said Dish Network chief programming negotiator Dave Shull, who foresees online video coming up in future negotiations.

“I’m hoping that they are getting the message that we are very serious about this position. I think whether it’s on Hulu or whether it’s streaming availability of the content elsewhere, it reduces the amount of money that we want to pay to the broadcasters or the other programmers.”

Cable revolutionized television three decades ago, and now things are changing again. For those unable or unwilling to adapt, the future will hurt.

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  • Neshobanakni

    “…was reached after DirectTV instituted a nine-day blackout of Viacom channels.”

    You’ve got it backwards. Viacom instituted the blackout.

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