Viacom Zaps Suddenlink

If you are a Suddenlink cable subscriber, on Oct. 1 you lost your MTV and can’t get your news from the Daily Show‘s Jon Stewart anymore. Instead you’ve now got Oprah and Glenn Beck. What the heck?

Bottom line, this program shift is fallout from a much larger corporate battle playing out across the nation. Our media choices in Humboldt are decided by absentee owners of our information infrastructure — cable, telecom, broadcast TV, satellite, etc. Notably, no part of this programming decision was made in Humboldt County.  

In the present skirmish, Viacom executives in New York City decided to hijack a program carriage agreement with Suddenlink counterparts in Saint Louis, Missouri. The result was a last-minute deal collapsing and bitter feelings all around. Viacom launched an advocacy website, www.keepviacom.com, placed full page advertising in the Times-Standard, and continues to air blistering TV ads against Suddenlink. For its part, Suddenlink also launched an online advocacy site, www.suddenlinkonyourside.com, arguing that Viacom was unreasonable and greedy, while firmly closing the door on any prospect of the Viacom channels returning.

Local consumers had no choice in the matter and, as far as we can tell, no local cable subscriber or jurisdiction was consulted in advance.

Viacom is a major content provider, licensing bundles of their video content to cable system operators and other outlets, including satellite and online video providers. Suddenlink is a substantial cable TV operator and Internet service provider — among the top 10 multiple system operators (MSOs) in the US that acts as a distribution conduit, bundling cable TV program offerings with Internet and phone service. But unlike the largest MSOs, Suddenlink does not also own content sources. In the global media distribution market, Suddenlink lives on a fault line between the content haves and have-nots.

Consolidation of media ownership has concentrated control and market power into fewer and fewer hands, making absentee ownership the norm. Mergers and acquisitions continue apace — including local TV stations, cable TV systems and broadband network providers. Two huge deals are in the works and pending regulatory approval right now, for Comcast & Charter to gobble up Time Warner Cable, and for AT&T to consume Direct TV.

A Pew Research Center project reports that “local television, which reaches about nine in 10 U.S. adults, experienced massive change in 2013, change that stayed under the radar of most. Nearly 300 full-power local TV stations changed hands in 2013 at a price of more than $8 billion.”

Following the lead of other content providers like Viacom, local commercial TV stations realized that their broadcast licenses provide a lever for them to require payments from cable and satellite TV systems for carriage.

This profiteering by bundled content providers has been cited as a major problem for folks building next generation broadband networks.

“Video ‘is the single biggest impediment’ to Google Fiber’s deployment,” [the broadband and television provider’s head, Milo] Medin, told an audience at the COMPTEL telecom conference in Dallas [recently]. ‘It is the single biggest piece of our cost structure,'” reported Brian Fung’s blog in the Washington Post .

Another insider blog, Eldo Telecom, reports: “Television programming costs associated with the ‘triple play’ (TV, Internet, voice) offering of legacy telcos and cable companies are the primary business risk facing the subscription-based, closed access, ‘own the customer’ infrastructure business model employed by the legacy telephone and cable companies as well as Google Fiber.”

While policy debates go on and on, program and service bundles are being continuously repackaged to maximize profit for media content and distribution network owners. Did you really want to pay separately for every channel that you receive, every website you visit or every call you make? You may or may not have that option, depending on who can make the most money either offering “a la carte” program services or the bundled programs and services that we’ve seen dominate the MSO marketplace so far.

The bigger story here is the analog to digital evolution across media platforms and resulting radical changes in the media distribution marketplace. For example, Viacom has been pricing itself out of rural cable TV markets and, last month, announced an agreement with Sony for carriage of Viacom channels on a new online video service that Sony is planning to launch soon.

According to the press release announcing the deal, Viacom President and CEO Philippe Dauman said: “Given our young, tech-savvy audiences, our networks are essential for any new distribution platform, and we’re excited to be among the many programmers that will help power Sony’s new service and advance a new era for television.” By implication, the older and less tech-savvy audiences of cable TV are not so essential to Viacom.

This perspective matches some startling announcements in the past week — the HBO network, among the first to launch on cable nationally, will start to make its programming available to non-cable audiences next, and CBS will take its content online with a $5.99/month service that will bypass local broadcast and cable retransmission deals. These movements reflect major tectonic shifts in the media marketplace for consumers.

But you knew that already. Just look at the options you have to access content at home — over the air antenna, satellite services, cable TV, and online via Internet connected computer/tablet/mobile devices, digital video recorders, and online appliances like Roku, Chromecast, AppleTV and others. Smart TVs are available for the dumbest of us viewers and the range of “free” (i.e. advertiser supported) content and paid programming is getting quite diverse with distinctions between the two getting more fuzzy all the time as network owners and content creators add new twists, like “native advertising,” to the old realm of product placement.

If you want your MTV and Daily Show, you’ll need to find another distribution channel. And if you want to have some say in future programming decisions, we’ll need to build locally owned networks and connect ourselves with broadband media access.

—Sean McLaughlin

Sean McLaughlin is an adjunct fellow with New America Foundation’s Open Technology Institute and serves as executive director for Access Humboldt.

This article appears in Scotia.