Viacom Channels Blacked Out for 20 Million DirecTV Customers

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Erin Kim

NEW YORK (CNNMoney) — Millions of kids at home for summer vacation will have to forgo their daily dose of “SpongeBob SquarePants.”

DirecTV customers lost access to 19 channels owned by Viacom, including Nickelodeon, MTV and Comedy Central, at around midnight Tuesday, after the two companies failed to settle disputes over programming fees.

The two companies could not reach an agreement on subscriber fees before their seven-year deal expired.

Viacom is seeking a 30% increase, or $1 billion more than its previous deal, DirecTV said in a statement. Viacom countered that its proposed increase totals “a couple of pennies per day per subscriber.”

Disputes between media companies and cable or satellite TV providers have become increasingly common, but this one is hitting an especially wide audience. With 20 million subscribers, DirecTV is the country’s second-largest television service provider, behind only Comcast. In addition to SpongeBob, Viacom owns the rights to many other popular shows, including “The Daily Show” and “Jersey Shore.”

DirecTV notes that Viacom is asking for a large increase at a time when its ratings are sinking.

“We have absolutely no problem compensating Viacom fairly,” Derek Chang, DirecTV executive vice president of content, said in a written statement. “[But] the ratings for many of their main networks have plummeted and much of Viacom’s programming can be seen for free online.”

Viacom maintains that the increase brings DirecTV’s rates up to today’s market prices, following the expiration of its long-term contract.

“We proposed a fair deal,” the company said in a statement. “However, DirecTV refused to engage in meaningful conversation.”

Both sides have taken the fight public, launching websites like and and publishing full-page newspaper ads with Stephen Colbert and John Stewart standing below the all-caps banner: “What’ll they take next…freedom?”

This clash is one of several recent battles between pay-TV distributors and programming suppliers.

Earlier this month, Dish Network dropped AMC Networks, which reaches about 14 million homes. The standoff remains unresolved.

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