Time Warner vs. Viacom: Who's the Winner?

What a way to ring in the New Year! Two media giants, Viacom (VIA Quote) and Time Warner Cable (TWC Quote), spent the run-up to Dec. 31, 2008, locked in battle, posturing to see who could come off as tougher. On New Year's Eve, top execs missed the ball drop in Times Square: they were too busy negotiating a last-minute truce.

But did either side win? Was all the maneuvering worth it?

The world of business can occasionally feel like a gladiatorial arena. But public shows of strength don't always scare off your opponents -- or impress your customers. The trick is knowing when to stand up to a tough competitor or supplier, and when to avoid the blame game, put your head down, and get back to work.

As with just about every business story these days, the current brouhaha can be traced back to the troubled economy. Viacom -- which owns well-known cable networks such as MTV and Comedy Central -- has seen ad revenue drop over the past year. What's an easy way for the company to bring in more money? Demand Time Warner Cable to shell out more per customer to carry those channels.

That in itself is no surprise. Content providers want to be paid as much as they can for their programming. Just as content distributors -- like cable companies -- want to get that programming as cheaply as they can.

But this particular negotiation took an ugly turn. Time Warner decided to play hardball, refusing Viacom's higher per-customer charges. Giving in to Viacom, it seemed, might encourage other content providers to push for similar rate hikes.