Viacom Warns DirecTV Customers They Could Lose MTV, Comedy Central
Viacom (VIAB) - Get Viacom Inc. Class B Report warned DirecTV customers they may soon stop seeing its channels due to a distribution deal impasse to continue services with DirecTV parent AT&T (T) - Get AT&T Inc. Report .
Nickelodeon, BET, MTV, Comedy Central and Paramount are some media properties in Viacom's channel lineup.
AT&T has grown in size considerably after acquiring Time Warner, and now owns HBO and Warner Bros Hollywood studios. Viacom is accusing AT&T of abusing its power to muscle out of fair terms.
"Unfortunately, AT&T is abusing its new market position by favoring its own content - which significantly underperforms Viacom's - to stifle competition," Viacom said in a statement. "AT&T-DirecTV's behavior is also consistent with a recent pattern of gouging their customers by charging them higher prices for an inferior product with fewer channels."
Viacom also said it's "especially troubling" that "AT&T is marginalizing diverse audiences in its new DTV packages and threatening to do the same with their existing products."
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Reuters reported that AT&T is insisting on terms that would benefit its advanced advertising business at the expense of competitors.
Viacom said it has already reached deals with other business relationships like Altice USA (ATUS) - Get Altice USA Inc. Class A Report , Charter Communications (CHTR) - Get Charter Communications Inc. Report and Comcast (CMCSA) - Get Comcast Corporation Class A Common Stock Report and hasn't had a disruption in service since 2014.
AT&T's DirecTV has 24 million subscribers who could no longer watch Viacom channels if a deal isn't reached by midnight March 22.
Viacom's class B shares declined 4.2% to $26.31 on Wednesday. AT&T slipped 0.5%.
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