Viacom CEO Bob Bakish has accused Charter Communications of attempting to stifle the development of low-cost virtual MVPD services.
“Among the issues we face is Charter’s attempt to inhibit the creation of smaller, more innovative and less expensive packages of the networks customers want, by penalizing Viacom if it participates in new skinny bundles or OTT streaming platforms,” Bakish said in a note to employees, intercepted and excerpted by Bloomberg.
The Bloomberg report came a day after Viacom went public with a simmering licensing renewal impasse with the No. 2 U.S. cable company. Viacom, which owns MTV, BET, Comedy Central and Nickelodeon, among other networks, has begun informing its Charter-subscribing viewers that its channels won’t be available after Sunday if a renewal agreement with their cable operator isn’t reached.
Charter hasn’t commented on this matter.
For their part, Charter’s top executives have remained skeptical regarding the profitability of vMVPD services. Their skepticism extends to Viacom. In May, Charter pulled Viacom’s channels out of its lowest-cost programming tier—an action Bakish described as a breach of contract.
The impasse with Charter comes at an unfortunate time for Viacom, which had been set to report its first annual sales growth since its ratings fortunes took a dramatic downward turn in 2011. Rosenblatt Securities analyst Alan Gould told Bloomberg that up to $600 million of Viacom’s $13 billion in annual sales come from Charter, which controls around 16.5 million pay-TV customers.
“This is huge. They could lose a decent chunk of their revenue,” he said.