Playing chicken with your viewers
May 1, 2004 12:00 PM, BY PAUL MCGOLDRICK
It was tempting to title this column “I want my MTV” or some variant thereof. But the truth is, I don't want any MTV or MTV2 or even MTV Espanol. I do, however, want to watch what I want, when I want. And, when I don't get those two things, I get mad.
The long-term dispute between Viacom and DISH Network came to a crisis at the beginning of March. Both sides claimed that the other was dealing too hard for what it needed. It seemed that Viacom was pressing to do better financially by re-broadcasting 16 local-market CBS affiliates, and that it wanted to push some rather drab Viacom channels into the limelight.
DISH Network, on the other hand, increasingly has less channel space to offer. And the quality of some of its DTV output is questionable. DISH Network also has an overriding need to be able to pitch itself against DirecTV as the most affordable satellite network.
So, in the first week of March, the worst happened: Viewers were held hostage by both sides in the clash. Viacom channels started scrolling messages across the screen urging DISH viewers to encourage DISH to negotiate. After a while, DISH started to blank out the scrolling as quickly as it could. At the stroke of midnight PST, Monday March 8, the battle became a war. DISH Network pulled the plug on Viacom's Comedy Central, the three brands of MTV, Nickelodeon, Noggin, GAS, VH1, VH1 Classic, BET, CBS HD, and Viacom's 16 local CBS feeds.
The next morning, the vitriol was strong. Charlie Ergen accused Viacom of “holding the public airways hostage.” MTV's president voiced that DISH Network's attempts to “paint itself as the victim” were laughable. I agree. The viewers were the victms. What was DISH Network thinking?
Then Viacom rammed the point home in a public statement, saying Dish “refused to entertain a reasonable proposal or to negotiate in earnest.” The company added the ultimate in insults with, “Fortunately consumers have a choice … [they] can easily switch to one of these reputable operators. We urge them to do so.” The statement is ugly, implying that Viacom did not recognize DISH as reputable. But it also showed that it understood that the important thing was content. Ever heard that here before?
DISH Network was clearly on the weaker side of this argument because it was denying content to its customers — customers to whom it had agreed to deliver that content. On that March 9 morning, DISH's phone lines were totally overwhelmed. I don't know how many other DISH customers considered a switch, but I certainly did. I looked again at the more expensive DirecTV, which still emphasizes sports too much for my family's tastes, and I took a really close look at VOOM. VOOM offers over 30 channels, with HDTV content and a bunch of cable channels. But it's not cheap to get in. There are no special deals on equipment, and the monthly cost isn't cheap either. But there are epiphanic moments in life when you say to yourself, “Now is the time …”
So I almost signed up for VOOM and almost bought an expensive HD-ready monitor. But one small matter stood in my way: VOOM does not carry BBCAmerica. That is a total deal-breaker for my family.
Luckily, the war ended on the morning of March 11. When they struck the deal, both sides were the epitome of sweetness with one another, with DISH saying, “We understand this has been a difficult few days for our customers, and we thank them all for the encouragement they have given us throughout.” I don't know where they imagine that encouragement came from but, hey, I guess they had to say it. Viacom's president and CCO Mel Karmazin came over all nice about DISH after apologizing for the disruption.
The effect of the multi-year agreement is that DISH restored the cut channels, added three more Viacom channels (SpikeTV, CMT and TV Land) and will add a fourth one, Nicktoons, when it is finally invented. No one talked about how much this cost DISH Network.
Lessons? Don't hang out your dirty laundry. And don't play with consumers' content; they will revolt. My days as a subscriber with DISH Network are numbered. When VOOM adds BBCAmerica, I'm off.
Paul McGoldrick is an industry consultant based on the West Coast.
Send questions and comments to: paul_mcgoldrick@primediabusiness.com
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