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Viacom and DirecTV settle contract dispute

In our last post we discussed the ongoing dispute between media giant Viacom and satellite television company DirecTV. A dispute over pricing for a contract renewal resulted in a temporary service outage for millions of customers.

The two companies finally came to an agreement late last week, ending the service blackout and very likely pleasing audiences nationwide. The outage lasted for nine days and affected popular channels like Comedy Central and Nickelodeon. One of the major issues in determining acceptable fee increases was the availability of Viacom-owned shows through online streaming services.

Such services are popular among customers but difficult to effectively monetize. Other distribution services have launched dedicated sites catering to paying subscribers, which it seems Viacom and DirecTV will also do as a part of the new deal, but it will be limited. A spokesperson for DirecTV said that Viacom has agreed to maintain the same level of free programing online that is has now. Experts say that this same issue is likely to come up in negotiations between DirecTV and other media companies later this year.

Limited access to free streaming content is a popular solution among the companies that own the content, but is unpopular among customers. The ongoing restrictions on Viacom-owned shows may continue to hurt the company in addition to customer dissatisfaction over the service blackout.

As we said in our last post, these types of public disputes can have some major drawbacks for companies, so it's important to carefully analyze the ramifications before negotiations begin. Experienced business law attorneys can help Fairfax companies figure out the best approach for their specific situation.

To learn more about contract disputes and how one can affect a Virginia business, take a look at our law firm site.

Source: The New York Times, "DirecTV and Viacom Settle Dispute Over Fees, Restoring Service" Brian Stelter, July 20, 2012

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