Viacom Channels May Go Dark In Time Warner License Dispute

Channels include Nickelodeon, MTV, Comedy Central and VH1

Time Warner Cable subscribers that are fans of Spongebob Squarepants, The Colbert Report or The Hills may have to ring in the new year without their favorite programs. Viacom channels, including Nickelodeon, MTV, Comedy Central, VH1 and 15 other networks appear set to go dark on Time Warner Cable systems at midnight Wednesday. Viacom is preparing to pull the channels as part of a license agreement renewal dispute between the two companies.

Viacom asked Time Warner Cable for an increase of just under 25 cents per subscriber per month for carrying its 19 channels. The company justified the increase by saying its channels have been undervalued by Time Warner Cable.

"Americans spend more than 20% of their TV viewing time watching our networks, yet our fees amount to less than 2.5% of what Time Warner generates from their average customer," said a Viacom statement.

While the percentage increase per channel Viacom is seeking was not provided, someone close to the matter pegged it in the low double digits.

"Viacom is looking to make up for sagging ratings and declining ad revenue on the backs of Time Warner Cable Customers," said a Time Warner Cable spokesperson. "The increase they asked for was egregious; we have to fight for our customers."

In what is becoming a larger source of contention between MSOs and cable networks, Time Warner Cable cited the ubiquity of Viacom shows online as a reason for not valuing the networks as highly. Shows such as The Hills and The Daily Show with Jon Stewart are available in full for free online.

"Given our audiences, digital is a great compliment to the linear, but in no way is it a replacement," said an MTV Networks spokesperson. "In fact, we've seen linear ratings increase across our networks as online usage has increased. We understand this is a sensitive issue for our affiliates and we have been exploring authentication technology to further reinforce our commitment to partnership."

While the number of affected customers was not available at press time, the dispute will affect all of Time Warner Cable's top markets, including New York City, Los Angeles, Dallas-Fort Worth, Tampa-St. Petersburg/Sarasota (Brighthouse), Cleveland, Cincinnati and others.

Time Warner Cable is the second largest cable operator in the U.S., with nearly 13.3 million basic cable subscribers as of September.

Viacom is launching an advertising campaign asking Time Warner Cable customers to call the MSO and ask that they make a deal.