As per an agreement made between Dish network corp. and Viacom Inc, they have decided to keep Dish Network Channels like Comedy Central, Nickelodeon and MTV on the satellite TV service. It would be made available on Dish’s online Sling TV service.
Otherwise what would have been termed out as a black out to its 14 million customers, the deal was made on new payment terms. According to a statement made by both the companies the agreement would cover all 18 Viacom channels which include Spike, BET, TV Land, CMT, Nick Jr and VH1. The networks of Viacom will also be broadcasted on Dish’s Sling TV streaming Services.
In their biggest increase since October 2008, Viacom shares gained as much as 13 percent to $42.08 in New York. Dish Network’s shares also rose by 9.2 percent to $48.31 in Colorado and Englewood.
“The deal certainly takes away the most major bear case on this name,” Stifel Nicolaus & Co. analyst Benjamin Mogil said in a research note. He has a buy rating on the stock.
Disputes have deepened between media companies and pay-TV providers over subscriber fees in the last couple of years. For years Dish TV has been battling rising content costs which in turn have lead to higher customer bills. This has made people go for cheaper alternatives such Amazon or Netflix.
New York based Viacom claims that their shows account for about 20 percent of viewership on Dish and that satellite service would lose more customers if they find the programs on other cheaper mediums.
Neither side can afford not to do a deal,” said Doug Creutz, an analyst at Cowen & Co., who has a market perform rating on the stock, the equivalent of a hold. “Viacom’s argument for why you can drop its channels is that, in aggregate, they deliver a lot of viewers. That works reasonably well.”