Collateral damage in the TV warsJuly 12, 2012: 1:31 PM ET
A quickly escalating spat between Viacom and DirectTV is hurting customers.
FORTUNE -- Viacom (VIA) has yanked streams of The Daily Show, The Colbert Report, Spongebob Squarepants and other shows from its Web sites as an apparent tactic in its carriage dispute with DirectTV (DTV). Viacom thereby has turned its own viewers -- all of them, not just DirectTV subscribers -- into collateral damage.
But there's a big problem with this tactic: the streams are available elsewhere. Hulu, iTunes (AAPL), and Amazon (AMZN) all offer many of the shows on their paid services. On Hulu, the most recent episodes of The Daily Show and The Colbert Report, for example, are available to anyone at no cost.
TV networks that make their shows available on various platforms will increasingly face this conundrum when they become involved in carriage disputes with a cable or satellite provider -- pulling their programming from that provider is less of a stick than it used to be. Not only does this tactic make Viacom look vindictive, it works in effect as a giant advertisement for cord-cutting. More people will now be made aware that many of their favorite programs are available online.
Of course, that hurts DirecTV as well. Viacom's move was an apparent response to the satellite provider's earlier message on its Web site advising viewers to watch shows on Viacom's Web sites. Reportedly, after Viacom stopped streaming its shows, DirecTV's page still told viewers they could watch on Hulu, Amazon, and iTunes. But as of this writing, although that page promises to tell viewers about how to "find your favorite Viacom programming online," no such information appears -- only a message that DirecTV was making several channels of the Encore movie network for free to all its viewers until the dispute is over. Perhaps it dawned on someone at DirecTV that shipping viewers off to the Internet wasn't the wisest move.
DirecTV says Viacom, which provides the most shows to the satellite service, is demanding a 30 percent price hike. Viacom says its demands amount to only "pennies per day per subscriber" and that, given DirecTV's huge profits, there's no need to pass the price hike along to subscribers, as DirecTV has complained it would be forced to do.
On Tuesday night, Viacom stopped beaming its programming to DirecTV, leaving subscribers without access to the following networks: Nickelodeon, Comedy Central, MTV, BET, VH1, CMT, Logo, Spike, TV Land, MTV2, VH1 Classic, Palladia, Nick Jr., NickToons, TeenNick, Nickelodeon West, Tr3s, Centric, MTV India, Nickelodeon HD, Comedy Central HD, MTV HD, BET HD, VH1 HD, CMT HD and Spike HD.