Viacom and DirecTV continue to negotiate but remain far apart

Viacom and DirecTV are still trying to hammer out a new deal that will bring MTV, Comedy Central, Nickelodeon and more than a dozen other channels back to the satellite broadcaster.

But in between the talks, the two sides are still taking shots at each other.

Interviews with the chief negotiators for both parties reveal that there is still a wide gulf dividing the companies.

“Their ratings have dropped on a lot of their major networks. It’s hard to justify significant increases,” said Derek Chang, a DirecTV executive vice president. DirecTV claims that Viacom wants an increase of 30% to carry its channels, which translates into $1 billion.

Viacom’s Denise Denson, executive vice president of content distribution, countered that the media giant’s channels represent 20% of all viewing on DirecTV and yet “we get about 5% of their license fees. That’s the real crux of it.”

DirecTV’s Chang said there is more than money dividing the two companies. He does not like that Viacom puts much of its content on its websites for free.

“It certainly undermines the value of what they are selling to us,” Chang said, adding, that “if people are viewing their stuff online and not on our platforms, why would we pay as much?”

Denson responded that Viacom’s research has not shown that free offerings of its shows online have hurt the ratings for its cable channels.

“We use it as a marketing tool to drive people back to our channels,” Denson responded when asked why the company offers so much content for free online.

As for reaching an agreement, both sides expressed optimism that it will happen but neither would specify when.

“We don’t expect this to last too long,” Chang said. “We’re in open discussions and working hard to try to close a deal,” Denson added.

Chang said DirecTV is willing to put the channels back on while talks continue, but Viacom isn’t interested.

For DirecTV subscribers wondering about getting a rebate or some sort of discount for the days they were deprived of Viacom’s channels, Chang said that would be determined “down the road.”

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