ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, July 23, 2012

DirecTV and Viacom Settle After Jon Stewart Makes Fun of Them

Jon StewartAs reported in the New York Times, DirecTV and Viacom ended their nine-day blackout of cable channels after Jon Stewart, whose Daily Show is broadcast on Comedy Central, one of the channels at issue, asked rhetorically, "Viacom, what are you China?"  The remark related to Viacom's attempt to prevent viewers from watching its programming commercial free on the Internet.  As Stewart noted, young people know all sorts of ways to watch pirated programming commercial free on the Internet.  Stewart informed his corporate overlords, "[Y]ou're only blocking the old people from watching the show."

The dispute between the DirectTV and Viacom started out as the usual squabbling between service providers and programming providers over how much consumers should be charged for a bundle of two channels that they watch and seven that they don't.  And as often happens in such cases, in order to increase pressure on DirecTV, Viacom blocked DirecTV from airing its programming, leaving viewers unable to quench their insatiable desire to know, inter alia, who had hooked up with whom in Jersey Shore and why anybody would watch any show on Comedy Central other than The Daily Show and The Colbert Report.  

But DirecTV upped the ante by encouraging viewers who could not watch Viacom programing via satellite to just watch episodes on Internet sites such as Hulu.    Now order has been restored, as the two parties have worked out a deal that will provie free Internet access to Viacom-owned shows but only for DirecTV subscribers.  Ultimately though, it seems that time is running out for the conventional models on which companies like Viacom and DirecTV rely.  Viewers increasingly find their content on the Internet, and the companies can only keep their fingers in the dam for so long.


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