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Viacom may pull channels from Shentel if contract not reached

Posted 25 March 2014 12:00 AM by Shentel

Shentel customers may lose cable channels on April 1

If contract agreement is not reached by March 31, Viacom (owner of MTV Networks) could pull 18 channels. 

Edinburg, VA – March 25, 2014 – Shenandoah Telecommunications Company (Shentel) (NASDAQ: SHEN) is in negotiations with Viacom, owner of MTV Networks, to continue offering their channels, but the current proposal from Viacom will have costly repercussions for Shentel customers.  In addition to significant rate increases, Viacom is effectively requiring Shentel to carry 18 channels, without any option to only carry channels that Shentel customers actually watch.  (The channels that Shentel is required to carry are listed below.*)

Shentel pays programmers such as Viacom a fee per channel per month per customer for their programming.  While Shentel is restricted from talking about contract information, it can report that Viacom has demanded a rate increase that’s 40 times the rate of inflation.**  It is possible that Viacom may require Shentel to drop their networks if Shentel does not agree to their proposed rate increase by March 31.   

“When a multibillion dollar company such as Viacom demands an unprecedented increase in its monthly fees, we believe it’s our responsibility to take a stand.  Especially, when research from Nielson, shows that viewership for these channels has decreased.  Shentel has requested that the stations remain on-air while negotiations continue.  Unfortunately for our customers, Viacom has not agreed to that request at this time,” said Chris Kyle, Shentel VP of Industry Relations and Regulatory.  

“Viacom owns networks such as MTV, Nickelodeon and Comedy Central.  But in order to offer these, Viacom requires Shentel to carry, and pay for, networks that are not as well-known, and not widely viewed, such as  MTV2, MTV Hits and VH1 Classic,” said Kyle. “We want our customers to know that fees from cable networks account for the majority of their monthly cable bills. Today's entertainment marketplace is changing rapidly, and we have seen consolidation among major media companies. These mergers give large programming companies significant leverage over independent cable companies such as Shentel.”

Customers can go to a new web site, TVOnMySide.com (www.TVOnMySide.com) to educate themselves concerning rising programming costs.  “The best solution to this problem is to educate customers,” said Kyle.

Shentel is trying hard to protect customers from significant programming fee increases. “These large increases impact all of us and we want to make sure our customers know we are working on their behalf,” Kyle added.

*  Required Viacom channels include: MTV, Nickelodeon, VH1, TV Land, CMT, BET, Spike, Comedy Central, MTVJams, MTVHits, MTV2, Tr3s, CMT Pure Country, VH1 Soul, VH1 Classic, Nick Jr, Teennick, and Nicktoons.  The HD channels include CMT HD, MTV HD, Nickelodeon HD, VH1 HD, Comedy HD, Spike HD.

** Source: 12-month period from January 2013 to January 2014, Bureau of Labor Statistics, released February 20, 2014.

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