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Viacom, Charter reach agreement in principle, avoiding blackout

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Viacom, Charter reach agreement in principle, avoiding blackout

Two days after they agreed to an extension to continue negotiating, Viacom Inc. and Charter Communications Inc. on Oct. 17 reached an agreement in principle on a new carriage pact.

The pact, which is still being finalized, averts a potential blackout and keeps the programmer’s networks on systems owned by Charter, the nation’s No. 2 cable operator with some 16.6 million video subscribers.

"Viacom and Charter have reached an agreement in principle," the companies said in a joint statement. "Spectrum subscribers will continue to have access to Viacom’s networks, without disruption, while we finalize terms."?

Viacom and Charter faced an Oct. 15 expiration of their carriage pact that covered 23 networks, including MTV (US), Comedy Central (US) and BET (US). Late on Oct. 15, it was announced that the companies had reached an extension and would continue to negotiate.

Still unclear is whether the parties have resolved issues surrounding tiering — Charter in May moved Viacom services to a higher-priced package for new customers.

Moreover, Viacom President and CEO Bob Bakish, who is trying to lead a turnaround for the company with a strategy that dedicates resources to and places emphasis on six flagship networks, recently wrote in a memo to employees that one of the sticking points with Charter concerned the creation of smaller, less expensive packages. Bakish said that Charter would penalize Viacom if it participated in new skinny bundles or over-the-top streaming platforms.

To date, the programmer also has not been included in the skinny bundle Spectrum Stream TV, a low-priced, Internet Protocol TV service Charter has been offering to its high-speed subscribers within its footprint.

News of the Viacom-Charter agreement in principle follows a similar pattern that ultimately yielded a new carriage deal between Walt Disney Co. and Altice USA Inc., for the cable operator's Optimum systems in the New York DMA. The parties had faced a Sept. 30 contract expiration, which was extended to Oct. 1. That afternoon, the companies reached an agreement in principle in their dispute, which averted any disruption in service, and resulted in a new carriage contract a few days later.

Currently, Univision Communications Inc. and Verizon Communications Inc.'s Fios TV are engaged in their own carriage contretemps, with the impasse resulting in a blackout.

Per usual, pricing is at the heart of the differences, with Verizon, which counts almost 5 million video customers, asserting that Univision is seeking an increase for access to its programming that is more than double its most recent rate.

With the disconnect, Fios TV subscribers have lost access to Univision (US) and UniMás (US) stations, as well as cable networks Galavision (US) and Univision Deportes (US). In addition, they have been blacked out from the Spanish-language media leader's network roster that also includes El Rey Network (US), Bandamax (US) and Univision tlnovelas (US).