**UPDATE: Dec. 31, 10 p.m.: Blackout averted. Time Warner Cable and Viacom reach deal
**UPDATE, Dec. 31, 6 p.m.** Still no resolution. A look at the math behind the Viacom/Time Warner dispute: “If MTV goes dark at midnight, will Viacom offer $819,178 refund?”
**UPDATE, Dec. 31, 11:21 a.m.** Time Warner just issued a new statement calling Viacom’s tactics extortion. Looks like the two companies aren’t anywhere close to resolving this issue and anyone watching tonight’s Miley Cyrus’ New Year’s Eve special on MTV will see a dark screen after midnight. Read the full memo from the cable company’s CEO.
**UPDATE, Dec. 31, 10:32 a.m.** Bloomberg News is reporting that Viacom rejected Time Warner Cable’s request to extend discussions after January 1. Story also mentions that in total, Viacom is asking for a 15 percent increase in fees.
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Cable TV ain’t cheap. And if the owner of Comedy Central, MTV and 17 other channels doesn’t get more, it will stop broadcasting those channels to Time Warner Cable customers on January 1. If the two companies don’t resolve the issue, their viewers will ring in the new year staring at a blank screen.
Viacom Inc. is asking for 25 cents more per month per Time Warner subscriber, which the company says is less than one penny a day per subscriber (the Associated Press reports the per-subscriber fees come out to 23 cents more a month). If an agreement on what is known as “carriage fees” is not made by midnight Wednesday, Viacom will pull those channels.
Do we really want our MTV?
”I really hope they don’t pull them but what they are asking for is outrageous,” Fred Stefany, Time Warner Cable’s president of Los Angeles South and Orange County, said in an e-mail to me Wednesday morning.
In a statement late Tuesday, Viacom socks it to Time Warner in an attempt to win consumer sympathy. It mentions the upcoming cable TV price hike that Time Warner customers in Orange County will feel in 2009.
“Time Warner Cable subscribers who are being handed a January 1st $3 monthly increase in Raleigh, Orange County, Los Angeles, and New York City are simultaneously facing the removal of beloved shows across 19 channels.”
Viacom, which started to appeal to viewers and fans online and on TV Tuesday night, goes on to say that Time Warner “has so greatly undervalued our channels for so long” and that the increased fees are “reasonable and modest relative to the profits TWC enjoys from our networks.”

(For the first nine months this year, Time Warner reported a 3 percent increase in video subscriber revenuesto $7.9 billion, compared to same period last year. Viacom, meanwhile, reported $6.3 billion in revenues from its ‘media networks,’ which was an 11percent increase from the prior year. Viacom’s media networks include cable channels and the ‘Rock Band’ game franchise, but not its films. )
Update 12/31: In a statement just before noon on Wednesday, Time Warner Cable CEO Glenn Britt called Viacom’s tactics extortion and rejected the notion that this is just a few pennies per customer. In a lengthy retort, Britt says Viacom wants an extra $39 million a year, which is on top of the “hundreds of millions of dollars our customers already pay to Viacom each year. That doesn’t sound like pennies to us,” Britt said. Read the rest of this entry »