Contract dispute could black out popular channels for Hargray subscribers

dburley@islandpacket.comMarch 21, 2014 

Hargray Communications cable subscribers could lose popular Viacom channels, including MTV, BET and Comedy Central, if a contract dispute with the programmer isn't resolved by the end of the month.

The Hilton Head Island-based cable-television provider's contract with Viacom ends March 31, and the mass media company wants more money, according to a letter Hargray mailed to its customers, some of whom received them Friday.

"This is so egregious that we as a company can't accept the rate they are offering," Hargray vice president of sales and marketing Gerrit Albert said.

Attempts Friday to reach a Viacom representative were unsuccessful. The company also provides channels such as Spike TV, VH1, TV Land and Nickelodeon.

Hargray pays programmers such as Viacom a monthly per-channel fee. As contracts near expiration, new agreements are negotiated.

Albert said Viacom wants an increase 40 times the rate of inflation and much higher than the usual 8 to 10 percent increase most programmers are requiring. He declined to disclose Viacom's price.

Earlier this month, Albert said those increases were the primary reason Hargray raised its cable rates.

Starting April 1 -- the same day customers could potentially lose Viacom channels -- customers' monthly bills will jump by an average of $5. Coupled with a new $2 Internet charge, a customer with a cable TV-Internet bundle will pay $7 more a month, or $84 more per year.

However, fees for the firm's 30,000 cable customers could decline if Hargray loses Viacom, Albert said.

"We're contemplating, in the event of a loss in coverage, a number of things, one of which would be reduction to the price customers pay," he said.

Hargray is one of about 750 small- to medium-sized cable companies that make up the National Cable Television Cooperative, a negotiating agent sparring with Viacom on behalf of the companies.

The spat is similar to Time Warner Cable's dispute with CBS last year that cost Time Warner 300,000 customers.

Albert said battles between cable providers and programmers are the new norm for the telecommunications business. And often, it's the customers who pay.

"I think the whole content model is broken," he has said.

Follow reporter Dan Burley on Twitter at twitter.com/IPBG_Dan.

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