Spencer Municipal Utilities in Negotiations with Viacom

03/28/2014 1:25 PM

        Spencer Municipal Utilities (SMU) and many other companies representing 5,000,000 subscribers is in negotiations with Viacom, owner of MTV Networks, to continue offering their channels, but believes the current proposal from Viacom would have costly repercussions for the company’s customers. While we are restricted from talking about specific rates, Viacom demanded a rate increase that’s 40 times the rate of inflation*. Imagine pulling up to the gas pump and finding that gas has gone from $3.50 a gallon to $6.00 – overnight. That’s the scale of some of these large increases.  In addition, Viacom may demand we drop their networks if we don’t agree to their proposal.

         “At SMU we have a new web site, TVOnMySide.com to educate our customers on rising programming costs. Across the country, networks are substantially increasing their fees to cable companies, which affect customers directly.

         “Viacom owns popular networks such as MTV, Nickelodeon and Comedy Central.  But in order to offer these, the cable networks require us to carry networks that are not as well-known, networks such as  MTV2, MTV Hits, CMT, CMT Pure Country, Nick Jr., Nicktoons, Spike, Teen Nick, TR3s, TV Land, VH1, VH1 Soul and VH1 Classic” explained General Manager Steve Pick.

         We want our customers to know that fees from these networks account for the bulk of monthly cable bills.  Today's entertainment marketplace is changing rapidly, and we have seen consolidation among major media companies.  These mergers allow large programming companies significant leverage over independent cable companies such as SMU.

         Our goal is to protect our customers from significant programming fee increases.   We pay programmers such as Viacom a fee per channel per month per customer for their programming.  When these contracts conclude, we negotiate new agreements and that concludes that business deal.  But 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.

         These large increases impact all of us throughout Spencer and we want to make sure our customers know we are working on their behalf.

         We urge our customers to get the facts and be informed by visiting TVOnMySide.com.

         Spencer Municipal Utilities is a leading provider of cable, internet, telephone and i Wireless cellular service in the Spencer community and has been providing water since 1886 and electric services since 1901.

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

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