Viacom Pulls its Content from Online Sources

Perhaps it has occurred before, but some of us cannot remember a programmer yanking its content from online sources, depriving all potential users of access, in order to put more pressure on one distributor.

But that is what Viacom has done, removing full episodes of shows like "SpongeBob Squarepants,"  "iCarly," "Jersey Shore" and "The Daily Show" from online sites. DirecTV had been telling its customers how to watch online.

Viacom obviously is hoping that move will prevent DirecTV customers from watching some of their favorite shows online, while the dispute remains unresolved.

There are potentially significant ramifications for DirecTV, Viacom, other distributors and programmers, not to mention potential online alternatives.

Consider the oddity of a video services provider telling its customers where they can watch the same programming they pay for on online sites, for no additional charge. Strategically, that is the disruption many fear, and many expect, at some future date, in any case.

Other distributors, of course, face the same programming cost pressures as DirecTV, though they doubtless would not mind gaining defecting DirecTV customers, should the blackout become permanent, something virtually nobody expects.

All other programmers, especially those with less market power than Viacom, have to worry that a DirecTV "victory" would put more pressure on the programming networks to control their own costs, so the upward cost pressures for distributors can be braked.

You might say it is equally odd for a programming network to "want" to control its own costs, to stave off asking distributors for contract rate increases. But all programming networks are starting to face a business climate where the health of the entire industry is becoming a real question.