Web Video Inflames Fight Over TV Fees

The disappearance of Nickelodeon, MTV and Comedy Central from the TV sets of 20 million American homes marked a line in the sand drawn by one of the biggest pay-TV distributors in a dispute over programming fees with a major entertainment company.

What might once have been a run-of-the-mill spat has taken on heightened importance because it occurs at a pivotal time in the TV industry. Low-price or free online video outlets like Netflix, Amazon, and YouTube are emerging as serious competitors to traditional cable-TV services, putting the spotlight on the relatively pricey nature of cable TV. That issue is particularly acute in this dispute, where Viacom is seeking an increase in the fees it is paid by DirecTV to carry its channels. Viacom licenses many of its shows to outlets like Netflix and Amazon, prompting industry executives to worry about cannibalizing traditional TV. Several top Viacom channels, particularly Nickelodeon, have recently seen ratings declines. Viacom executives have previously said online availability of content has minimal impact on traditional ratings. "There are probably more people exposed to our programming than ever before, but the ratings industry has not kept up" in measuring online viewing, said a Viacom spokesman.