Rock News: US Government vs. MTV
Now that the U.S. Justice Department has scored
an antitrust victory over Microsoft they are looking at Viacom's MTV Networks.
MTV Networks runs cable channels MTV, VH1,
Nickelodeon and M2. The Government alleges that MTV has possibly violated
antitrust laws with their dealings with Record Companies according to a
report in the Wall Street Journal.
The Justice department is investigating
various MTV tactics and practices which could leave competitors out in
the dark. The probe was launched after Viacom acquired The Box, a fledgling
music video cable station earlier this year, also the fact that Viacom
proposed a buyout of CBS. With control of the CBS network television
station and it's holdings it is believed that Viacom could virtually control
music television and have a strong foothold in radio as well. CBS owns
Country Music TV and the second largest radio broadcasting company in the
U.S., Infinity Broadcasting. Among the allegations, the Justice department
is looking into claims that MTV demands exclusive rights to airing music
videos. Additionally, they are looking at the cable music giants licensing
terms for digital video distribution on their web site. With the web gaining
momentum, some believe that MTV will use it's clout to dominate online
videos in addition to their cable empire.
BET and Canadian Much Music are MTV's only
real competitors, new music video channels are difficult to launch when
you do not have access to hit artists' video catalogs. The real danger
of MTV however is that in addition to being able to make stars out of unknown
artist, they can hamper an artist success by not playing their videos.
Music executives have complained about
MTV tactics. Because of lack of competition, MTV Networks pays one lump
licensing fee to record companies to air their artist videos on all of
MTV channels. Translated, this means because there is no real competitor
for these licenses, MTV is able to gain access to these videos at what
record companies consider an under priced fee.
MTV commands an audience of 72.6 million
homes while VH1 is seen in 68.8 million homes. That places the MTV networks
at the forefront of Cable Television viewership. It is this dominance of
the cable television market that makes MTV an easy target for antitrust
A Viacom spokesperson stated that they
intend to fully cooperate with the government investigation.
Stay tuned more to come on this story.