AT&T's hot rocks
Cabler strikes 10-year music pact with MTV
"Stability over the long haul is the key to this announcement," said Leo Hindery, prexy and CEO of broadband and Internet services for AT&T.
Hindery added that the MTV deal is consistent with the 25-year arrangement AT&T has with the Time Warner/Turner cable networks and its 10-year contract with Walt Disney's ESPN, ESPN2, Disney Channel and other Disney-owned cable channels.
Hindery also revealed that AT&T is about to announce a 10-year deal with CNBC and MSNBC.
In exchange for giving AT&T a 10-year contract instead of the typical five years, MTV Networks received guaranteed commitments from AT&T to launch MTV Networks' new educational kids net Noggin (a joint venture between Nickelodeon and Children's TV Workshop) on its most popular digital tier.
AT&T's Hits digital package of cable networks will also take M2 (MTV's second tier) and Nickelodeon GAS (Games and Sports) on one of its tiers before the year is out.
Leading the field
"AT&T is more aggressive than any other cable operator in leading the way to establish digital distribution in cable," said Nicole Browning, exec VP of affiliate sales and marketing for MTV Networks.
Sources said MTV Networks is also negotiating with AT&T to lock in digital distribution for five other MTV music-network spinoffs. AT&T had previously signed a long-term deal with Nick at Nite spinoff TV Land.
An AT&T spokeswoman said a 10-year deal doesn't guarantee a decade of low costs to the cable system. She cited the clause in the ESPN contract that calls for a 20% increase in yearly subscriber fees paid by the cable operator in the event that the network secured the full cable package of Sunday-night National Football League games.
When the ESPN deal was signed two years ago by Tele-Communications Inc., which was taken over by AT&T earlier this year, the network shared NFL Sunday games with TNT. When the NFL contract came up for renewal early last year, ESPN outbid TNT and bought the whole package for a staggering $4.8 billion over eight years.
