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Pay TV’s big breakup, Day 40: Dish says it’s fine, but AMC admits it’s hurting

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Charlie Ergen and his Dish Network (s dish) spent their Wednesday earnings call explaining to investors why they don’t need AMC Networks (s amcx) channels.

But a day later, during its own second quarter Come to Wall Street address, AMC Networks struck a contrarian tone: Not being in Dish’s 14 million homes since July 1 didn’t affect Q2 earnings, but Q3 will be a very different matter.

“Although Dish Network’s termination has reduced the company’s total subscribers by approximately 13 percent, the impact on our (cash flow) and operating income, if it continues, will be materially higher,” the company said in its Thursday earnings release.

Also read: Day 27 of the Dish vs. AMC standoff – where’s the subscriber revolt?

As for AMC’s second quarter performance, it wasn’t too shabby, with the company reporting a 53 percent spike in profit to $41.5 million on a 12.2 percent increase in revenue to $327.6 million.

Key revenue drivers remain ad sales and purchases of AMC’s critically lauded series, including Mad Men, Breaking Bad and Walking Dead on disc, download and streaming.

Relative to other cable conglomerates, AMC Networks gets a smaller portion of its revenue from pay TV affiliate fees — an amount that totals only around $418 million a year, according to a memo put out last week by Lazar Capital analyst Barton Crockett.

Also read: Why Breaking Bad didn’t scare Dish, but Walking Dead will

With shows like Walking Dead becoming mainstream audience hits — the zombie series’ second-season premiere scored the biggest audience ever for a basic cable series last October — AMC is  trying to significantly increase its carriage fees in renewal talks.

But the conglomerate, spun off from Cablevision last year, claims it never even got to plead its case with Dish before the satellite carrier pulled its AMC flagship channel, along with the smaller IFC and WE TV, off its service on June 30.

AMC still insists that Dish is trying to drum up leverage for a separate legal matter — Cablevision and AMC are suing Dish for $2.5 billion for dropping the now-defunct Voom HD channels in 2008. Dish was ruled to have destroyed evidence in the case, which goes to trial in September.

Also read: AMC – “Dish never even talked rates with us”

If this is indeed factoring into settlement negotiations, Dish is doing little to reveal any progress made.

On Wednesday, Dish co-founder and chairman Ergen ramped up the rhetoric as only he can. Turns out the Englewood, Co.-situated Ergen family isn’t a fan of AMC series, even though they’ll collectively be up for 34 Emmys next month.

“I’ve had satellite television for as long as satellite television has been around, and there’s never been one minute that I know of anybody in my family, or anybody who’s came to my house, has ever watched one second of any of those channels,” Ergen told investors Wednesday.

“They’re critically acclaimed but not viewed as much by our audience,” he added. “And our customers can go to iTunes and get ‘Mad Men’ the same time it’s on.”

Ergen also claimed that Dish could pay the entire bill for his subscribers’ purchases of AMC series on iTunes and still come out ahead of paying AMC’s increased licensing fee.

Of course, it’s still early August. Ergen’s position could change on or before Sept. 18, when the Voom HD trial begins; or on or around Sept. 23, if Mad Men and Breaking Bad clean up at the Emmys; or on Oct. 15, when Nielsen’s Fast National ratings appear for the third-season Walking Dead premiere the night earlier.

Then there’s Dish’s own Q3 earnings. In an SEC filing made several weeks ago, Dish revealed that it only lost 10,000 subscribers in the second quarter, beating analysts forecast. It will no doubt be interesting to see what the company’s subscriber churn is during the current quarter with AMC not around.

10 Responses to “Pay TV’s big breakup, Day 40: Dish says it’s fine, but AMC admits it’s hurting”

  1. Janet Henry Hughes

    amc was my favorite the grandkids watch it all the time halloween is all month on amc fo the kids dish stinke if we had the option to pay higher to have amc thats ou choice all i care about is amc a&e 23 and egular stations for our area, so if they cared about prce range they would let us pick ou own and also everyone got to watch ou football but dish cable n direct tv had it dish sucks bad

  2. I did ask why I am still paying the same price even though I no longer have the channels. I received an email that quite frankly was a middle finger. It was somewhat rude and told me I was receiving three other movie channels with no commercials. If you onsider Caddyshack and Spongebob Squarepants movies great then it would benefit you but I am not interested. Dish thinks nobody will switch . Now they are dumping the Big 10 channel the day before college football season. What a bunch of pricks .

  3. Big Mike

    Dish you dropped AMC, I will switch before the Walking Dead begins,but the Question I have is… How come my monthly Bill didnt go down? I lost 4 channels so my bill ought to be at least 15 to 20 bucks lower . Im still paying for AMC. Call Dish and ask what`s up I bet they say sorry how about some free movies…

  4. So will Ergen saying he will pay my iTunes bill for watching these shows elsewhere. Sounds fair. Since I’m still paying for AMC on Dish and not getting. I think I’ll take him up on that and give dish a call.

  5. Alysson

    We are absolutely furious with dish getting rid of AMC. It is one of mine and ump-teen others Favorite channels for years now. Truly considering switching before IFC and Sundance. He loves to watch independent movie channels…Better come up with a solution to this problem dish or you are going to lose more people then you think!

  6. Well, Mr. Ergen, you must not have had any guests to your home recently. They ‘came’ in the past. They would ‘come’ in the present & future. Perhaps that’s why they never mentioned watching AMC programming? One of the joys of watching it is correct usage of the English language.

  7. fivebyfive

    Where is the subscriber revolt, you ask, AMC?

    Well, let me tell you. I love AMC shows. I am a Dish subscriber. I was really looking forward to the new “Hell on Wheels” season, and I am pretty p***ed off to have been robbed of shows I actually watch on channels I actually like (as opposed to the zillions of channels I’m forced to buy in order to view the 19 I actually watch).

    AMC invites me to switch TV providers to solve my problem.

    But here’s the thing, AMC. I am in a TWO-YEAR CONTRACT with Dish. It costs me a LOT of money to simply dump Dish and switch to my other option, DirecTV (I live in the mountains and can’t get cable TV).

    Would I do that, if I thought this was a one-time problem? You know, I might.

    But here’s the thing, AMC. For a couple of years, I had both DirecTV and Dish Network at my house. During that period, both of these distributors blacked out channels that I had paid for and should have been receiving while they engaged in pissing contests with content providers like yourselves who wanted to raise rates. From what I read in the papers, this is a trend that is not only going to continue but worsen over the next several years as the distributors gets squeezed harder and harder.

    So tell me, how does it benefit me, a powerless consumer, to switch providers to solve THIS problem, when three months down the road, DirecTV will be blacking out some other channel I care about for some unknown period of time? You — the content providers and the distributors — have made it abundantly clear that you don’t give a crap about the consumer. You force us to pay for content we don’t want by shoving bundles down our throats instead of letting us buy channels a la carte … force us to pay for content that we DO want even when we’ve been cut off from it while you try to strong-arm one another … and during all of this, you continue to jack up the cost (to us!) of participating in this madness.

    I’ve about had enough. My husband and I are talking about downgrading our pay TV subscription now to the most basic package we can buy, and supplementing that with movie rentals from Netflix, Blockbuster, or Amazon. We’ll still be paying for content, but at least we’ll only be paying for content that (1) we actually want and (2) we actually get.

    Guess we’ll catch this season of Hell on Wheels next year when it comes out on DVD, if we still care about it then.

  8. gonzo90017

    This seems like good news for Dish next time they have a dispute with someone else. All networks always expect them to cave which is usually the case.

    AMC needs to stop trying to bundle those other channels no one watches. In fact everyone needs to stop forcing bundles. Everyone says that it would result in a higher bill each month. But it seems like every year someone renogotiates they try to force new niche channel bundles which ends up in higher bills anyways.

    Anyways being a cord cutter i’m glad I don’t have to go through all this drama.

  9. well “charlie” we know several people that watch AMC and we want it back!! before the new season begans. cable sounds better the closer we get to that date!