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Analysis & Opinion
The problem with Netflix
By Liana B. Baker and Yinka Adegoke
Fri May 4, 2012 4:16pm EDT
(Reuters) - Subscribers to Dish Network Corp could lose TV shows such as "Mad Men and "The Walking Dead" as a result of a dispute between the satellite TV company and AMC Networks Inc over programming fees and a 4-year-old lawsuit.
Dish spokesman Bob Toevs said in a statement on Friday that the satellite provider had decided to drop the channels IFC, Sundance, WE and the AMC Network's flagship AMC channel when its contract expires in June.
AMC first said that Dish planned to drop its programming in a statement on Friday related to a 4-year-old breach-of-contract lawsuit that a subsidiary of AMC Networks, called VOOM HD, had brought against Dish. VOOM HD is seeking more than $2.5 billion in damages against Dish for improperly terminating a 15-year contract in 2008, according to a statement by AMC Networks spokeswoman Georgia Juvelis.
The case is set to go to trial in the New York State Supreme Court after the judge denied Dish's pretrial appeal against a claim it had destroyed evidence in the case.
Dish responded that the VOOM litigation is a separate matter from carriage fees, saying it fairly ended its agreement with the AMC Networks unit, which had not delivered the content it had promised.
Dish said that AMC was charging too much for its programming and that it also drew low ratings. It said customers could watch AMC's programming on the Internet, on Netflix or Amazon.com. AMC licenses older seasons of its shows to Netflix and Amazon.com, but not its current seasons.
Meanwhile, AMC said on Friday that "The Walking Dead" was the No. 1 scripted drama with Dish subscribers in the most recent quarter, according to Nielsen Media Research.
As AMC evolves from a sleepy backwater cable channel for old movies to a home for premium TV shows, cable and satellite operators have braced themselves for an increase in subscriber fees by the New York-based company.
AMC executives have said they expect to triple the fees they charge carriers to 75 cents per subscriber over the next four to five years with various partners.
AMC raising its affiliate fees for its increasingly popular networks brings its own challenges.
Cable operator Suddenlink Communications pushed back this month, warning customers AMC was demanding up to a 100 percent increase in fees over the length of its current contract.
The dispute was resolved with the operator - which boasts 1 million subscribers - but not before it got nasty, according to one senior executive. Disputes with larger distributors such as Dish, which has some 14 million subscribers, are bound to be even more complicated.
(Reporting By Liana B. Baker)
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