Satellite

Dish Chief Says Online 'Devalues' Content

5/07/2012 2:30 PM Eastern

Dish Network chairman Charlie Ergen told analysts Monday the reasons behind his decision not to renew carriage deals with AMC Networks have more to do with low ratings, adding that making shows available online "devalues" content for distributors.
Dish said last week that it would not renew its carriage deal with AMC, the home of popular programming like Mad Men, The Walking Dead and Breaking Bad. The decision came almost simultaneously with a court move that denied Dish's appeal of a prior decision that said the satellite giant destroyed evidence in a separate litigation with Voom Networks, currently housed within AMC.
On a conference call with analysts Monday to discuss financial results, Ergen reiterated Dish's claim that the decision to drop the AMC Networks - which include AMC, IFC, Sundance and WeTV - was made because outside of a few shows, the networks are not popular with Dish's primarily rural viewership. And Ergen said that Dish subscribers that want to see those shows can do it through other avenues, including iTunes and Amazon.com.
"One of the things that programmers have done is they've devalued their programming content by making it available in multiple outlets," Ergen said on the conference call. "Our customers are not really saying ‘we want to pay more money,' they're saying ‘we want more flexibility in our programming and we don't want to pay more.' From a timing perspective that is just a contract that we can change. We believe the product has been devalued, not that there are not some good programs, but it's been devalued because you can get it multiple ways and customers have more flexibility to get the programming. It's not quite the same as if something were exclusive."
The Dish chairman added that the increasing availability of shows through other platforms will eventually bring the issue of programming value to a head.
"All MVPD companies are going to have to look at this, we're not going to be the last ones to take a look at these kind of issues," Ergen said. "Typically most customers have four providers to choose from who all vie for the same thing. There is probably going to be some break out of one of more companies offering something a lit bit different at more different prices so customers have more of a choice. That may be disruptive long term, but maybe an opportunity to gain market share long term."
AMC has claimed that The Walking Dead is the No. 1 scripted drama with Dish subscribers.
"It is unfortunate that, because of setbacks in an unrelated litigation, Dish even suggests that they might deny their customers access to some of their favorite networks and shows that are offered by every other major satellite and cable TV provider," AMC said in a statement last week.
Ergen said that obviously the AMC Networks programming is valuable at a certain price point, but that "that's not where we are today."

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