Ergen Leaves Little Hope For AMC Settlement8/08/2012 2:52 PM Eastern
Dish Network chairman Charlie Ergen didn't offer much hope of a reconciliation with AMC Networks, telling analysts on a conference call this afternoon that although he may lose some customers for dropping the channel, most won't notice.
"Our customers are not looking at zombies in New York City," Ergen said on the call, referring to the AMC hit The Walking Dead. "They live on farms and ranches."
Dish dropped AMC Networks, including AMC, IFC, WeTV and Sundance Channel, on June 30 after it could not reach a carriage agreement with the networks. Ergen has long complained that AMC Networks is demanding too high a price for carriage and criticized the channels in the past for making its content available for free online.
AMC has countered that Dish dropped the networks in retaliation for a $2.5 billion lawsuit filed by the former Voom HD networks, now housed within AMC, for breach of contract. That trial is scheduled to begin in September.
Ergen dismissed the idea that the Voom litigation influenced his decision.
"The real question is going to be what happens when someone else takes AMC down," Ergen asked. "What is AMC going to say about that? There is a slippery slope out there. We may be a year ahead; we may be two years ahead; we may be a year behind. But the world is changing and you're not going to have everybody having every program out there."
Ergen said that programmers that make their content available online are forcing distributors to make a choice between paying large rate increases to keep channels on their systems, or dropping channels and letting customers find those shows on the Internet.
"For us the economics of that was not a hard decision," Ergen said. "The payback on that, while we will lose some customers, our margins are going to be positively affected."