Satcaster Dish Network said Monday plans to drop AMC Networks cablers because many of its rural subs aren’t big “Mad Men” fans and those who are can get the show on iTunes or Amazon.
During a conference call to discuss quarterly earnings, Dish Network chairman Charlie Ergen took issue with programmers that he said “devalue” content by making it widely available on other outlets. Just about all content companies are actively looking to roll out shows on numerous platforms, and there’s usually a delay of at least a season in streaming deals for new series.
“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,” Ergen said. “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.”
The contract between AMC and Dish expires June 30 (which is after the finales of both “Mad Men” and “The Killing”). AMC issued a heads up Friday that Dish had threatened to drop its networks, which include flagship AMC, IFC, We and the Sundance Channel. AMC claimed the move was in retaliation for litigation between the two companies. Dish denied the charge, insisting the decision was purely a matter of ratings and price. Ergen said AMC Networks programming would be valuable at some price point, but “that’s not where we are today.”
Dish reported net income fell 34% to $360 million for the quarter ended in March on tough comps from the year earlier. The 2011 period was boosted by a gain from settling a lawsuit with TiVo. Revenue rose 11% to $3.58 billion.
Dish gained about 104,000 net subs during the quarter compared with 58,000 additions in the first quarter of 2011.