Deadline Looms For Dish, AT&T U-Verse Subscribers To Get Hosed In Spat With AMC

As we mentioned last month, Dish Network says its relations with AMC Networks — which also includes IFC, The Sundance Channel, and WeTV, though people only really care about AMC — is kaput and as of July 1, subscribers will be left without their meth-making science teachers or slickly dressed ad men. The clock is also ticking on the deal between AMC and AT&T U-Verse that expires this weekend. Regardless, it’s the TV-watching consumer that will pay in the end.

In a statement to Consumerist, AT&T argues that “AMC Networks is seeking an excessive rate increase in our overall fees for the right to deliver these channels.”

The Death Star claims that AMC is asking it to pay nearly double what it believes its competitors pay.

“We believe the rates they are seeking are disproportionate compared to the viewership we see across their channels,” says AT&T, which says that if it accepts the AMC cost increase, it could lead to higher cable prices for subscribers.

The fact is that AT&T and AMC will almost certainly reach some sort of compromise. And that compromise will not be a decrease in the fees paid to the network, which will inevitably lead to higher prices for U-Verse subscribers.

And if AT&T and Dish follow through on their plans to cut these channels from the lineup, then subscribers are still effectively paying higher rates because they are receiving fewer channels for the same price.

Dish appears to be resolute in its decision to say goodbye to AMC, though the network continues to run a campaign asking fans to lobby the network to rethink things.

This situation is yet another example of why broadcasters’ practice of bundling minor networks in with hotter properties. Both Dish and AT&T have made it pretty clear that they don’t feel their customers want to pay extra for channels they don’t watch, and of the channels involved in this dispute, only AMC brings in a decent amount of viewers — and even that is only for a handful of awesome shows.

Time Warner Cable CEO Glenn Britt said as much when he recently remarked that there are “too many networks… and the industry would take cost out of the system if they shut those networks down and offered lower prices to consumers.”

At a time when a small but rapidly growing number of Americans are opting to go without cable or satellite TV for their home entertainment needs, both cable providers and broadcasters should be doing everything to keep customers from cutting the cord.

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  1. Coffee says:

    Enjoy fighting over your money, guys. In the meantime, people who have paid for the cable service and received that programming in the past are going to get frustrated and torrent the shows. Then they’re going to realize that, “Hey…Breaking Bad and Mad Men are really the only two shows I care about on cable, and they’re on Netflix. Maybe I’ll just wait for the seasons to come out there and just cancel my subscription altogether.”

    • Blueskylaw says:

      This. They’re squabbling over nickles between themselves while at the
      same time losing the dimes that actually make up their bread and butter.

      • Coffee says:

        I call it the Streisand Effect because of Barbara Streisand’s penchant for whipping nickels at any small child she sees. In the end, she loses money and the child has probably tried to eat one of those nickels and choked to death. Everyone loses.

    • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

      This. I’ve come to the realization there’s nothing on TV that I can’t wait to see at a later date.

      • nugatory says:

        same here.

        The difference is that at the beginning of season on TV, I’d be mildly excited to see new shows I watch. Now with Netflix releasing an entire season at once, I get nearly apoplectic with excitement.

    • Southern says:

      I couldn’t care less about AMC honestly, never watch it — but what gets me is that the “rate increase” will be passed along to me regardless.

      *Sigh*

    • spamtasticus says:

      And they wonder why everyone is flocking to thepiratebay.org

    • Jawaka says:

      And then one day they’ll receive a letter in the mail from a lawyer about being sued for stealing copyright materials. Good luck with your defense.

    • theblackdog says:

      Or in my case “I’ll pay 1/3 the money I pay for one month of cable, and get to see all the new episodes of Mad Men on Amazon Instant Video the day after they air”

  2. Mr_Magoo says:

    This situation is yet another example of why broadcasters’ practice of bundling minor networks in with hotter properties.

    The above grouping of words is yet another example of why Consumerist’s practice of posting without proofing.

  3. MCerberus says:

    Dear broadcast and cable networks as well as pay TV providers,

    I know things are changing pretty quickly in your market, the internet being what it is and providing free avenues for similar products and the gaming and social networking markets taking a higher cut of peoples’ time.

    That said, you should stop whining, yelling, and suing. It didn’t work out well for the RIAA.

  4. Blueskylaw says:

    “We believe the rates they are seeking are disproportionate compared to the viewership we see across their channels,” says AT&T, which says that if it accepts the AMC cost increase, it could lead to higher cable prices for subscribers”

    I also thought that whenever AT&T raised rates on me, it was disproportionate compared how much their profit margin actually was. They told me to go pound sand and mumbled something about shareholder value and golden showers (of money).

    • Jawaka says:

      The difference is that AT&T doesn’t just turn around and steal the product from AMC when they can’t get it at the price that they feel comfortable with.

      There is no excuse for theft.

      • JEDIDIAH says:

        Who needs to redefine basic moral concepts for their own self interest like you just did?

        We can just wait for this stuff to trickle down to Netflix and make all of your sanctimonious claptrap completely irrelevant.

  5. gman863 says:

    If cable and satellite providers had a clue (as in how many people are jumping to Netflix, Hulu, etc.) they would start offering a la carte channel options for subscribers.

    As an example:

    * $15/month base fee. Includes only the channels that are free to broadcast (C-SPAN, NASA) and the channels the operator makes sales commissions from (HSN, Crappy Jewelry Sales, etc.).

    * Local channel option, $5. Local TV stations charge cable and satellite providers a fee for carrying their signal. Why the f*ck sould I have to pay for the local CBS, ABC, NBC and FOX affilites when I can get them free off my antenna?

    * ESPN package. ESPN is the most expensive non-premium channel, about $6/month wholesale per subscriber. Dumping all the sports channels (ESPN, Fox Sports, Golf Channel, NBA, NHL, etc.) off my DirecTV subscription should save me about $12-$15 per month.

    In the long run, a la carte programming should save subcribers money. Channels will have to fight for subscribers, just as magazines, newspapers and paid Internet content providers do. Yes, there will be casualties as weaker channels fold (buh-bye Oprah). Unless cable and satellite providers want to retain the millions who may switch to Internet TV, they need to get off their asses and give the people what they want.

    • Loias supports harsher punishments against corporations says:

      What do I have to pay to NOT get the channels they get commission from?

    • HomerSimpson says:

      You do understand that it’s up to the media providers and not the cable/satellite companies, right? The former is more than happy with the arrangement as is and has no plans on changing it.

    • LostClan02 says:

      If only, unfortunately the reason some of these channels (at least in the cable world) are at that $6 and under price point is forced exposure by forcing MSO’s to carry the channels on Basic or low level channel tiers. If true ala carte pricing ever came about (forgetting about the entire cost to cover the cost of plant integrity blah blah blah) those channels you want would be more along the $15-$20 range.

      People think that with a flip of a switch and a drop of a hat pay TV providers could offer customized channel plans. Just doesn’t work like that.

  6. Loias supports harsher punishments against corporations says:

    I’m curious if, let’s say you only watch about 10 shows on cable total, if you save money obtaining those shows legally over the course of a year rather than paying for cable.

    Legally we’re talking any combination of services like Netflix, Hulu, Roku, etc.and even buying the seasons on DVD right when they come out. Obviously you’d be one season behind.

    • Coffee says:

      If you’re not a sports fan, I think the answer would be a resounding “yes”. I pay for Netflix and Hulu, and there are relatively few shows that I feel like I’m missing. Even if I had to purchase DVDs of three or four of them, that’s equivalent to what? A month of cable service?

      • Loias supports harsher punishments against corporations says:

        The only thing that gives me pause to say yes is that without a bundle I pay a lot more for my internet than I would with an internet/cable bundle. I suppose you could also argue my internet is subsidizing my cable rather than the other way around. But at least on my billing statement, my internet is much more without cable than before.

        Otherwise, I agree very much.

      • nugatory says:

        The only show thats not on netflix and I’d like to watch again, would be NCIS. All my other shows are there. Once you get past the “season behind” viewing its all good.

    • who? says:

      I did the math for myself, and it was less than half the price to pay for everything I actually watch with a combination of antenna, Netflix and iTunes. When I did the calculations, I even included buying Mad Men and Breaking Bad when they first aired, instead of waiting for them on Netflix.

      I don’t watch sports, however, and had to give up the hours and hours of House Hunters that I was watching. But dropping cable has worked out for me just fine. I even managed to negotiate a cheaper rate for internet than I was paying, by threatening to take my broadband lovin’ ass to the competition. The cable company still wanted me on the books, even if I’m only paying them $49/month now, instead of $160.

    • JEDIDIAH says:

      The trick is availability and timing. Not everything is available for streaming. Not everything is available immediately. However, there will certainly be a large chunk of the audience that can be sufficiently well served by Hulu, Netflix, Amazon and iTunes and at a much lower cost too.

      If not today then tomorrow perhaps.

    • theblackdog says:

      Definitely! I paid only $27 to get the entire season of Mad Men on Amazon Instant Video, and they make the episode available the day after it airs.

      I would have to pay about $50 a month to FiOS just to have AMC so that I could watch Mad Men (and The Walking Dead).

      So in this case, $54 < $600 and I can re-watch the episodes any time.

  7. TheMansfieldMauler says:

    I know the AMC original series stuff is popular and most of it is pretty good, but the rest of the time the channel is unwatchable. During a movie they’ll have so many commercial breaks, each with so many commercials, that it isn’t worth the time to watch it. Sometimes they insert a commercial break with 12 commercials right in the big middle of an important scene, just cutting in between an actor’s lines, and the closer to the end of the movie you get the more breaks there are.

    Screw ‘em. You can watch any of their original stuff in other ways. If it’s any good, it’ll be out on DVD for rental later.

    • JEDIDIAH says:

      Yeah. There are a number of channels like that. They will have only one or perhaps even two good shows for the entire channel. At that point, it seems more sensible just to buy the individual shows. I already do that with True Blood and have no problems waiting the requisite amount of time. I could do that with Game of Thrones too if I ever got into it. Would probably have to borrow the DVDs from a friend first.

      Exposure is marketing and if there’s no exposure, you can be sure they’re not going to buy.

  8. mikedt says:

    So this begs the question, what is the bigger revenue stream? Ad dollars on the network itself or the carry fee they charge the cable/satellite companies? There’s only a handful of carriers in the US so it seems to me losing even one of them severely cuts your potential/real viewership which means your ad revenue has to go down. Kind of like cutting your nose off to spite your own face.

  9. JulesNoctambule says:

    I do wonder why cable companies seem determined to adopt the Sears ‘drive away customers with bad service’ business model.

  10. twritersf says:

    What I continue to not understand in all these spats is: All these “minor” (and some major” cable channels show ads. Presumably, they charge companies and organizations to air those ads. Ad rates in a well-run company vary depending on the viewership. So why doesn’t the revenue from the ads cover the cost of running the network? Why do they need more from the content distributors? And isn’t cutting off distributors, thus reducing the number of viewers and reducing the rates you can charge for advertisements the clearest possible example of cutting off your nose to spite your face?

    • Auron says:

      Because of the way the system works: The companies that make the TV shows pay for everything up front: Cast/crew salaries, equipment, etc. There is no guarantee that they will have enough viewers to watch the ads. That’s why they depend on ad revenue to pay for the shows. The network that buys/makes the show has already paid x amount for x number of episodes. SO unless y ad revenue is greater than x amount to buy/make the show, the show will be soon given the axe. The actors may be able to wait the months and/or weeks between the time an episode/season/series wraps and the time it airs to get paid, but the people that work behind the scenes (lighting, sound, set design, wardrobe, etc) often can’t.

      • twritersf says:

        Well yeah, there are never any guarantees in Hollywood. And BTW, everyone gets paid up front, including actors. It’s just that some actors, as well as producers directors, writers, and some others, often also get paid residuals, payments they receive every time an episode that they were involved with airs. But for networks, it’s always been a calculated risk. The price of a show is known up-front, so a network has to acquire enough of an audience and set its ad rates high enough to pay for the up-front cost and make a an additional profit. The vast majority of shows don’t make money, but a few make so much that it makes up for those that don’t. If a network can’t find or develop enough content that enough people want to see, then maybe it’s just that that network shouldn’t be in business.

        • Auron says:

          Thats the whole reasoning behind a-la-carte pricing and these spats between carriers and networks. Company A owns 4-5 networks, but only 1 is profitable. Company A says to the carriers you can’t carry the profitable network w/o carrying the unprofitable ones. If we had a-la-carte pricing, a lot of the unprofitable but niche channels would disappear from the lineup. Kinda like how the free market should work.

  11. anime_runs_my_life says:

    As long as they reach some sort of compromise before The Walking Dead starts again, I’m not watching AMC much. I don’t even watch the other channels.

    • who? says:

      I think the biggest concern for most people is that a new season of Breaking Bad starts in a couple of weeks.

      • Lyn Torden says:

        Then let them get those channels on Direct. Dish might lower their pricing a bit w/o them.

      • anime_runs_my_life says:

        Not a fan of Breaking Bad (which IMO is not that good a show). I have AT&T, so as long as they have it when The Walking Dead starts, that’s all I care about.

    • Lyn Torden says:

      Same here. 4 junk channels. Maybe Dish can put them on the Golden One Percenters Tier that costs $500/mo.

  12. Foot_Note says:

    in response to the TW CEO.. less networks? simple, get rid of all the home shopping nets.. problem solved ;)

    • who? says:

      I agree with the TW guy that says that there should be less networks. The way to get less networks? Allow ala carte channel selection. I would gladly pay $40-50/month for the 8-10 channels that I actually watch, rather than $100 for 250 channels, 240 of which I will never look at.

      Instead, I pay Netflix $7.99, and iTunes about $40/month for individual shows, and the cable company gets nothing.

      • Demoliiton Man says:

        I’d love to have ala carte so I can have ONLY the channels I really want. Sadly the cable/sat companies along with the content providers are all going to fight tooth and nail against this namely because they all want to make as much money as they can in the short run instead of doing the RIGHT thing for long term profitability.

        Me personally… the channels I’m mostly watch would be Fox Soccer, the various ESPN Networks, NBA TV, NFL Network, the soon to be launched BeinSports channels, GolTV, USA, Syfy, TNT, AXS.TV (formerly HDNet), HDNet Movies, Palladia, and the MLS Direct Kick package. I’d also would love to see This Week In Tech given a full time HD station that simulcasts the live stream feed that they have only in HD.

    • Demoliiton Man says:

      Sadly the shopping channels actually pay to be carried on the cable/sat providers. You would think in this era of Amazon.com and what not that people wouldn’t bother with those channel but sadly there is still people out there who watch QVC and HSN.

  13. frodolives35 says:

    Breaking Bad and Walking Dead are the only 2 shows that make me wish I had cable or Satalite so I guess I can wait for a couple of hours and insert the online viewing hard drive.

  14. NorthAlabama says:

    [I]though people only really care about AMC[/I]

    chris, really??? between ifc, sundance and amc, amc ranks a distant third. i love the unedited movies on ifc, and indie flicks on sundance (if only sundance was in hd).

    i’m glad my provider is not involved in this squabble, i would be losing two of the channels i love to watch…

    • Demoliiton Man says:

      The real loss in all of this is WeTV. I mean seriously… look at the programming WeTV has such as…. uuhhhh… THAT SHOW… and…. THAT OTHER SHOW…. and most importantly… THAT OTHER OTHER SHOW THAT IS THE GREATEST THING ON SLICED BREAD! So yeah… forget AMC with Breaking Bad and Mad Men its all about WeTV!

  15. hammond egger says:

    And if AT&T and Dish follow through on their plans to cut these channels from the lineup, then subscribers are still effectively paying higher rates because they are receiving fewer channels for the same price.

    You mean Dish isn’t going to lower my bill when the AMC related channels are dropped? I pay them nonsense fees like $5 per month because one of my receivers isn’t hooked up to a telephone jack or internet so it seems only right that they should lower my bill when deleting channels that were included in my package.

    • Kaleey says:

      Actually, in their terms of Service, they can change the lineup whenever they want, and keep charging us the same.

      So they could reduce a channel package to 5 channels and still *technically* get away with it. I always hated that particular line of litigious lard.

  16. Peter V says:

    Netflix & Hulu Plus for a year is $205 add in Roku or Google TV for $99 and $305 + Internet you’ll pay no matter what.

  17. incident_man says:

    I just wish for once that Dish or AT&T or whatever provider would stick to their guns and let one of these greedy media conglomerates pull the plug on themselves. Maybe then their advertisers would get just pissed enough about the prospect of fewer viewers (and fewer product exposure) to pull the plug on their advertising. Then where would media companies like AMC be? Hmm……no revenue from Dish, no revenue from advertisers……..no money at all.

    Would seem to make these fights about carriage fee increases a bit irrelevant, wouldn’t it? Less viewers, less advertising, less money for AMC and companies like them. That would do quite nicely.

  18. scoosdad says:

    I had been dragging my feet on switching over to Dish from Charter cable that I had been meaning to do for a few months, but now maybe I’ll drag my feet a bit longer to see how this ends up.

    One of the big reasons I was going to switch was the utter lack of HD channels available in Charter’s pay movie packages. Only one HBO channel in HD, one Showtime, one Starz, one Movie Channel, one Cinemax. That’s it. But with Dish and DirecTV, virtually all the pay movie channels are in HD (a few still aren’t) and that really bugged me about Charter. But I got a letter from them in the mail this week announcing the addition of a bunch of HD movie channels to our local cable lineup (still not on the scale of a dish package, but maybe good enough for now) so I might stick around awhile longer.

  19. castlecraver says:

    How about they just work it out without the manipulative “call your provider” advertisements during Breaking Bad? I’m on FiOS so I’m unaffected (this time), but I remember when TWC went through the same thing with Fox and it went exactly the same way. Calling your provider does jack squat, and people who want to see their shows bad enough will still see them with or without the channel on their cable. They need to stop patronizing the consumer as if they have any say in the matter, and as if this isn’t just a prelude to a rate increase. All it does is convince people who were considering cutting the cord to go ahead and do it.

  20. MaxTorque says:

    So many people argue, “This is why we need a la carte cable/satellite TV! No paying for channels we don’t want!” Which would be great…if the rest of America likes the same channels you do.

    If the less-popular channels aren’t bundled, they’ll fold, because there aren’t enough people willing to pay for them individually. I mean, I like “Mysteries At The Museum” on the Travel Channel, but not enough to pay for the channel individually just to see it. And I’m sure most people feel the same way about other channels, including the ones I actually would pay for; there are so many channels now that viewership is spread super-thin among all but the most popular channels.

    If the only channels that can survive are those that a lot of people are willing to write a separate check for, eventually all those little channels will die, and there’ll be nothing left to watch but NASCAR and the Weather Channel.

  21. Proselytic says:

    This isn’t about just the money per say. It’s also about implementing that same policy Wal-mart tried and failed at, replacing the brand name for their own generic brand. Dish Network has been busy pulling other channels, like Sundance, etc. and replacing them with their awful Blockbuster channels. Yay Accountants!?!? Complaints about Dish Network and Blockbuster should be forwarded to the bbb.org (Doesn’t do a lot of good, but still worth the effort.), fcc.gov and ftc.gov (Under Other.) . Probably your only hope against these predator companies.