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Dish drops AMC (+WeTV, IFC & Sundance)

Discussion in 'General DISH™ Discussion' started by lparsons21, May 4, 2012.

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  1. Jun 19, 2012 #781 of 1922
    steveT

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    And that's really the only argument Dish legitimately has, that this would be the beginning of a slippery slope that would lead to many more such increases in the future. But how many other networks can come in with arguments on their side about increased ratings, especially in the demographics targeted by advertisers, critical acclaim, emmy nominations, etc? There are VERY few networks in the hundreds carried by Dish that could make such a claim. So pay your suppliers who bring value, and hold the line on the ones who don't. Dish claims to be a major US corporation. If so, they should have some decent negotiating talent on their side to manage this. If not, then clean house there and bring in some people with skills.

    I'm sure some of Dish's position comes down to their place on the corporate food chain. As a previous poster noted, AMC's revenue and profits are less than 1/10th of Dish. So part of Dish's position in this just to be a corporate bully, trying to steamroll over the little guy.
     
  2. Jun 19, 2012 #782 of 1922
    bobukcat

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    Mad Men skipped an entire year because of a dispute between the producers and the network over the price of the show, did it not?
     
  3. Jun 19, 2012 #783 of 1922
    lparsons21

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    You may have missed the news, but the Dolans are not exactly 'little guys' when it comes to money! :)
     
  4. Jun 19, 2012 #784 of 1922
    356B

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    Apologies for not reading the entire thread, but how much money are we talking about here?
     
  5. Jun 19, 2012 #785 of 1922
    RasputinAXP

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    They're already treading dangerously close to killing The Walking Dead by nuking their budget and running off the main production team.
     
  6. Jun 19, 2012 #786 of 1922
    Stewart Vernon

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    You're still not looking at the big picture.

    IF AMC is in the top 25... then bet on all of those other channels asking for a similar rate increast if AMC gets to double their rates... then we aren't talking about pennies.

    It isn't like this happens in a vacuum. The next channel will say "but people like us too" and people will post here "I'll leave Dish if they drop the yoga channel, how dare they" and then that channel goes up too... and on and on...

    AMC doesn't have much to stand on to "demand" more money... just a handful of shows that they seem to be trying to strangle too. AMC is basically strangling for money at both ends here... Asking providers for more money AND asking their showrunners/producers to spend less money on those "award winning" shows... then the AMC folk get to pocket the difference.

    People like to say that Dish doesn't care about the customers/viewers... Please don't make the mistake of thinking that AMC cares for you any more than Dish does. AMC probably cares less, since they get money by being in a tier whether you watch or not.
     
  7. Jun 19, 2012 #787 of 1922
    phrelin

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    If the critics and the Emmys mattered to people who don't get paid to watch TV, the high rated shows on broadcast networks would be on NBC. They're not.

    The problem AMC has is that it only offers "Breaking Bad", "Hell on Wheels", "Mad Men", "The Killing", and "The Walking Dead" that get any discussion about ratings.

    Last season, of course, "The Walking Dead" finale got record live+same day ratings for AMC with 9 million total viewers and 6 million in the 18-49 demo.

    “Hell On Wheels” finished its season as the second highest rated series on AMC. The premiere and same night encore delivered a total of 3.8 million viewers 1.3 million adults 18-49. That's ok, but nothing to write home about. Last Thursday on the History Channel the 9 pm showing of "Swamp People" pulled 3.9 million viewers and 1.3 million adults 18-49. And in other weeks, "Hell on Wheels" didn't do as well, a fact that's true for all AMC shows.

    And if you want to discover how AMC wins the "let's say stupid things to weaken our position with cable and satellite providers" award, read this article which states:
    So while Viacom sees streaming as a problem, AMC sees streaming as a good choice for its viewers. So does Dish. So everyone's in agreement. Isn't that great!:sure:
     
  8. Jun 19, 2012 #788 of 1922
    SayWhat?

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    Here's another angle to consider. If these shows are as hot and in demand as some think they are, who's to say TBS, USA or some other network won't outbid AMC? It's not like shows have never jumped networks before.
     
  9. Jun 19, 2012 #789 of 1922
    James Long

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    Corrected:
    I've got to stop doing math when I'm tired. :sure:
    It is still a lot of money each month.
     
  10. Jun 19, 2012 #790 of 1922
    steveT

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    Don't get me wrong Stewart, because I do find your posts here both interesting and compelling, but I do believe I am looking at the big picture, and particularly from a corporate management standpoint. I posted a fairly lengthy top level look at Dish's finances based on their own reporting (see post 771 in this thread), but I've yet to see anyone post any counterpoints here based on those actual financials. Dish's profits and stock price probably wouldn't be significantly impacted even if they had multiple similar disputes. It would take more than that to make a significant dent in that $1.5B in profits Dish banked last year.

    Look at another number from Dish's 2011 report (page 55). Dish reports average monthly revenue per subscriber of $76.93. Comparing the 25 cents AMC is asking for to that number, it's 0.3% of that total. So even if they had to shell out that much extra in 5 similar disputes in one contract year (very unlikely given the duration of these contracts), that would still only be an impact of 1.5% of revenue per subscriber. Once again, not a significant financial threat to Dish.

    Also let's compare the total AMC is asking for versus the cost of customers canceling if they drop AMC. At that monthly revenue per subscriber, Dish would only have to lose 47,554 customers over this dispute to make up the entire $43.9M additional fee AMC is asking for (assuming a doubling of the 25 cent rate). From Dish's own report, they lost 2.7M customers last year total (166,000 net). So if only 1.7% additional subscribers cancel over losing AMC, Dish has already lost more money than they would've if they'd just paid the extra 25 cents.

    Combine the risk of that, with the risk Dish has already taken publicly by advocating that people switch to viewing these programs on amazon or iTunes, and Dish is the one that isn't thinking big picture here, not me. It's almost like they're advocating for the destruction of their own business model.
     
  11. Jun 19, 2012 #791 of 1922
    Stewart Vernon

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    You can spin math however you want... If Dish had to give every channel 25 cents more per month, then say just 200 channels at that price means $50 per month.

    You might say "but, every channel won't ask for that"... ok, but where do you draw the line? 100 channels? 50 channels? 25 channels? Wherever you draw that line, then the next channel that asks for that increase will bring us right back to this same discussion for that channel... and you'll try to say once again that it isn't a big deal to do it for just that one channel.

    So... drawing the line in the sand is somewhat arbitrary... and Dish has chosen to draw it here.

    Also... to argue Dish is the only one "risking" here... ignores that AMC is playing with their customers too... AMC is risking losing customers that they have been counting in their ratings... not all customers will leave Dish even if they support AMC's side in the dispute. Every time people say "there will be a mass exodus" there actually isn't a mass exodus at all... so for every point of "Dish is not being smart" there is a counterpoint "neither is AMC"... and while Dish might lose some customers who actually watch AMC... AMC will DEFINITELY lose all of the Dish revenue from that tier if the contract ends.

    Dish knows that way more people are paying for AMC than are actually watching it. I've done the math before too... less than 10% of the people who pay for AMC each month watched its highest rated program... usually it is more like 5% of the people paying for it. AMC could decide to go a la carte and charge what they want and only customers who want to watch would have to pay... but you can be guaranteed that AMC does NOT want to go that route.
     
  12. Jun 19, 2012 #792 of 1922
    cj9788

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    I hope Dish Network does not cave on this. Breaking Bad will begin it's final season July 15th and to stretch it out AMC is only airing 8 episodes this summer and the final 8 episodes in the summer of 2013.

    I am still wondering which way The third season of the Killing is going to go and that won't air til next year.

    Mad Men just ended their season and other than Breaking Bad and The upcoming season of The Walking Dead I do not see what value AMC has for me as a Dish subscriber. I never watch any of their movies and could careless if Dish does drop them for good.

    I do not mind waiting for the DVD's or using alternative mediums to watch the shows that I like.

    Dish stand your ground AMC needs you more than you need them.
     
  13. Jun 20, 2012 #793 of 1922
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    AMC isn't asking for 25c ... they are reportedly getting around 25c and asking for around 75c.

    And while it is easy to look at a $1.5 billion profit and say DISH makes enough money to absorb AMC wanting $60 million more next year Stewart has a point ... if all the allegedly top channels get a 200% increase it simply drives costs up.

    The $1.5 billion is also misleading as it was DISH's best year ever. They almost made more money in 2011 than they did in 2009 and 2010 combined. There is no guarantee that the level of profit will continue (and 1st Quarter 2012 was 35% down from 1st Quarter 2011).

    The funny thing about losing customers is DISH doesn't have to pay for their programming. Yes, one could say that every lost customer is $76.71 (1Q 2012) less in revenue ... but it is also a reduction in expenses. For a more realistic number, look at the profits.

    In DISH's best year yet DISH made $9.10 per subscriber per month. The year before was $5.81 per month (the best in five years) with their worst year since 2006 being $3.76 per month profit per subscriber. There are fixed costs that are not reduced by losing customers, but losing customers also saves DISH money.

    Look at last year, DISH's best year for profit ever ... they lost 166,000 customers, their highest annual loss ever. 2008 was a good financial year, making $903 million dollars and losing 102,000 customers.

    So, why should DISH panic as much as some people here do about losing customers? A customer count is a point of pride, but customers are expensive! :)
     
  14. Jun 20, 2012 #794 of 1922
    steveT

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    I am not "spinning" the numbers. They are all easy and straightforward conclusions to draw from calculations taken directly from Dish's own financial reporting. Please point out where the "spin" is.

    And saying this would happen for "200 channels" is purely a straw man argument. Given how contracts are determined in this industry, that outcome is utterly impossible.

    Where to draw the line? A channel that can show ratings increase, particularly in the 18-49 demographic desired by advertisers, has a legitimate argument that their product has more value, and therefore justifies a higher price (this is how capitalism is supposed to work, for what its worth...)

    And you would hold the line at networks that have no such argument. For those who think that a deluge of networks would roll into Dish's headquarters, saying "you gave AMC a price increase, so you have to do it for me!", just think about that. They'd be laughed out of the building. This process is supposed to operate by business rules, not schoolyard rules.
     
  15. Jun 20, 2012 #795 of 1922
    steveT

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    Understood. My estimates were based on AMC getting an incremental 25 cents.

    Without ever seeing this reported in detail, it appears that these contracts with providers have terms on the order of 3-4 years. So at most, you'd only have renewals of 1/3 to 1/4 of the top channels each year. Then you have to add in a factor for which networks have legitimate claims based on ratings to ask for a large price increase. Then you'd have to factor in the percentage of the asked-for increase is actually agreed to. By the time all those factors are included, the net result would be far from 200% across the board increases (call it the "Drake equation" of the media provider industry...)

    And if AMC is asking for a 200% increase, does anyone really think that's their "red line" in negotiations, and they aren't willing to settle for something less? When one makes an offer on a buying a car, don't we expect to be meeting the dealer somewhere in the middle? Asking for 200% (which we're all assuming just based on media reports, not on any known facts), isn't it likely AMC is really shooting for an end result somewhere between 50-100%?

    The fact that they had their best year ever in such a bad economy shows that Dish has more control of their operations than people must believe. It also probably demonstrates that in bad economies, consumers are more willing to pay for home entertainment, versus retail purchases, trips, etc.

    I'd feel bad for any company that takes the attitude that customers are too expensive. We're the ones that made Charlie and his buddies rich. After 25 years on the tech industry, dealing with hundreds of companies, my conclusion has been that a very small percentage of established companies truly focus externally on customers, versus internally on their own politics and priorities. And the companies who are customer-focused are always the huge winners long-term, while the others sit back scratching their heads, wondering why it hasn't worked out for them, despite all their best laid plans.
     
  16. Jun 20, 2012 #796 of 1922
    hdaddikt

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    It seems in all the years I've been with Dish, things get settled, very few issues like this end up with us losing a channel of interest. You can argue about how little interest there is in AMC, but just the fact if it generated this much controversy just on this and similar forums, leads me to believe it is a popular network.

    I guess we are being told Dish is being held hostage to fork over more money, and we should not expect the same case for other providers? Like Direct who will continues to offer AMC across all tiers.

    The fact Dish puts it only to the top tiers tells me they place more value on it. But no I'm told it is a specialty channel that's why it is not taking up space in the lower tiers. It's is in the higher tiers because of less general interest.

    Of course, no one who would only consider lower tier programming would have any interest in AMC, SPEED, COOKING, NAT GEO, etc. etc. etc.:rolleyes:
     
  17. Jun 20, 2012 #797 of 1922
    Blankman2k5

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    This is definitely an interesting arguement and a great read. I have no dog in this fight but I understand where dish is coming from. I feel that AMC deserves to make a decent amount per customer but a .50 increase is not fair, in my humble opinion.
     
  18. Jun 20, 2012 #798 of 1922
    DoyleS

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    Putting AMC in all tiers would mean Dish would pay the fee for all of their subscribers. Having it only in the top tiers means they pay for the subscribers that get it and maybe that is a slightly higher fee than if it is in all tiers. Simple price volume situtation. We do not know when the Direct/AMC contract expires. Based on the AMC 2011 report, it could be next year.
     
  19. Jun 20, 2012 #799 of 1922
    steveT

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    If that's true (that Dish only has to pay AMC based on subscribers only in that tier), then all of the recent discussions we've been having here on the economics of this have been wrong! And it means that the cost of keeping AMC to Dish is substantially LESS than we've estimated, weakening Dish's case even further!
     
  20. Jun 20, 2012 #800 of 1922
    DoyleS

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    We could just be watching a Hatfields and McCoys event here with Dish taking their revenge for the whole Voom fiasco and AMC trying to stick it to Dish on cost.
     
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