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AMC: Dish Drop Lowers Subs Base 13%

9 Aug, 2012 By: Erik Gruenwedel

AMC Networks Aug. 9 said the ongoing carriage dispute with Dish Network whereby the satellite TV operator dropped its programming has resulted in a 13% decline of total subscribers and will impact fiscal results going forward.

AMC, which includes AMC, WE tv, IFC and Sundance Channel, said Dish dropped its networks to gain leverage in an unrelated lawsuit. AMC is seeking $2.5 billion in damages in that dispute with Dish, which several years ago dropped its involvement in Voom HD — a shuttered high-definition network. The trial is scheduled to begin Sept. 18 in New York.

AMC programming includes “Breaking Bad,” “The Walking Dead,” “Portlandia,” “Hell on Wheels” and “Mad Men,” among others.

“Dish off of our platform has significant impact on our universe,” CEO Josh Sapan said in a call with analysts.

He said there has been a “fair amount” of consumer feedback on social media regarding Dish dropping AMC programming to its subscribers about five months ago. Sapan, who limited his comments due to the pending litigation, said he believes the conflict with Dish is not about carriage fees, despite allegations to the contrary by the satellite TV operator.

Indeed, Dish founder and chairman Charlie Ergen Aug. 8 told analysts that Dish subs — including his family — don’t care much for AMC programming.

“I've had satellite television for as long as satellite television has been around and there's never been one minute that I know of anybody in my family, or anybody who's came to my house, has ever watched one second of any of those channels,” Ergen told analysts.

AMC, which was spun off last year by Cablevision, said second-quarter (ended June 30) net income of $41.5 million, up more than 53% from net income of $27.1 million during the previous-year period. Revenue increased 13% to more than $325 million from $292 million.

Principle revenue drivers included ad sales and home entertainment (disc and electronic) sales of “Breaking Bad” and “The Walking Dead,” among other titles. The programs are also available on subscription video-on-demand services such as Netflix. AMC gained 500,000 subscribers in the quarter to end the period with 96.9 million subs.

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