Commentary

Why Does Dish Limit Its Dropping Logic To AMC Networks?

by Wayne Friedman , Staff Writer, August 10, 2012

Dropping AMC and three sister channels has been good for Dish’s bottom line. That's the sentiment from Charlie Ergen, chairman of Dish Network, according to the Denver Business Journal.

But you have to wonder how much this kind of criteria could extend to other networks. Wouldn't dropping say ESPN, CBS, Fox News, Discovery, NBC, USA or TNT also help the satellite service’s bottom line?

Ergen says some key research shows what Dish customers want: “We have data, real data, from our customers, and for whatever reason our customers don’t watch some of those critically acclaimed channels at the level that we read about in the paper — perhaps because we skew a bit rural or whatever."

Hmm…Just wondering if that data also has "ratings" or "Nielsen" or "demographics" affixed to the research. We know it's set-top-box data, for sure.

Some TV executives and consumers have complained that ESPN should be dropped from many systems, or at least put on a separate pay tier, given the estimated sky-high $5-a-subscriber monthly fee it charges cable, satellite, and telco operators.

Wouldn't that help the bottom line as well? The answer to this question might be: C'mon. ESPN pulls in huge ratings, as much as 20 million for a top level "Monday Night Football" game. Yeah. And we imagine Dish sells some advertising in those games. But ESPN's ratings are still a fraction -- less than 10% -- of the 290 million potential U.S. viewers in around 116 million homes.

Could you make a case for losing USA Network, Fox News or TNT -- networks which also garner a pretty hefty wholesale price tag from TV distributors? Each of those networks gets an average 2 million or so viewers a night, or less than 1% of all potential viewers.

Ergen claims Dish might lose some subscribers due to the lack of those critically acclaimed AMC shows, but the economics would be worth it. We know AMC programs aren’t among the top cable programs in a given week. But couldn't that statement extend to a number of other cable and broadcast shows?

Consumers will always complain about the dropping of specific channels. But even if one nixes the usual whining that "higher fees could be passed on to consumers," distributors could always tell customers the obvious: There isn't a big enough critical mass that watches any particular network or program that makes any TV show a must-have.

Many advertisers have realized this in recent years.

Decades ago, this wasn't the case. Only a handful of networks got the lion's share of viewing. Marketers had to make sure they were on these big-rated shows. Now -- apart from some key big shows with demographics you can't get anywhere else -- advertisers can always go elsewhere, for the most part.

Dish is telling consumers that there is a ton of fractionalization in TV programming. You can go elsewhere on Dish for your TV fix – or, more specifically, you can go elsewhere, off the Dish programming service.

4 comments about "Why Does Dish Limit Its Dropping Logic To AMC Networks? ".

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Brian Hayashi from ConnectMe 360, August 10, 2012 at 3:32 p.m.
Apples and oranges. ESPN's deal with the NFL guarantees it a spot on the basic tier, since so many people subscribe to DISH specifically to get pro sports. As far as USA/Fox News/TNT, those nets have had decades of proven experience in managing programing costs and consequently bring a lot to the table in ad sales support in addition to their video library. AMC is a weird one because it had been doing so well for so long, albeit as a second- or third-tier channel. With the advent of "Mad Men" and now "Walking Dead", it's like they have suddenly gone slightly daft. (You should read up on the kerfuffle between AMC and former "Walking Dead" showrunner Frank Darabont for a more in-depth perspective on how AMC's management is "dealing" with this transition.) AMC clearly wants to pass the costs of a highly uncertain, hits-driven business on to DISH and the cable operators. DISH et al. are understandably cool to this idea.
Reply

Michael Kaplan from Blue Sky Creative, August 10, 2012 at 4:50 p.m.

I'll gladly give up ESPN to save $5 a month. And I'm someone who used to love watching sports on TV -- and still tunes in to the Olympics each night.

Harold Protter from TMG/INC, August 10, 2012 at 5:57 p.m.

There is bad blood between Dish and Cablevision, former parent of AMC including a still pending lawsuit over Voom HD networks, which Dish dropped years ago when other HD content made Voom irrelevant.

Ida Tarbell from S-T Broadcasting, August 13, 2012 at 3:24 p.m.

There are far too many TV channels and far too many programs on television in general. In almost any TV market you can name, radio stations are outnumbered by screens available for watching to viewers. This marginalization of television by the proliferation of channels by cable and satellite, has boosted radio in a major way as an ad medium.