Wednesday, July 11, 2012

Dish Network, AMC, DirecTV, and Viacom

There are times that I am thankful that I subscribe to the cable television company that I do. While there have been some changes to our channel line up over the years, at no point have I ever lost channels en masse due to a fight between the cable company and an entertainment media company. This does not seem to be the case for subscribers to the two largest satellite television companies, who seem to get into a major struggle with some entertainment media channel each year.

Indeed, this summer has seen no less than two such fights. The first and the one that perhaps made the most news is between satellite television company Dish Network and media entertainment company AMC Networks. On 1 July 2012 Dish Network dropped the various AMC Networks channels (which include AMC, IFC, WETV, and the Sundance Channel) with the claim that the ratings were too low for the price AMC Networks was asking for their channels. AMC Networks has charged that Dish Network actually dropped its channels because of an unrelated lawsuit that was brought against Dish Network by Voom Networks, a property of AMC Networks' former parent company Rainbow Media Holdings LLC (a lawsuit which some analysts are now urging Dish Network to settle).

This is not the first time that Dish Network has been involved in a carriage dispute. In 2006 Dish Newtork dropped Lifetime Television in a dispute over fees. At the time Lifetime was a very high rated cable channel with a very loyal following. This resulted in outrage on the part of Lifetime's viewers and after a month Dish Network wound up restoring the channel.  In August 2009 Dish Network filed a breach of contract suit against ESPN alleging that ESPN offered a better deal to Comcast and DirecTV. Curiously, in September 2009 Dish Network moved ESPNU from its "America's Top 250" package to its "America's Top 120" package, although they insisted the move had nothing to do with the lawsuit. In just the past few years Dish Network has had fights with the Weather Channel, Fox, and Inspiration Network.

Not surprisingly, from what I have seen many Dish Network subscribers were outraged by Dish Network's decision to drop the AMC Networks channels. I have seen numerous tweets, posts on boards, and posts on social networks criticising the satellite company for doing so. Quite simply, people want to be able to such popular shows on AMC as Mad Men, Breaking Bad, and The Walking Dead. While it is true that one can watch these shows online, it seems most people prefer to watch them on television. Given the amount of venom I have observed directed at Dish Network, then, their claim to have dropped the AMC Networks channels because of low viewership rings a bit false in my ears.

Indeed, I must point out that for the year 2011 AMC ranked #17 in the top 20 highest rated cable channels. This is actually quite impressive when one considers that there are literally hundreds of cable channels in the United States. Now I realise that IFC, WETV, and the Sundance Channel may not be particularly high rated (at least when compared to AMC, TNT, USA, and the like), but I rather suspect that they are higher rated than some of the channels Dish Network does carry.  Angel Two? DIY Network? Daystar? These are some of the channels that Dish Network carries in its most basic package. To get the USA Network, TNT, the History Channel, and other high rated cable channels one would have to get a higher priced package! It seems to me that if Dish Network was truly concerned about channels with low viewership, then they would drop some of these lesser known channels or, at least, they would not offer them in their most basic package.

Now I am not going to say that Dish Network removed the AMC Networks channels because of their lawsuit with Voom (even if it does seem suspicious), but I still have to doubt their motives. I honestly do not believe that Dish Network is concerned with the possibility that in having to carry IFC, WeTV, and the Sundance Channel along with AMC that they might have to pass those costs onto the customer.  I rather suspect it is more the case that Dish Network simply wants to increase its own bottom line by trying to force AMC Networks to ask for less. In others, the carriage dispute between Dish Network and AMC could be less about keep costs for subscribers low than it is about Dish Network's profit margin. Of course, the catch is that if enough Dish Network customers cancel their subscriptions because of the loss of AMC, Dish Network could lose a lot of money in the deal. I know that they may well have lost prospective customers. I know if I was looking to subscribe to a satellite television company, I would not subscribe to one that does not carry AMC. Indeed, I rather like having IFC and the Sundance Channel as well!

While Dish Network has an ongoing carriage dispute with AMC Networks, DirecTV is currently engaged in a carriage dispute with Viacom, who owns such channels as Nickelodeon, TV Land, MTV, VH1, and so on. At the centre of the dispute are an increase in the prices Viacom is asking of DirecTV to carry their channels. According to Derek Chang, vice president in charge of content at DirecTV, Viacom is asking for a 30% increase, an amount that come out to an extra billion dollars. He maintains that such an amount in far in excess of the ratings of Viacom's channels for the past year. Viacom has claimed that the deal is a a fair one and would only amount to a few cents for each subscriber As of last night, around 16 channels owned by Viacom, including Nickelodeon, Comedy Central, MTV, and VH1 were dropped by DirecTV. In response Viacom has pulled much of its online content.

Like Dish Network, DirecTV has had its fair share of carriage disputes over the years. In 2009 DirecTV dropped Versus, with the result that its owner Comcast and DirecTV engaged in an battle of words for several months before reaching an agreement. In 2010 DirecTV dropped G4 (another Comcast channel), citing low viewership. This time the dispute was never resolved and G4 remains unavailable on DirecTV. In late 2011 DirecTV nearly had a carriage dispute with News Corporation. It announced that it might drop such News Corporation channels as FX, National Geographic Channel, Fox Movie Channel, and so on. In this instance the two companies reached an agreement before any channels were dropped.

Now one would think that viewers would be outraged at the loss of Viacom channels on DirecTV. After all, Viacom owns some of the highest rated cable channels in the United States. For the year 2011 Nickelodeon and MTV both ranked in the top twenty highest rated cable channels. Given the ratings of Viacom's various channels, it is perhaps not surprising that I have read news reports about viewer outrage. I have also read of people outraged at Viacom for pulling its online content.

That having been said, unlike the outrage at Dish Network over dropping the AMC Networks channels, I have not personally seen or heard anyone angry at DirecTV over dropping the Viacom channels. In fact, despite the ratings that Nickelodeon and MTV get, the reaction I've gotten from many people is that they don't watch any Viacom channels, at least with any regularity. For myself, I must confess I might watch TV Land once in a great while and more rarely Spike, VH1, or BET, but I do not watch them on a regular basis in the way that I do the USA Network, TNT, or AMC. Not only have I seen many state that they don't watch many of Viacom's channels, I have seen many say that they wouldn't miss the Viacom channels at all.

Indeed, the general consensus I have seen on the various social media networks is that people seem to be siding with DirecTV. The simple fact is that I have observed people express the feeling that Viacom is simply asking too much to be carried on DirecTV. I also have to admit that is my opinion too. I would be willing to pay more for AMC, the USA Network, or Turner Classic Movies (my favourite cable channel of them all), but I would not be willing to pay more for any of the Viacom channels (not even TV Land, which ceased being a classic television channel long ago). In fact, there are some of the Viacom channels I would just as soon not be on my cable channel (the entirety of the MTV Networks except for the VH1 channels). Now I do have to point out that this is hardly a scientific approach The sort of people with whom I associate on social media sites are hardly going to be the types to watch The Jersey Shore. Still, in the end it seems to me that whatever outrage there may be over DirecTV dropping the Viacom channels is not nearly as large as that over Dish Network dropping the AMC Networks channels.

In the end I suppose carriage disputes are inevitable, at least where the major satellite television companies are concerned (if my cable company ever got into a carriage dispute, they must have resolved it swiftly--I don't recall ever losing channels en masse before). That having been said, I think it is important that the satellite television companies and the media companies do not forget the customer. Sadly, I think they may have. Outrage at Dish Network started growing the moment they announced they were dropping AMC, yet they went ahead and did so. While I have not witnessed any outrage at DirecTV dropping the Viacom channels, I am guessing there were many unhappy customers this morning. There also appear to be many who are angry at Viacom for removing their online content. It seems to me in the debates over fees, ratings, and so on, the customer is getting forgotten. This is hardly a good thing. Indeed, I have to wonder that the longer Dish Network goes without AMC and the longer DirecTV goes without the Viacom channels, that they won't lose more and more customers.


VP81955 said...

Just make sure the DirecTV-Viacom dispute is settled before the new season of "Hot In Cleveland" begins. I need my Betty, Wendie, Jane and Valerie!

Terence Towles Canote said...

Well, the good news is that Viacom and DirecTV seem to have resolved their dispute!

Steve Bumgardner said...

Directv has an awesome services on sports packages while
Dish Network is better on entertainment packages. On the other hand they are pretty similar, both are better than cable.
To know more about the between DIRECTV and DISH NETWORK just visit: