AMC Networks CEO: Digital Content Deals Benefit Pay TV System

AMC Networks CEO Josh Sapan told Wall Street analysts on Thursday that a carriage dispute with satellite TV firm Dish Network "may have a material impact" on his company's financials if Dish goes ahead with a plan to drop AMC's channels. And he suggested that contrary to some views, carefully crafted digital distribution deals with the likes of Netflix and Amazon.com can actually drive viewership and benefit the broader pay TV industry.

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Sapan said AMC Networks has struck its digital deals in an "extremely careful" way with content going on digital platforms at least a year after airing on TV. That "seems to make sense" and not hurt traditional TV so far, he said. He added that he in fact sees signs of a "slightly virtuous cycle." DIgital deals seem to "in fact even [be] driving [the pay TV eco-system] a good bit," he said.

The question of whether digital content availability affects TV ratings has come up repeatedly this earnings season, most prominently in the case of Viacom's Nickelodeon, which has seen strong ratings declines.

On AMC Networks' first-quarter earnings conference call, he said the financial effect of the Dish deal will depend on the length of a possible interruption in carriage.

Sapan said the Dish threat is not due to ratings trends or other operational considerations, but tied to long-running litigation between the two companies related to the former Voom HD channels business.

As Dish has been under pressure in the legal case and things have "taken a turn for the worse" for the company," its threat to drop AMC Networks' channels is "a direct result of the litigation," Sapan said. Dish is "not acting in the best interest of its subscribers," he added.

AMC Networks includes AMC, home of hit shows Mad Men and The Walking Dead, IFC, Sundance Channel and WE tv.

Asked by an analyst if Sapan feels the company's networks, which have done well with original programs, are must-carry channels, the CEO said he feels that AMC is "among the most critical services you need to succeed" as a pay TV operator.

Dish has said its decision to go without AMC Networks is simply tied to viewership in its households and the availability of content on digital platforms. "Our decision to drop AMC Networks’ channels is solely dependent on their high renewal cost when compared to their low viewership. Dish will make alternative high-value channels available to our customers as replacements,” the company had said.

AMC Networks management said Thursday that its rising ratings trends should also be reflected in Dish homes.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai