Dish Network Chairman Charlie Ergen warned analysts in a conference call today that his company will lose some customers — or have trouble attracting new ones — since it dropped AMC, IFC, WEtv, and Sundance in late June. But he says the decision was a “no-brainer” that will pay off for Dish in the long run. “Our customers are not looking at zombies in New York City”, he said referring to AMC’s hit The Walking Dead. “They live on farms and ranches”. Ergen added that he might have renewed AMC, but bucked at the company’s requirement that Dish also carry the other networks. “There hasn’t been a time when anyone in our family has watched one second of those channels”. He was also dismissive of AMC which has acclaimed series including Mad Men and Breaking Bad. “They’re critically acclaimed but not viewed as much by our audience”, he says. “And our customers can go to iTunes and get Mad Men the same time it’s on. We could pay the entire iTunes bill and it would be cheaper” than carrying the AMC Networks channels. Indeed, Ergen says that by not carrying the AMC channels Dish will be “several dollars cheaper than our competition that’s carrying those channels”.
Ergen says this was a straight-up business calculation, and not — as AMC says — retaliation for the network company’s $2.5B breach of contract suit involving Dish’s decision to drop the VOOM suite of HD channels. Still, he admitted that other factors played a role. He contrasted AMC’s legalistic deal making with “what I call the ‘Godfather approach’. If I do you a favor, one day you might have to do a favor for me”. He says that’s the kind of relationship he has with entrepreneur Mark Cuban whose HDNet channels are in slots formerly held by AMC’s services. As a result, “our margins are going to be positively affected and we’ll do business with people who are fun to do business with”.
The outspoken satellite mogul also warned that other pay TV distributors will take a gimlet-eyed view of the independent programmer. “I don’t think Disney’s vulnerable. But AMC is vulnerable”. In the end, “we weren’t close. And the proof is going to be in the pudding. A year from now you guys will be able to make an analysis and say Dish made a good decision or a bad decision”.