Nobody at Dish Network Chairman Charles Ergen's house has ever watched IFC, Sundance Channel or WE TV, Mr. Ergen said Wednesday as he discussed dropping AMC Networks from the satellite giant's lineup.
"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," Mr. Ergen said during a conference call with analysts.
Dish subscribers haven't been able to watch any AMC channels since July 1, when the contract between the two companies expired. Dish has said that low ratings and AMC shows' availability on video services such as Netflix have devalued the channels. But AMC has suggested that the impasse has more to do with a court battle between the companies dating back to 2008 that involves the now-defunct Voom HD.
Mr. Ergen said negotiations would be easier if Dish could carry AMC alone, but that it has been forced to carry IFC, Sundance and WE as well. Time Warner Cable made a similar complaint during its 48-day impasse with MSG last winter, arguing that it shouldn't have to carry MSG's little-watched sibling Fuse just to get the channel viewers actually want.
"If we just talk about AMC, that 's one kind of the thing, but contractually, we were forced to carry through the other channels," Mr. Ergen said.
Dish has replaced AMC with Mark Cuban's HDNet Movies, which Mr. Ergen argued is just as attractive to its subscribers. "When we analyze the movies that were on AMC, just as an example, and look at HDNet, the majority of the movies are on AMC are also on HDNet, except with HDNet, we had a lower cost structure than AMC materially," Mr. Ergen said on the call.
HDNet also runs movies without commercials, he added. "We know from our consumer feedback that 20 minutes of commercial or 60 minutes commercials are now on movies, it's an awful lot for customers. So, we've actually improved the movie quality."
AMC shows such as "Mad Men," "Breaking Bad" and "The Walking Dead" have won high praise from many viewers and critics, but Mr. Ergen said they aren't necessarily showing the same pull with Dish subscribers as elsewhere.
"We have data, real data from our customers," Mr. Ergen said. "And for whatever reason our customers don't watch some of those ... at the level that we read about in the paper, perhaps because we skew a bit more rural or whatever."
"Short term, we clearly will lose some customers and perhaps in the future there'll be some customers who might want that channel who won't subscribe to our service, but we think that 's more than made up by two factors," Mr. Ergen said. "One is the improved cost structure in terms of not paying for programming that we have available on other channels. And second, on a retail basis, we're several dollars lower than our competition who are carrying those channels."
AMC has been campaigning to get Dish subscribers to speak out against Dish, most recently starting a contest asking subscribers to create videos talking about why they miss AMC. The network previously sent actors dressed as "Walking Dead" zombies to the streets of New York, ultimately creating a video with the tagline, "Zombies don't belong here. Put them back on TV." The clip has gone viral on YouTube.
But Dish customers aren't thinking about zombies stunts in New York City, Mr. Ergen said during the call. "They live in farms and ranches," he said. "They have no clue about zombies and New York."
The standoff between Dish and AMC is only the most recent carriage negotiation to affect consumers. DirecTV and Viacom recently squared off in a retransmission fight that left DirecTV subscribers without MTV , VH1, Nickelodeon and other networks for more than a week.
Mr. Ergen argued that the outcome of that dispute supported his position. Cable and satellite distributors are getting "more powerful," he said, as they realize programming that 's also available digitally isn't worth as much to them.
Hear from Fortune 500 brands that have been forced to pivot as consumer preferences evolve, as well as entrepreneurs building brands from scratch to meet new consumer needs. This event peels apart the layers of brand building with a carefully crafted roster of top marketing, technology, and creative leaders.Learn more