Mounting programming costs have forced the second largest
satellite TV provider,
Dish Network Corp.
), to remove
AMC Networks Inc
) channels from its program list. The company stated that the AMC
Networks' channels will be unavailable following the expiry of its
contract on June 30, 2012.
New York-based AMC Networks, primarily known for its popular TV
shows like "Breaking Bad," "The Walking Dead" and "Mad Men," will
not be available further as Dish has no plans of renewing its
contract with the cable channel operator. Dish also plans to
replace AMC Networks' low rated channels like IFC, WE and AMC with
HDNet Movies, HDNet and Style.
AMC Networks had asked for a huge hike of 300% on its telecast
fees from its current rate of 25 cents per channel, and this was
also a reason for the non-renewal of the contract. Moreover, most
of the popular shows of AMC Networks can be easily accessed through
), hence reducing the popularity of these shows to Dish's
In recent times, most cable and satellite TV service providers
Time Warner Cable
) have been continuously increasing their fees in order to mitigate
their rising programming expenses. However, Dish remains the only
company to avoid any increase in fees, thereby making its service
offerings more competitive than its peers.
Apart from increasing their broadband service prices, the cable
companies are also diversifying their business to further mitigate
the content expenses. However, Dish lacks the capacity to offset
its programming expenses due to the unavailability of other
business platform under its portfolio. So it is to be seen how long
Dish can survive the mounting pressure of increasing content cost
without passing it onto its subscribers.
Currently, Dish Network has a Zacks #3 Rank, implying a
short-term Hold rating on the stock. We are also maintaining our
long-term Neutral recommendation on the company's shares.
AMC NETWORKS- A (AMCX): Free Stock Analysis
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