Adding a new wrinkle of complexity to carriage negotiations, AMC Networks is demanding that NCTC member cable companies pay licensing fees based on their total subscriber base, not just the customers who subscribe to AMC channels.
The move is somewhat unprecedented -- popular cable networks like ESPN have long demanded that their channels get carried in the most widely viewed tiers, but programmers have rarely, if ever, called for all of a cable company's subs to pay for their networks, whether they buy them or not.
In a meeting Friday with FCC officials to discuss the matter, National Cable TV Cooperative executives and their constituents described the AMC demand as an attempt to protect itself from "cord shaving" -- i.e. the trend of pay-TV customers dropping to "skinny" programming tiers to save money.
"These demands, which increasingly include no exceptions for the hundreds of small, 'channel-locked' cable systems that are unable to carry additional channels due to capacity constraints, are forcing members to make tough choices in their carriage negotiations: either accept unreasonable prices and terms or drop channels," said American Cable Association President and CEO Matthew Polka in an ex parte filing to the FCC Tuesday.
More than 700 cable systems represented by the NCTC, covering more than 4 million subscribers, are facing a blackout of AMC Networks channels on Dec. 31, with the incumbent carriage agreement expiring last February.
AMC channels include not only the flagship AMC, but also WE tv, IFC and Sundance TV. AMC Networks also negotiates on behalf of BBC America and BBC World News, following its purchase of 50 percent equity in BBC America last year.
In recent years, programming hits including Mad Men, Breaking Bad and The Walking Dead have rendered AMC one of the more popular channels in the pay-TV ecosystem. The latter series remains the most popular scripted show on television, and AMC has recently extended the brand with a spinoff, Fear the Walking Dead.
During the fall, AMC ran a Sunday-night ad campaign in certain NCTC markets during its presentation of The Walking Dead, warning viewers of a possible blackout on their cable system.
Executives from several NCTC cable systems have spoken up about this, calling it a "shameful" attempt to scare viewers.
AMC released the following statment today: "We have extraordinarily high regard for the NCTC and for its members. We have long supported smaller cable operators, and the particular challenges and considerations that they face in the service of their markets. We will continue to endeavor to do everything we can to make them successful."
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