Disputes between small video providers and video content provider AMC Networks (AMCN) are escalating. As Telecompetitor previously reported, small video service providers that get content through the National Cable Television Cooperative (NCTC) are facing the possible loss of programming from AMCN. And as the year-end contract expiration date approaches, the fight is getting nastier.
According to several small video providers and the American Cable Association, AMCN is making unreasonable demands and engaging in inappropriate marketplace tactics. Among other things, AMCN is asking for a 350% increase in programming costs and wants video providers to carry less popular channels in order to get more popular programming, according to TDS Telecom, which like many other small video service providers, gets programming through NCTC. AMCN operates several cable channels, including AMC, the home of the highly popular cable series “The Walking Dead.” Other channels — including BBC America, IFC and WE TV – are considerably less popular.
In a letter to the FCC, video service provider association ACA argued that AMCN engages in “outrageous bargaining practices” and NCTC members “have been subject to unconscionable conduct” by AMCN.
The Cable Contract Dispute
According to ACA, months before its contract with NCTC was set to expire, AMCN started running deceptive messages on the AMC network telling viewers that they would lose the network. To enable these messages to “crawl” across viewers’ screens, AMCN re-tuned NCTC operators’ receivers under a false pretense that they were performing routine maintenance, the ACA said. The re-tuning caused service outages for some operators, according to the ACA.
Additionally ACA accused AMCN of removing cue tones from some operators’ AMCN feeds, thereby preventing the operators or their agents from inserting local advertising into commercial breaks and causing the operators to lose revenue. Despite multiple requests, AMCN has not returned the cue tones, the ACA said.
Other arguments made by the ACA in its letter to the FCC:
- AMCN forced bundling includes demanding that less popular channels appear on widely distributed tiers for all NCTC members. This is particularly problematic for what the ACA called “channel locked” cable systems that are limited in how many channels they can offer because of capacity constraints.
- AMCN is proposing that NCTC members pay twice the rate it is charging other cable operators for the same service.
- AMCN wants NCTC members to pay per-subscriber fees based on the total number of video subscribers instead of the number of subscribers receiving each service, meaning some consumers may pay for services they do not receive.
The ACA asked the FCC to take the information provided into account “in its assessment of the status of competition in the market for the delivery of video programming and of further reforms to its rules governing the video marketplace.”
AMC shared a statement about the negotiations with NCTC with Telecompetitor. “We have extraordinarily high regard for the NCTC and for its members,” the statement said. “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.”
A source close to AMCN said AMCN’s previous contract with the NCTC was based on terms agreed to in 2008 and that AMCN was quite a different programmer at that time. AMCN just wants to bring NCTC members’ costs in line with what other TV providers pay, the source said.
Slamming a Support Center
Some small video providers have made additional complaints about AMCN. Wave Broadband, for example, argues on its website that AMCN is trying to disrupt its business by trying to get as many people as possible to call into the Wave support center at the same time by running commercials aimed at scaring viewers into thinking Wave is about to stop running AMCN programs.
“As you can imagine the result of getting slammed with a ton of calls would be a poor customer experience – most notably long hold times,” notes Wave. “This is especially true for Wave as we do not outsource our call center and instead employ local, friendly people who care about our customers.”
TDS Digs Its Heels In
Contract negotiations between content providers and pay TV providers have grown increasingly hostile and high-profile in recent years, with content providers commonly running ads threatening a loss of programming while service providers reach out to ask customers for support. That’s the scenario that has played out previously for Viacom, leading to some NCTC members dropping Viacom programming when they were unhappy with the terms of a new contract.
According to TDS Telecom, a similar result could play out for AMCN.
In a press release a TDS executive noted that “[w]e are fully prepared to pay a fair price for the AMC programming our customers want, but when huge companies like AMC Networks demand an unprecedented increase in . . . monthly fees, we believe it’s our responsibility to take a stand for our customers.”
TDS also noted that AMCN wanted a 10-year contract instead of the customary 3- to 5-year contract and in a reference to “The Walking Dead,” the TDS executive noted that “TDS cannot accept a 10-year agreement based on the value of one popular program.”
The executive went on to note that TDS is prepared to help customers find new episodes of their favorite shows using other technologies and services such as Amazon, iTunes, Google Play and AMC’s own website, where TV show episodes are often available within 24 hours of initial airing.