Contract negotiations with AMC stalled
Posted 1 December 2015 12:00 AM by Shentel
Shenandoah Telecommunications Company (Shentel) (NASDAQ: SHEN) has announced it will be forced to drop the suite of cable TV channels owned by AMC Networks on Dec. 31, 2015, unless major changes are made in the proposed contract renewal.
AMC’s contract proposal calls for a rate increase, the carriage of additional channels and the relocation of their less popular channels to a most-watched tier - all of which represents a 379% increase over the term of the contract. AMC Networks include AMC, IFC, Sundance, WE and BBC World and BBC America. Shentel currently carries AMC, WE and IFC and has a separate contract with BBC which does not expire at this time. Shentel plans to reimburse cable customers the cost of the channels being dropped until new programming can be obtained.
“When a programmer like AMC demands an unprecedented increase in its monthly fees, we believe it’s our responsibility to take a stand. We know that the AMC channel itself has popular programming, but outside those programs the content is weak. The secondary channels are not popular and adding them to our lineup could impact our ability to enhance broadband capacity,” said Chris Kyle, Shentel VP of Industry Relations and Regulatory.
“We hold out hope that AMC will modify its proposed contract. There are many other independent cable operators who feel as we do. If nothing changes, however, those channels will go dark in 2016 on Shentel Cable,” said Kyle. He noted that Shentel expects AMC to start posting messaging directed toward customers.
AMC is trying to cash in on the popularity of its show, “The Walking Dead,” which draws strong ratings. However, just because the channel goes dark, that does not mean customers can’t watch their favorite zombie killers. New episodes are available on iTunes, Amazon, Vudu, Google Play, among others.
“Our goal is to protect our customers from significant programming fee increases,” said Kyle. “We pay networks a fee per channel per month per customer for their channels. When these contracts end, we negotiate new agreements and that concludes that business deal. But when huge companies such as AMC Networks demand an unprecedented increase in its monthly fees, we believe it’s our responsibility to take a stand.”