AMC Breaking Bad News for DISH -- but It's Great for Investors


Take heed, DISH Network (NAS: DISH) investors: AMC Networks (NAS: AMCX) won't be bullied.

Today, the channel will stream -- live -- the premiere of the hit show Breaking Bad to any DISH customer who wants access. AMC also says it will give customers an extra week to "switch providers" in order to get access to its programming.

Bold move. And very, very smart.

AMC and DISH have engaged in a very public battle over financial terms for keeping AMC's channels on DISH's satellite network. AMC wants higher distribution fees; DISH says AMC's ratings don't justify a premium. DirecTV (NYS: DTV) and Viacom (NYS: VIA.B) are embroiled in a similar fight.

To be fair, AMC also says DISH's blackout, which began on July 1, stems from a 2008 lawsuit over the satellite provider's decision to drop an AMC subsidiary from its programming menu. DISH denies that the suit is in any way related to current negotiations.

For investors, what's behind the brouhaha is immaterial. What matters is that AMC is fighting back using the Internet and in the process taking us all a step closer toward transforming television into the very on-demand experience research says we want it to be.

DISH, meanwhile, is left trying to figure out how to justify its own brand of premium pricing for providing channels we don't watch and services we don't use. This form of "bundling," as it's known, is like profit protection for distributors under assault from streaming alternatives.

And that's what makes this power play so interesting. By becoming its own distributor in this one instance, AMC is disrupting the very core of DISH's value proposition. Will that bring executives back to the negotiating table? Maybe. But even if it doesn't, this, right here, should go down as the moment that Hollywood rethought TV distribution.

Or, to put it in terms Breaking Bad fans will appreciate: AMC, not DISH, is the one that knocks.

Stream on
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