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AMC Networks Warns Verizon Customers: You Might Lose Coverage Soon


Just weeks after ending a Dish Network blackout, AMC Networks warns another may be coming on Verizon FiOS.

MINYANVILLE ORIGINAL A month ago, Dish Network (NASDAQ:DISH) resumed carriage of AMC Networks (NASDAQ:AMCX) after dropping it over a legal dispute. Dish Network customers had to go through all of last summer without their favorite AMC programs such as Mad Men, Breaking Bad, and The Walking Dead, and now it looks like Verizon (NYSE:VZ) customers might become the next to go through the same ordeal.

AMC and Verizon FiOS are in negotiations to renew a programming deal originally signed in 2006 and set to expire at the end of the year. Back then, AMC was considered a marginal programmer as hits like Mad Men and Breaking Bad had yet to debut. Now, flush with the success of its original programming, the company is hoping to cash in with contract renewals.

AMC has already launched a campaign to get viewers to pressure Verizon to keep its channels, which include AMC, IFC, and WEtv, with a website that lists the programs that Verizon customers "are about to lose" and offers information on what customers can do.

AMC has also begun running commercials and a crawl on its channels on November 25 that warn that Verizon customers could soon be unable to watch their "favorite Hollywood movies and AMC's award-winning original series," and that they should "make [their] voice[s] heard and act now," by calling the number, 855-8-Keep-On.

In a statement released November 26, the programmer said, "AMC Networks is informing our loyal viewers who are Verizon customers that we are in negotiations. Our discussions are ongoing and we are hopeful to reach an agreement that recognizes the fair value of our networks." Deadline noted that "that sounds like code for: We're far apart on the terms."

On the same day, Verizon, which has some 4.6 million subscribers, issued its rebuttal, saying in a statement, "There is no risk of FiOS TV customers losing AMC imminently, as AMC Networks has incorrectly claimed. This is nothing more than a desperate attempt by AMCN to scare our FiOS TV customers into thinking that they will lose their programming.

"Verizon has a history of working with top programmers to reach mutually beneficial agreements that enable our customers to continue enjoying the best programming on FiOS TV's industry-leading service," continued Verizon, who also tossed in a dig at AMC. "We continue to work hard on behalf of our customers, as we negotiate with AMC Networks to reach an agreement that is reasonable and in our customers' best interest. It is unfortunate that AMCN has decided to unnecessarily publicize these discussions, but not surprising as they have a history of using their viewers as pawns in their negotiations with distributors."

The issue of content providers asking for sharp carriage fee increases in contract negotiations also reared its ugly head recently when DirecTV (NASDAQ:DTV) and Dish refused to meet the demands of Time Warner Cable (NYSE:TWC) for the right to carry the latter's regional sports channel, SportsNet, which screens Los Angeles Lakers games.

That dispute has since been settled. But before the conflicting parties settled terms, DirecTV CEO Mike White told analysts in an earnings call, "I think we're going to continue to see very, very tough discussions by all distributors with content providers, to try and mitigate these outrageous cost increases that are unaffordable to the average customer."

Though it remains unclear if AMC's warning is simply part of its contract renegotiation tactics, it has certainly gotten Verizon subscribers in a panic. At Verizon's FiOS TV online forum, one of several discussion threads on the issue has garnered more than 400 replies, with many users warning that they will cancel their FiOS subscription if Verizon does drop AMC. AMC will also likely get hurt if its channels do get dropped by Verizon: On the day back in June when AMC was dropped by Dish, its stock fell 5%.

While Verizon customers panic, AT&T (NYSE:T) subscribers should rest easy: AMC inked a carriage deal with AT&T's U-verse TV back in July. AMC also signed a carriage extension deal with Suddenlink Communications in March.

(See also: Panic Time for Cable Companies? and L.A. Lakers Blackout: DirecTV Goes to War Against Time Warner Cable.)

Twitter: @sterlingwong
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