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Dish co-founder blames digital distribution for contributing to AMC dispute

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Dish Network's co-founder Charles Ergen commented on the company's contractual dispute with AMC today, stating that it is difficult for the company to justify paying higher license fees for AMC's programming when it has "devalued" its content by offering it online.

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We reported last week that Dish Network is threatening to drop AMC and its related networks from Dish's line-up of programming due to a negotiating dust-up. Dish co-founder and chairman Charles Ergen elaborated on the situation today during the company's financial earnings call, pointing his finger at digital distribution for making original AMC content like "Mad Men" and "Breaking Bad" less valuable. Pointing out that many of its shows are available via online services like Netflix and iTunes, Ergen explained that the easy accessibility has made the programming "devalued" in Dish's eyes: essentially, that there's little reason for Dish to pay a premium for shows when its customers can easily find them elsewhere. Adding insult to injury, Ergen also noted that Dish caters heavily to rural markets — areas where AMC programming isn't very popular aside from a few standout programs. Dish has complained that AMC is asking too high a price to renew its contract with the company, with Ergen adding today that "our customers are not really saying, 'We want to pay more money.' They're saying, 'We want more flexibility in our programming and we don't want to pay more.'"

It's important to remember that statements such as Ergen's are very likely part of the public brinksmanship involved in these type of negotiations — ones that often leave customers as the collateral damage. Still, it's an interesting argument that will no doubt bring additional pressure against networks that are embracing alternative means of distribution. Whether it will be enough to corral content distributors back into the pay-television pen for a little while longer, however, remains to be seen.