January 9, 2018 3 months 1 week ago

Vidéotron drops AMC, saying price is too high (updated)

MONTREAL — Five years after it finally added the American cable channel to its television service, Vidéotron is dropping AMC, refusing to renew its carriage contract. The channel will disappear on February 12.

"Because we operate in a regional and not national market, it's difficult for Vidéotron to meet the many demands and financial requirements of AMC," reads a statement from Vidéotron. "In addition, according to our observations, viewing of AMC dropped over the last year."

(Ed note: If there was ever a time to pull AMC from the lineup, it’s now, as there is no original first-run programming scheduled until The Walking Dead returns next month.)

Carriage negotiations between providers and networks are behind very closed doors, so we don't have details of how much AMC was demanding or what other requirements they had. And because AMC is an American network, the CRTC has no financial data to release about its distribution in Canada. (In the U.S., the number of AMC subscribers dropped from 95 million in 2014 to 91 million in 2016, according to its annual report.)

But clearly AMC Networks has been a difficult negotiation partner for Videotron, who for years had heard from frustrated clients who wanted to watch Mad Men, Breaking Bad and The Waking Dead until Vidéotron finally gave in and added the channel in 2013. Other Canadian BDUs have also struggled with carriage negotiations for the cable channel.

Rather than simply make it another à la carte option, Vidéotron added AMC to popular first-tier anglophone packages, most likely because AMC either demanded a minimum penetration guarantee or had penetration-based rates that were far too high unless there was a large number of subscribers.

In an effort to push toward a pick-and-pay world, the CRTC has made abusive penetration clauses illegal in distribution contracts, but its rules don't apply to foreign services. When it established a television wholesale code in 2015, the Commission said it "expects" foreign services to abide by the code and could step in to resolve any disputes.

Vidéotron says it's confident it can remain competitive despite the loss of AMC, even though its primary competitor Bell has a larger national footprint and more anglophone audience and can more easily swallow AMC's demands. "Vidéotron's priority remains to offer a vast selection of channels that respond to the tastes and needs of a maximum of clients," its statement added. "With more than 336 channels, Vidéotron is very competitive in this sense in the Quebec market."

Update: However, customers with grandfathered packages that used to have AMC will likely be disappointed that there's no replacement channel or automatic discount. "AMC was included in different types of packages," Videotron told Cartt.ca. "The situation is unique for each client." The company will therefore propose "personalized" solutions for each subscriber who contacts customer service. In other words, if subscribers complain or threaten to jump to Bell, they might get a customer retention discount.

AMC Networks did not respond to a request for comment. We will update if we hear back.