hen AMC's zombie drama The Walking Dead earned record ratings for the premiere episode of its zealously anticipated third season last week, it was without the aid of Dish Network's 14 million subscribers, who have spent the past few months in the crossfire of a fiercely fought lawsuit between Dish and AMC. But Sunday brought good news for Dish subscribers who double as zombie fans: The companies have finally come to an agreement. Dish will pay $700 million to AMC and Cablevision, and AMC Networks will put its many channels back on Dish. So: What was the disagreement about in the first place? What did each side gain and lose? Here's what you should know:
How did all this start?
The dispute began several years ago when Dish dropped AMC's now-defunct Voom HD network. Cablevision, which used to own AMC, sued Dish for some $2.5 billion in 2008. Then, in July of this year, Dish dropped AMC altogether, complaining that its channels were too expensive — and the ratings too low — to justify their premium cost. AMC countered by arguing that Dish was attempting to gain leverage in the Voom HD lawsuit, and subsequently launched a massive ad campaign encouraging its viewers to petition Dish to cut a deal.
What did the lawsuit mean for viewers?
A lot. For almost four months, Dish's 14 million subscribers have been unable to watch any AMC-owned channels, including AMC, IFC, Sundance, and WE tv. AMC itself hosts some of the most highly-acclaimed series on television, including Mad Men, The Walking Dead, and Breaking Bad. During the blackout, the latter series launched eight new episodes that were unavailable to Dish viewers (though they could be purchased individually on iTunes). AMC reported that the blackout affected 13 percent of its total subscriber base.
Whose fault was the blackout?
"It's easy to play the blame game," but fault can't easily be attributed to just one side, says Paul Tassi at TV Overmind. "Was Dish being cheap, not wanting to shell out to keep AMC on their lineup? Or was AMC being greedy, demanding too much to air their programming?" In many ways, we don't know the answers to those questions, as beyond the $700 million settlement, any rate changes built into this deal have not been publicly disclosed.
Did the blackout hurt Dish?
Apparently it did not. Programmers like AMC, who license content to broadcasters like Dish, "have typically held most of the leverage when negotiating new affiliate agreements," says Daniel Frankel at The Atlantic Wire. But subscribers exerted "little pressure on Dish" to cut a deal, which is part of the reason it dragged on for so many months.
Did the blackout hurt AMC?
It's tough to say. Breaking Bad's ratings went down 21 percent after the Dish blackout, though iTunes sales remained strong. In general, the number of total subscribers are particularly important to networks like AMC because they help advertisers determine how much to pay for commercials, which may have had an impact on overall revenue. Still, last week's season premiere of The Walking Dead earned better ratings in the adult demographic than any other entertainment series this fall — and that was without Dish's 14 million subscribers, arguably proving that AMC could thrive without Dish.
Now that it's over, who won?
This deal is "good for both companies," says analyst Michael Morris at The Hollywood Reporter. For AMC, "the return to Dish should only support further ratings improvements in the coming months and year." But Dish wins in that the $700 million payout is far below $2.5 billion originally sought by AMC in the lawsuit. The clearest winner? Dish subscribers, who can finally watch some of the most acclaimed series on television again.
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