A standoff between a consortium of small cable companies and AMC Networks could speed up the death of the cable bundle, sources tell The Post.
The consortium, which represents about 4 million homes, is refusing to pay a demand for what they claim is a tripling of AMC Networks’ fees — and are telling subscribers they can get AMC’s popular “The Walking Dead” through streaming services.
The consortium, called the National Cable TV Co-operative, is tired of skyrocketing fees.
Overall, small cable operator margins on pay TV service are about 10 percent.
Meanwhile, the margin on broadband service is as high as 90 percent, insiders said.
That means some small cable operators, faced with carriage standoffs, aren’t afraid of killing the TV bundle to speed up cord-cutting because broadband TV is more profitable, cable sources tell The Post.
The shift could influence the bigger cable companies, like Comcast, where this year the number of broadband subscribers passed pay-TV customers.
The possible end of the cable bundle is such a hot topic on Wall Street that BTIG analyst Rich Greenfield is chronicling the issue with the Twitter hashtag #goodluckbundle.
The battle between NCTC and AMC Networks includes GCI in Alaska. The group is ready to drop AMC when its deal expires at 12:01 a.m. Jan 1.
There’s also a separate dispute with Spanish-language service Univision.
Albert Fried analyst Rich Tullo estimates AMC Networks is receiving 67 cents per subscriber per month under its NCTC deal.
It is looking for a more common market rate of around $2 to $3 a month, he said.
AMC Networks declined comment on the numbers.
NCTC is standing firm, telling consumers they can watch current episodes of “The Walking Dead” via any number of apps, from Vudu to iTunes to Google Play.
But a single episode could cost consumers anywhere between $2 and $3 while a season pass is $27.50 at the Google Play store or $42.99 on iTunes.
The sixth season of “The Walking Dead” already began and returns to AMC in February after a short hiatus.
Rich Fickle, chief executive of NCTC, allowed that a fee increase is in order as AMC Networks, run by CEO Josh Sapan, now offers five channels, including BBC America, among other services.
But the size of the ask is what’s at stake. The two sides say the talks continue.
“The bundle was great for many years, but it’s under pressure and that’s what’s at stake,” said Fickle, adding that seven big media companies control 90 percent of the costs.
“We’re hitting an inflection point. We’re a leading indicator, the thread on the sweater,” said Fickle, explaining that smaller cable companies have been under greater pressure to eat higher programming costs.
AMC said in a statement: “We have extraordinarily high regard for the NCTC and for its members. We have long supported smaller cable operators, and the particular challenges and considerations that they face in the service of their markets. We will continue to endeavor to do everything we can to make them successful.”