Dish subscribers set to lose "Mad Men"

Actors from the show ''Mad Men'' Jon Hamm (R) and Kiernan Shipka react with January Jones (L) while visiting the New York Stock Exchange to ring the opening bell in New York, March 21, 2012.

(Reuters) - Dish Network Corp, the second-largest U.S. satellite TV company, said it will replace three AMC Networks channels from Saturday following a dispute over higher programming fees.

Dish will replace AMC channels IFC, WE and AMC with HDNet, HDNet Movies and Style channels, leaving its 14 million subscribers blacked out from TV shows such as "Mad Men" and "The Walking Dead".

The company said it notified AMC Networks earlier this year of its decision not to renew its contract due to the channels' high costs compared with relatively low viewership.

AT&T Inc said on Wednesday that AMC is battling it over rate increases that could shut out AT&T TV customers from watching the season premiere of the hit show "Breaking Bad.

AT&T said AMC is demanding "excessive rate increases" to renew its U-verse TV contract.

Dish said AMC Networks has devalued its programming by making some of its popular shows available on the Internet via Apple Inc's iTunes, Netflix Inc and Amazon.com Inc.

"AMC Networks requires us to carry low-rated channels like IFC and WE to access a few popular AMC shows. The math is simple: it's not a good value for our customers," Dave Shull, senior vice president of programming for Dish, said in a statement.

The two companies are also fighting a four-year-old lawsuit.

Dish is being sued in a breach-of-contract lawsuit by AMC Networks, which is seeking $2.5 billion in damages.

Dish shares closed at $27.55 on Thursday on the Nasdaq while AMC shares closed at $36.01.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Sriraj Kalluvila)