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AMC is succeeding by breaking the rules of legacy television
- gfunk911 13y agoSo they broke the rules by doing exactly what HBO did. It's a good plan but not a novel one.
- autarch 13y agoDid you read the article? They're talking about how AMC releases their content on iTunes, Amazon, and Netflix sooner than other networks. It's hardly exactly what HBO does.
- gfunk911 13y agoI did read the article. You make a good point about online distribution. No need for the derisive tone, let your content speak for itself.
- LanceH 13y agoThey also seem to keep the new seasons a secret. I missed the new Breaking Bad and missed most of The Killing this season (too late to even catch up online). I'm at the point now where I'll just wait a couple years to catch it on Netflix.
- cruise02 13y agoAMC makes their shows available for streaming on Netflix faster than any other network that I'm aware of. All past seasons of Breaking Bad are available already. They usually make each season available for streaming soon after the DVD release, and before the next season airs on TV.
- MSM 13y agoWhile we're doling out "Did you read the article" comments, the article also mentions that HBO is in a league of their own when it comes to distribution. They have their own streaming network (HBO GO) and new espidoes are released immediately. I think HBO definitely had a strong hand in pioneering AMC's current model.
- pauldino 13y agoHBO seems to have a very different approach to online distribution though - HBO GO only works if you already have an HBO subscription through a traditional television provider, and if the last season of Game of Thrones is any indication they don't put their shows on iTunes and Amazon until long after they air.
- smacktoward 13y agoIt's a riskier approach, because in order for it to work they have to get their app in all the same channels and devices that Netflix, Hulu, et al have already gotten into. And they have to train viewers to look there for HBO content instead of in their usual outlets. All of which is challenging. But it's also potentially more lucrative as well, since if it works HBO won't have a middleman sitting between themselves and their viewers the way they currently do with cable companies and streaming services. And if HBO GO has enough compelling original content to get people to use it, they can then use that as leverage with movie studios for better deals on movies to distribute that way as well.
- michaelochurch 13y agoThere's something fundamental that's changing in business. Profit = Revenue - Cost (That's not what's changing, of course.) This admits two strategies: increase revenue, or cut cost. What's changing? Traditional MBA-style business is about cost reduction. Provide some static service, drive costs to zero or as close as you can get it, and hope like hell you're better at this than any of the other players. That's rapidly becoming obsolete. Everything becomes a commodity, under this view. "We need 24 hours of programming. Get it together." Excellence (which might increase revenue faster than cost, but goes against every principle of cost-cutting) gets killed off. It's not important. Also, excellence is a bitchy problem from an MBA (polymorphic management) viewpoint because you actually need to know something fairly deep about the work and the problem domain to achieve it; whereas executive-level cost-cutting is a skill that can be applied (if to mediocre results) anywhere. AMC has been taking the other tack: a long-term revenue-oriented approach that seems to be working quite well. Why? If you're in an oligopoly providing a commodity product or service, cost reduction often spells the difference between survival and failure. However, in this "long tail" world where there are hundreds of players competing for visibility, what you have instead is a world where almost no one gets a large proportional "slice of the pie", but the pie's much bigger. The payoff curve (between investment/quality and results) becomes convex and that favors risk, but it also favors let's-do-this excellence instead of traditional MBA-style cost-cutting.
- cremnob 13y agoWhy are you calling it MBA-style?
- adamio 13y agoI think the change in this business is distribution, not necessarily cost vs revenue. Surely MBAs are running AMC as well. Revenue/Cost ratio is perhaps is more important - wider digital distribution leads to increased revenue over a fixed cost
- Shivetya 13y agoI am pretty sure a MBA told them they were doomed if they stayed the way they were. What happened next is very much typical business. They got lucky. One good hit and they were off and running. Now what they have to avoid is the SyFy debacle of turning into cheese. Sadly they have started reality TV shows and that seems to be a staple of far too many channels. They could have equally floundered in their choice of scripted shows. The difference is that compared to network TV they don't have a dearth of "original" programming to fall back on and hide the fails
- jstalin 13y agoI cut the cable about three years ago and I just subscribe to Amazon Prime, Netflix, and Hulu. I'm also happy to spend $1.87 per episode for Breaking Bad. I don't miss cable one bit.
- Amadou 13y agoI'm also happy to spend $1.87 per episode for Breaking Bad Compared to what they earn from regular viewers - subscription fees and commercials - that pricing is nuts.
- bryanlarsen 13y agoAccording to the article, they make about 0.35 cents per month from subscribers. Given 13 episodes per year, and a 30% commission that's $4.20 vs $17. I suspect that much less than 25% of AMC subscribers watch Breaking Bad given how bundling works so it can be argued that they're making more money from subscribers than from people buying on iTunes.
- axelf 13y agoyou're not factoring in the advertising money they're missing out on with digital downloads.
- bryanlarsen 13y agoThe article mentions subscription revenue is substantially larger than advertising revenue.
- Amadou 13y ago13 episodes is 3 months. So that $4.20 is really closer to $1. Bump it to $1.50 as a generous amount for advertising. Apply your 25% modifier and you are still at $5/season or 38c/episode.
- betenoire 13y agoNuts? For being high or low?
- Pwntastic 13y agoSo the link points to the qz homepage and not the actual article? http://qz.com/114483/amc-is-succeeding-by-breaking-the-rules-of-legacy-television/ http://qz.com/114483/amc-is-succeeding-by-breaking-the-rules...
- TylerE 13y agoI wonder when the movie industry will have a pioneer along these same lines. It's an idea I've had for a while... produce movies on a moderate budget... with as many talented screenwriters as there are, there have to be good scripts that go unoptioned. Cast talented character and stage actors instead of big name (big $$) star talent, and quitely make a bunch of really good movies for not a ton of money (Think $15-20 million budgets). The idea is to have a deep catalog that quitely does well, instead of trying for massive blockbusters that can be $200m losses if they bomb. There are certainly some filmmakers that sort of take this approach (The Coen brothers, for instance), but I don't know of any studio that has taken the approach to heart. I'm not talking indie studios here, but full AAA productions, just not with big VFX budgets or $50 million cast members.
- danko 13y agoI think the issue here is with the marketing costs necessary to actually get people into theaters. It's so difficult to actually convince folks to get out of their homes for filmed entertainment that it generally takes a $50-$80 MM marketing budget for a film to do _any_ kind of business at the box office. This ruins the economics of the 'mid-sized' film, since if you have to tack on $60 MM of marketing onto the production budget anyway, even the smaller films generally have a high level of risk. Thus the whole market has bifurcated between enormous $200 MM behemoths and $2 MM indie movies with limited theatrical distribution trying to promote themselves virally.
- k-mcgrady 13y agoHow important is it to get into theatres? I'd imagine doing a deal with Netflix that says they have exclusivity for x months but it can still be shown in a limited number of theatres. The promotion Netflix would do (top of the page on netflix.com as well as the press it would generate) might offset the limited marketing budget you have available and get people who want the full experience to watch it in the theatre.
- MartinCron 13y agoIt's probably important to get it into theatres because there still exists a stigma that direct-to-video features are inferior to theatrical features.
- osi 13y agothis strategy is starting to smell like double-dipping. the networks charge the cable company an increasing cost per subscriber that subscriber's can't opt out of. (cable bill just goes up), and on top of that, run ads. either be like HBO and be an optional premium channel with no ads, or stop making my cable bill go up to subsidize crap i don't watch.
- warfangle 13y agoCable pays HBO a cost per subscriber on top of what the subscriber pays to HBO.
- mason55 13y ago> either be like HBO and be an optional premium channel with no ads, or stop making my cable bill go up to subsidize crap i don't watch Here's the thing. Your idea of "what I don't watch" and someone else's idea of "what I don't watch" are going to be vastly different. By eliminating bundling (the practice of forcing cable companies to carry secondary channels to get access to the primary ones) you'll force a race back to the bottom in terms of content. It will be like the old days of the OTA networks where you have to appeal to the most people to survive. Things like Science and the Military channel almost certainly would not survive in an a la carte world. Without a subsidy the cost of programming will be too high and ratings too low to be fully supported by advertising.
- pbhjpbhj 13y ago>Things like Science and the Military channel almost certainly would not survive in an a la carte world. // This is kinda crazy; but I'm willing to suspend disbelief. People who want to watch the station won't pay as much as the company can make from advertising to people (on that station) who primarily don't want to watch the station? If I make shows on two channels, A and B. Then sell access to those channels forcing the carrier to take A+B when they only want A. Aren't I just charging more for A - which gets paid - but needlessly filling B with programming? Is this just so cable companies can offer "100 stations" as a headline in their advertising?
- steauengeglase 13y ago"Pressing still further, AMC is giving new Breaking Bad episodes to Netflix viewers in the United Kingdom right after they air in the US, instead of the weeks-to-months delay that is typical for exporting top-flight US shows." This. It blows my mind that in this era if your content doesn't require localization efforts why it isn't made universally available ASAP. Cult followers run off to news site and message boards and twitter and where ever else to talk about their favorite show and that gets more people interested. Not making it available spoils all of that momentum and waiting months is just shooting yourself in the foot. I'm looking at you BBC/PBS-Masterpiece joints.
- k-mcgrady 13y agoThe reason it's being given to Netflix in the UK is because no networks here have paid for it. It was either that of let people download it illegally (as it's the last 8 episodes I'm sure most people would have done this).
- forrestthewoods 13y agoReally? AMC makes 33 cents per month per cable subscriber. As of December 2012 AMC was making $30 million dollars a month off of an 80 million subscriber base [1]. They get that money because their product is in such high demand the relatively small number of viewers demands their cable providers include AMC. If they suddenly start giving away their content for next to free those demands go away and so does the revenue stream. It rarely makes sense to give away new content on Netflix for next to free. You see it happen, but only rarely and in very select circumstances. [1] http://www.nytimes.com/2012/12/09/magazine/the-mad-men-economic-miracle.html http://www.nytimes.com/2012/12/09/magazine/the-mad-men-econo...
- warfangle 13y agoAre you saying that netflix doesn't pay AMC per stream?
- forrestthewoods 13y agoI'm saying that the number Netflix pays per stream is so small it might as well round down to zero. If just getting users to watch your show on Netflix was a great way to make money then everyone would be putting their new shows on Netflix. Almost no one does that. Instead everyone puts old seasons of their shows on Netflix in hopes that consumers will then watch the new season on subscription cable or buy the show direct off iTunes. Content holders effectively give away old content so they can sell new content. If they give away new content there is nothing left to sell.
- consultant23522 13y agoIn a world where network television has moved to unscripted reality shows filled with B actors trying to "make it" a good quality, well produced, well scripted show with talented actors is going to be a gold mine. The real issue is that network TV never really recovered from the writer's strike. AMC just came along and started offering the type of quality shows that were previously available on the network channels.
- VLM 13y agoI think its simpler than that. Network TV can't show a boob on a football halftime show without 0.001% of the population howling like morons and the network and government of course caving into them. Its the culture everyone knows they're supposed to want, but don't actually want. They're pigeonholed into a sorta G-PG ish range no more or less. HBO shows you can produce regular TV drama (Sopranos, etc) at an R rated level and be incredibly profitable, well, at least as long as there's practically no competition. Hmmm. Whats between G/PG and R that could be popular... PG-13! So that's how you get gory zombie blood splatter and meth cooking on a TV show, and its a profitable sweet spot. All this discussion about people really liking AMC because they put episodes on netflix is nonsense. They like AMC because "regular TV" isn't obscene enough and HBO is a bit too obscene. Or risque, or "adult" (I hate that characterization). They simply are better targeted to their audience. Netflix has no shortage of goofy failed major network sitcoms / cop / lawyer / doctor dramas, and no shortage of gore and sex series/movies, so its not merely being on netflix that makes AMC beat the others.
- cheald 13y agoBreaking Bad is laced with way more profanity and graphic violence than you could swing for a PG-13 rating. It's not True Blood, but then, The Matrix and Blade are two R-rated movies with vastly different severity of content.
- mortenjorck 13y agoThe language is still oddly MPAA-centric. The writing is so outstanding it's hardly something to notice, yet the characters never say "fuck" apart from once or twice, where it was probably censored on basic cable (pretty sure the most recent instance I saw was even distorted on Netflix). Contrast that with a motherfuckin' HBO show where you can't go a fuckin' minute without a few fucks thrown in for good fuckin' measure.
- RyanMcGreal 13y agoSidenote: it looks like the people behind qz.com fixed the 'feature' whereby scrolling up past the top of an article would replace it with the previous article. This has made reading articles on that site less aggravating.
- tharris0101 13y agoWith Mad Men and Breaking Bad winding down, I wonder if AMC can maintain it. They seem to have garnered the reputation of being hard on showrunners (Both Matthew Weiner and Vince Gilligan have had issues with the network). Walking Dead is on it's third showrunner. Another network, FX, seems to be trying the HBO/AMC model in getting quality programming and is going out of their way to appear showrunner friendly. It'll be interesting to see if they can capitalize on some of AMC's missteps in nickel-and-diming their own shows.
- colmvp 13y agoYou pretty much wrote what I was going to say. AMC hit it's Golden Age of TV programming with that trio, but clearly have shown that they have issues with the handling of heavy creative talent, what with the issues that Weiner and Gilligan have publicly had, and the volatility of the showrunner position on the Walking Dead. (which subsequently also resulted in one of the actors leaving the show). On top of that, they expanded the number of episodes of S4 while reducing the budget per episode. And of course, milked the coverage of these shows with vacuous Talking Bad/Talking Dead. I wouldn't be surprised if talented writers avoided that network like the plague.
- mjolk 13y ago>which subsequently also resulted in one of the actors leaving the show Which actor is this?
- insteadof 13y agoJon Bernthal. Whose character was already outliving what the creators were planning.
- jcampbell1 13y agoAMC is also in a tough spot. They don't have the revenue to support the creative folks properly. The long lag between great content and an increase in the affiliate fee, makes the financials tricky. The death of DVD sales is not helping much either, as there is less to promise on the backend. I think AMC gets $.35 per subscriber compared to ~$5 for ESPN. It is going take decades of hit shows before AMC is paid the $1-2 they actually deserve.
- logn 13y ago$.35 ? Can AMC sell direct to the customer? I'd even pay double that, $.70.
- cheald 13y agoAssuming that they have fixed costs, do you honestly think that they would retain half or more of their current subscriber base without being bundled with cable packages? Until Breaking Bad and Mad Men, nobody - nobody - cared about AMC. They were that crappy high-40s channel that you flipped through on your way to interesting stuff. Take into consideration the fact that Mad Men and Breaking Bad - AMCs two crown jewels - are about to wrap up. Also consider that they're subsidized by the tens of millions of people who subscribe to basic cable but don't care about their content.
- thehme 13y agoI will now have to find the time to watch these "quality" shows to see if in fact they are quality programming. It would be great to be able to tell TV networks that they should focus on creating quality programming, instead of just getting the best advertizement deal and that this would boost their ratings/revenue. While I cannot think of any great TV shows, there have definitely been exceptions, like The West Wing, which I didn't watch live, but I'm now watching on NetFlix and can certainly say that the show is of very high quality. The West Wing has set the bar for what I qualify as quality programming, so if AMC's programming is there, no wonder they are doing so well.
- driverdan 13y agoWait until after the first or second season is over until you start watching like I do. By then you'll be hearing which shows are good and can easily catch up on Netflix or Amazon/iTunes.
- L_Rahman 13y agoIf the West Wing is your current high bar for high quality programming you're in for an absolute treat. The West Wing was the last great show put out by the major broadcast networks before the rise of cable and the it pales in comparison to the output what has been dubbed "The Golden Age of Television". It's actually an embarrassment of riches right now on the television front.
- thehme 13y agoWow. I am stunned! Never been too much of a tv show watcher, but your comment really makes me think if I have chosen wisely. I don't have much time to waste ("spend").
- login1234 13y agoIgnore all qz articles because it's infuriating to read on a mobile device. How you break scrolling and alienate users should be an award.
- zw123456 13y agoSo many really good points made here in the comments. My two cents, I really really hope that GOOD WRITING some how wins the day. AMC shows like Mad Men, Breaking Bad, Hell on Wheels, etc. are really well written in my humble option, compared to the "reality shows" that are staged/sort of written ugh, whatever. I hope that other networks see what HBO and AMC are doing and realize there is a market for good writing. Quality story, quality production, I will watch, otherwise, I can just surf hackernews or do something else on the internet.