Author Topic: AMCX - AMC Networks  (Read 6481 times)


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Re: AMCX - AMC Networks
« Reply #10 on: May 12, 2014, 05:37:29 AM »
Actually, it seems to me that content distribution is a better business than content generation. Running a film studio is a tough business - the actors are expensive, hard to retain, movies may flop etc. Likewise with sports, ESPN does not really create the content - the sports team and leagues create the content, although ESPN does shape it via production and commentaries. But for the most part, ESPN is just a heavily branded content distributor. The sports leagues could decide to go elsewhere, if they wanted to, so I don't think it's all that different from AMCX. However likewise, the sports teams itself are mostly a crappy business but ESPN if course is a great business.
Discovery does more and more scripted stuff and has evolved more into a mainstream channel. If you look at original programming, probably the channels from SNI (Scripps - Travel and Food network come closest to being a wholly owned model).

The content distribution business is the one that needs little capital, has less risk (they just cancel shows that don't work) and high ROIC. They need some control over the content and they need competency to select the right content for their audience, but I don't think there is too much benefit in owning all off their content (unless it can be produced cheaper internally). They just buy the content, mark it up, and collect an annuity stream of cable fees as well as advertising $. At least for the time being, that appears to be the sweet spot in the entertaining business.

I would say that definitely isn't true. There are a whole host of more complicated reasons about basic v. premium cable, the strategies that various companies are taking, and the impact of new technologies...I don't think it is worthwhile going into them but it is worth recognizing that, in addition to the points I am going to make, they exist.

Okay, so the best case scenario for AMC is that they pick something that works. Great, they make lots of money and MVPDs include them in their basic line-up. Then they go back to the producer and say they want another series. You seem to suggest that the producer doesn't then go "I want double what you paid last time" or that the cast/staff/writers/directors don't go "Pay me more too". The point is that the upside when you don't own content is very limited. It isn't like you can dramatically increase your subs, you are basic cable. You can improve your penetration of MVPDs a bit and increase retrans but you are basic cable so this avenue is very limited. More to the point, you are just left in the same position a few years down the line when retrans comes up again and you have to replicate your success. You have to run faster and faster to stay still. HBO is successful because it avoided this, MVPDs want HBO, customers want HBO. I can't remember the exact numbers but a significant proportion of subscribers take premium channels. No-one signs up for cable because of AMC and it makes MVPDs very little money. There is a reason why Starz is premium and trying to replicate HBO.

Now it is also true that the downside is very limited too, they are just a basic cable channel and MVPDs aren't expecting much. You seem to confuse AMC with a producer though, when things go wrong they can't cancel. They have paid a certain amount of dollars for the program and they can't just return it and say the show wasn't popular we want our money back. They also don't have any inventory to fill the slot that opens up. It is true though that the downside is limited, MVPDs will keep taking your channel regardless but the problem (again) is that no-one needs you and you have no negotiating leverage with anyone (see the carriage dispute with Dish a few years ago). Customers aren't paying up for AMC so it doesn't make MVPDs money and basic cable is the first place that MVPDs go to cut when costs increase (as they are). Also, basic lineups are very vulnerable to pressure from the big content places pushing their basic and premium channels. Again, this is why Starz is doing what it is doing, why HBO is successful, and why ESPN isn't like all, they might as well be in different industries. More to the point, that is why AMC owns Walking Dead. Your argument is based on a view that even the company itself clearly doesn't hold, it knows it is in a very weak position. Even Starz which has popular content thinks the industry is difficult so you can imagine the position AMC is in.


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Re: AMCX - AMC Networks
« Reply #11 on: May 12, 2014, 06:12:56 AM »
shows like breaking bad and walking dead were first pitched to HBO, but they thought it wouldnt work out. So obviously AMC was in a good bargaining position. But now that tv shows are basicly in a red hot golden age, it seems a guy with an idea has more leverage now. True detective for example was a pretty big risk.

Now they are making a show called better called saul I think about that lawyer guy from breaking bad. Obviously everyone involved has leverage now, and AMC will make less money on it. So basicly they will have to keep getting rejected talent from HBO (because HBO is really the leader here) to make good profits. And that will probably become harder in the future because now you have Netflix, maybe amazon prime and maybe other tv channels who are willing to take more creative risk driving up the price. Where as it was first probably only HBO and maybe one other. I think that guy who created the wire worked on a low budget and didnt get paid much. But now he can easily go to other content providers if they are underpaying him now that he proved his talent.

It is also interesting that the X files for example is very different from the shows you have now. Every episode is like a mini movie, and that has less apeal. That was because it was harder to catch up on missed episodes back then. A show like breaking bad would never get through in the 90's or early 2000's.

Another problem is that now movie stars who are already famous are interested in TV. In the old days TV was something if only you couldnt do movies anymore. So game theory now dictates that you better have some (expensive) movie stars in your next show if you want viewers with all the increased amount of talented writers and channels competing for viewers.

Good example is woody harrelson and that other shirtless guy. They would never do a tv show 15 years back.

Just my 2 cents :)


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Re: AMCX - AMC Networks
« Reply #12 on: February 08, 2019, 08:11:24 AM »

UUnder pressure from Netflix and Amazon, the entertainment industry is slowly consolidating. But one of the smallest of the publicly traded entertainment firms, AMC Networks, is resisting the trend. And in an interview, AMC CEO Josh Sapan warns that some of the big deals underway may prove to be more challenging than anticipated and may need to be undone.

I think there has been a rush at the moment toward big, and I think there is a default notion that big covers sins and that big provides insurance, he said. I dont believe that to be the case, and sometimes big in the past worked, but notably it hasnt worked and has had to be deconstructed. He cited cultural differences as among the problems that big mergers sometimes encounter.


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Re: AMCX - AMC Networks
« Reply #13 on: February 08, 2019, 09:07:16 AM »
He's obviously talking up his position but I'm not sure I buy the argument.  Making these small, surgical deals is fine when you have massive hit shows like Walking Dead (which is 25% of their ad revenue??!!) but hit shows are becoming more expensive, harder to promote and you're up against more competition - Amazon, Netflix, HBO, Starz, etc. etc   The one year they don't have a "must have" show, they better hope they aren't up for a carriage negotiation with Comcast or Charter.  With few other channels to package in the deal they are at the mercy of big hits.   For other cable content channels like a Discovery, even if one channel is suffering another is in ascendance and you package them up.  It's still cheap right now but unless there's another Mad Men, Walking Dead or similar about to emerge this could be difficult in 2-3 years.