
Why Netflix should buy AMC - jevanish
http://jasonevanish.com/2013/09/12/why-netflix-should-buy-amc/
======
billybob255
Sony Pictures Television produced Breaking Bad[1], and Mad Men was produced by
Lionsgate Television [2](who also produced Orange is the New Black). Netflix
doesn't need to buy AMC, they just need to outbid other companies when buying
content. Which is exactly what they did for House of Cards, they beat AMC and
HBO for the rights[3].

[1][http://en.wikipedia.org/wiki/Sony_Pictures_Television#Shows_...](http://en.wikipedia.org/wiki/Sony_Pictures_Television#Shows_produced_and.2For_distributed_by_SPT)

[2]
[http://en.wikipedia.org/wiki/Lionsgate_Television#Production...](http://en.wikipedia.org/wiki/Lionsgate_Television#Productions)

[3]
[http://en.wikipedia.org/wiki/House_of_Cards_%28U.S._TV_serie...](http://en.wikipedia.org/wiki/House_of_Cards_%28U.S._TV_series%29#Conception)

~~~
officemonkey
According to Kevin Spacey, Netflix was the only buyer that didn't want "House
of Cards" to do a pilot, which, when you think of it, would have been an
immense waste of time, talent and money.

~~~
objclxt
Although it's more expensive to do a separate pilot, it's not always a waste
of time or money. In many cases, ideas that _on paper_ are very good don't
translate well. A pilot lets you catch these problems and remedy them. If you
go straight to series you may end up only finding out about these issues when
it's too late to fix them.

A few good examples of this: the (unaired) pilot for BBC's Sherlock is a not
fantastic 60 minutes with significant pacing problems, which was subsequently
reshot and turned into a well received 90 minute miniseries. The US version of
Life on Mars got completed re-located and re-cast as the pilot was just _bad_
(...most people wouldn't call what ended up as 'good', but it was a vast
improvement on the pilot).

Neither approach is without its problems. Take a show like Game of Thrones,
which is very expensive to make. On the one hand, HBO could have saved
millions of dollars by not ordering a pilot. On the other, it was pretty clear
once it came back from post production that the approach the writers had
originally taken wasn't going to work, and a number of changes were made to
make the show more accessible to people who hadn't read the books.

So HBO did 'waste' several million dollars on a pilot that never aired, but
the ability for the creative team to review the pilot before embarking on a
full series commitment meant many changes could be made that resulted in a
better show. HBO have easily recouped the lost money.

It's interesting that Amazon have taken the opposite approach to Netflix, and
ordered a large number of pilots rather than going straight into series
commitments.

~~~
bcrescimanno
For House of Cards, where known commodities like Kevin Spacey and David
Fincher were already attached to a known story (House of Cards is a remake of
a British series from the late 80s) it probably doesn't make sense to do a
pilot.

It'll be interesting to see how it plays out. None of the Netflix originals so
far has done a traditional "pilot" approach and, while I was there at least,
there was no desire to start taking that approach.

The Netflix model is really completely different than traditional TV. Take
Hemlock Grove as an example. Critically panned and considered by most people
in HN circles to be a "bad" show--but (without going into detail) I can
absolutely say it has been VERY successful for Netflix.

~~~
cdash
I have heard this before, and just to inject my own experience while I like
House of Cards it took me awhile to get through it. Hemlock Grove though I
went on a complete binge, every episode that ended I wanted to watch the next
one.

~~~
bcrescimanno
The thing I've heard most often about Hemlock Grove sounds something like
this, "It's really, REALLY bad! Oh man, it was so terrible! I watched the
whole thing in like 2 days and it sucked! I can't wait for Season 2--it's
gonna be terrible!"

(only slightly exaggerated)

~~~
mythz
I found Hemlock Grove interesting, the story progressed really slowly, luckily
Netflix allows all-you-can-eat watching so I end up watching the whole season
in a couple of weeks - where if I had to wait a week in between episodes I
likely wouldn't have bothered. Overall I thought the production quality was
high with good actors/acting and I liked that it had an unusual story-line
even though I don't really like that genre. Will definitely watch next season,
tho there are also better things on Netflix.

------
swanson
Most posts about the future of the "Golden Age" of TV indicate that AMC is
about to drop off the scene entirely. Breaking Bad and Mad Men are titans but
they are on their last legs, Walking Dead has been getting worse and worse.
The new goldenboy on the scene is FX but it seems like they have their own
plans (they recently segmented into two channels, one for comedy and one for
drama).

I am not sure what Netflix gains content wise from buying AMC - they already
have rights to Breaking Bad and Mad Men. Orange is the New Black and House of
Cards both seem to be better received than any of AMC's new programming (Low
Winter Sun is getting skewered by blogs/critics).

I agree that Amazon and Netflix are in the midst of the original content
battle. Netflix is taking the analytical approach, whereas Amazon Studios
seems to be scaling the typical production process to the web (scripts ->
pilot -> pickups).

In the end, I think AMC needs Netflix more than Netflix needs AMC, so I don't
see this kind of acquistion happening. But still a fun article to think about.
Thanks for posting!

PS If you are interested in this kind of meta-TV stuff, check out Andy
Greenwald's stuff on Grantland:
[http://www.grantland.com/contributor/_/name/andy-
greenwald](http://www.grantland.com/contributor/_/name/andy-greenwald)

~~~
fraXis
When you say Walking Dead has been getting "worse and worse" are you referring
to the show itself or the ratings? While the show itself is debatable, the
ratings are not suffering in the least.

‘Walking Dead’ Season 3 Mid-Season Finale Ratings Top 15 Million
[http://screenrant.com/the-walking-dead-
season-3-ratings/](http://screenrant.com/the-walking-dead-season-3-ratings/)

~~~
swanson
I was speaking in terms of quality. I think both can fuel
subscriptions/customer acquistion. Quality leads to "omg you have to watch
this show it is soooo good" and ratings lead to "everyone I know is watching
this, I should give it a try"

~~~
untog
I think you're really overstating the case for Walking Dead being bad, here.
Everyone I know watches it, it's a huge hit. I would agree that it isn't as
good as the first season, but it's still better than most shows. I'll be
watching when it come back.

~~~
georgemcbay
This is all completely anecdotal but the general consensus of the many people
I know who watch it is that season 3 was mostly terrible, and allowing the
Governor to survive the finale was a huge mistake (because the dragging out of
that story, which has long ago worn out its welcome in the tv version of it,
is a bad idea).

Having said all of that, of the people I know who really follow the show on
the creative/biz side are happy that the former show-runner was canned and
replaced with Scott Gimple who wrote a lot of the best episodes.

Personally I'm taking a wait and see approach with the next season. If things
aren't solidly turned around by the middle of the next season, I'm going to
quit watching. I don't want to make the same mistake I did with Lost where I
was so convinced they would fix the problems that presented themselves in
later seasons that I stuck with it to the bitter end.

~~~
themstheones
Whoa now... spoiler alert.

~~~
untog
It was... a while ago now.

~~~
mbreese
I just finished watching my DVR'd copies last week. It would have been a
spoiler for me. Nowadays you can't expect for people to watch something even
within the few weeks surrounding the original airing. I'm sure that makes it
hell for ratings companies.

It would have been nice for a little * spoiler alert *.

~~~
georgemcbay
Sorry. I'd edit it to include one but HN won't let me.

~~~
mbreese
No worries - it's not that big of a deal. But I think you're right that
leaving that character alive at the end of the finale seems messy. I assume
that they'll keep playing out the Governor as an enemy for a while. Or maybe
he'll just come back in after a season or two hiatus... hopefully that.

------
jmduke
The author doesn't seem to understand how the television industry works, which
is okay because it's kind of a cesspool but as a result the article loses a
lot of its force (and this is as someone who's a hopeless AMC devotee and
Netflix addict!)

AMC is perhaps most critically recognized for Breaking Bad and Mad Men, but
they picked up those shows the same way anyone else can (including Netflix) --
by outbidding everyone else for them.

Netflix doesn't need help getting critically/publically lauded programming --
_Orange is the New Black_ was a critical hit, and _House of Cards_ was also
well received. Their opportunities for growth lie in the people who don't
really care about 'critical TV': the vast majority of consumers who have basic
cable, are satisfied by basic cable, and don't pay attention to streaming
services because the value proposition isn't attractive enough.

Put another way -- what if Netflix got into sports broadcasting?

~~~
ameister14
That's exactly what I was thinking; to start, though, what about entering into
the university sports broadcasting field?

If you broadcast every university sport, you'll get a large number of family,
friends and fans of specific teams that are under-served with existing
content. It's not worth the cost of creating a new channel for each, but it
might be doable online.

~~~
jevanish
Interestingly enough, ESPN has been getting into trouble for "hoarding" such
content as they own so much of it in big contracts they can't air all of it,
but it boxes out others from showing it.

------
DanBlake
I really dont agree.

Breaking Bad and Mad Men are ending shortly.

Walking dead seems to be tapering off fans, turning from less of a zombie show
to more of a drama ( each episode is 95% talk, 5% zombies ).

The fact is, both breaking bad and mad men would make the price of AMC
unrealistically high. If Netflix did want to buy them, they should wait until
the season after when both shows are no longer on and get it for a song.

A much more astute purchase would be HBO/Cinemax/Shotime

~~~
dclowd9901
> Walking dead seems to be tapering off fans, turning from less of a zombie
> show to more of a drama ( each episode is 95% talk, 5% zombies ).

I'm sorry to derail, but I am so sick of this being considered as a "problem"
with the show. The show is about human beings facing their inevitable demise.
Even the title "The Walking Dead" is a play on words, referring to the
survivors, rather than the zombies themselves. The show, the novel are both
dramas first, and zombie stories second, where the zombie story is simply a
backdrop to the very human drama of coping with one's own death and the death
of loved ones.

The show has gotten worse, but that's because the characters have gotten more
bland and the scenarios have gotten more tepid. It has nothing to do with
drama:zombie ratio. Would you criticize Breaking Bad because you don't see as
much crack being made in more recent episodes? How fucking stupid.

If this is a major problem to you, then you don't get the show and probably
shouldn't be watching it anyway. I'm sure Fox will cook up some nice, bland,
predictable zombie-loaded crapfest for you in due time.

~~~
Zimahl
_Would you criticize Breaking Bad because you don 't see as much crack being
made in more recent episodes? How fucking stupid._

It's not stupid at all. The meth on _Breaking Bad_ is not the plot, the plot
is cancer-stricken man is pulled into the seedy world of illegal drugs and how
he participates. The plot of _Walking Dead_ is survival in a zombie world. If
you aren't going to focus on conflicts with zombies then they should've just
set it in a post-apocalyptic world sans zombies.

~~~
mbreese
Zombie movies / shows are never about the zombies. They are about how the
survivors navigate that world. They almost always play with the humanity
aspects of it all. What does it take to be truly human? What happens when the
zombies aren't the only bad guys? Etc... Most classic horror stories play with
the line between human and monsters, and that is why the genre has survived as
long as it has [ * ].

It's never about _just_ the zombies.

[ * ] Not counting slasher/gore movies

------
fleitz
From my limited understanding of the industry AMC doesn't actually make the
content, they just buy it.

Having finished Orange is the New Black I think Netflix has the right people
to make decent decisions as to what to buy. It would seem to me to make more
sense to invest directly in the content rather than buying a purchasing team.

------
kbenson
Why buy AMC? Netflix can just bid on the shows themselves, and have them
directly. Or is AMC _itself_ actually making the shows? My understanding is
that there are show companies that make them, but they pitch the show to
networks until they get funding (or maybe even create a bidding war for hot
properties in the business).

------
hapless
Netflix and AMC have very different business models, and Netflix' business
would cannibalize AMC's.

AMC makes a small amount of premium content on a continuous basis, and forces
cable companies to carry a mixture of paid channels and advertising. AMC is
also vastly more profitable, both in terms of P/E ratio (18 vs 300) and gross
earnings (200MM vs 40MM), so it's not as if their "legacy" model is hurting
them.

Netflix makes a small amount of premium content and sells itself as an
alternative to cable, undercutting the traditional AMC model. Their core goal
in making content is just to have a library they don't have to license from
outside. It doesn't have to be current or ongoing, just big.

It's true that both of them rely on premium content as a loss leader but they
have very different ways of earning money and capturing an audience. It would
be hard to reconcile one with the other.

~~~
tptacek
First, a lower P/E also says the market has lower expectations about future
profitability. It doesn't make a whole lot of sense to compare the profits of
a company extracting profits from an existing cash cow to those of a company
in the middle of a market share race. I think AMCX's P/E tells the opposite of
the story you're trying to tell.

Second, AMC doesn't make any content. They fund it via production companies,
just like Netflix.

Third, I don't understand your point about "forcing cable companies to carry a
mixture". Cable companies pay AMCX for the right to carry AMC channels (AMC,
Sundance, IFC, &c); that's a little more than half AMC's revenue. The other
half of AMC's revenue comes from the ad inventory AMC sells on its channel.

These are probably nits, because ultimately your point about incompatible
business models is correct.

~~~
hapless
Cable companies pay for AMC. They are compelled to take IFC and the others as
a condition of showing AMC.

This is how AMCX, the firm, maintains its ad inventory. It doesn't matter if
the content on AMC can't pay for itself as long as the suite of channels in
combination can.

------
zaidrahman
The trio of the shows: Breaking Bad, Mad Men, and The Walking Dead — are
either on their finishing acts, or too close to finish. This time next year,
two of their three flagship shows will be over.

Netflix has a good strategy in their hands. They need to focus on leadership,
creative, and funding daring projects.

Side note: Consider this, Netflix already has _three_ hit shows — House of
Cards, Orange is the New Black, and Arrested Development.

------
ianstallings
But the thing is AMC doesn't make content, producers do. And they go wherever
the money is. They own some hot properties now but look at any premium channel
and you'll see a history of great shows that have eventually gone away. In
fact they could just as easily buy HBO or Showtime and get the same effect,
good existing properties but also a network of existing users that are willing
to pay for content.

I think Netflix should just do way more original content like they already
have:
[http://en.wikipedia.org/wiki/List_of_original_programs_distr...](http://en.wikipedia.org/wiki/List_of_original_programs_distributed_by_Netflix)

------
mds
Reading the headline I thought it was going to be "Netflix should buy AMC
Theaters". That's an interesting thought...

~~~
Macsenour
That was my thought too. No reason to buy AMC the cable channel since it makes
zero content.

Just think, if you could reserve a theater, show some Netflix movie and split
the proceeds.

------
xutopia
This overlooks the reason why AMC has a deal with Netflix. They're in it to
promote the current season of their shows. By having older seasons of Breaking
Bad, TWD, etc... they can easily pick up new viewers of their new ones.

------
gametheoretic
Uh, Netflix has a killer edge within their industry that every other company
in the world wishes they had in their own. They should keep doing exactly what
the fuck they're doing, and not listen to what anybody else thinks. The peanut
gallery has been wrong about them every inch of the way.

But seriously, why on earth would you adopt your losing competitors' business
model when you're the new hotness?

------
joonix
Doesn't make sense. Why would they buy it for $4.5 billion or more when they
have no interest in positioning on cable tv? What they want is content, they
can simply bid for it. If they want their management, the people who select
shows to produce, they can simply pluck those people away.

------
therobot24
The author forgets to mention that buying AMC might be interpreted as
declaring war on other content producers. Sure Netflix has dabbled a bit in
funding productions, but starting to slice into another pie will just make
their core business model more difficult to maintain if misinterpreted.

~~~
sujal
This is probably not a big concern anymore. Almost all the major studios are
in bed with a distributor of some kind. HBO & Time Warner, NBC/Universal and
Comcast, and so on. Disney is the only one I can think of without some cable
arm attached, maybe Viacom? Fox has/had Sky internationally and used to own a
piece of DirecTV, IIRC.

Thus, Netflix wouldn't be an outlier, but part of a broad change/consolidation
happening to the industry.

------
LaSombra
I think this idea the "Why X should/needs to buy Y" is getting tiresome. No
one should/needs to buy anyone else IMHO. I think partnerships are almost
always in theirs and ours best interest.

------
murtali
Why buy AMC when they can just hire the executives who made the calls on those
shows? With a market cap of about $4b, AMC is pretty damn huge. Sure the
content would be included but still hard to justify.

------
sjs382
> While its an unscientific poll, I have found it hard to find anyone I know
> that watches television who doesn’t love at least one of their hits:
> Breaking Bad, Walking Dead, and Mad Men.

One of those shows has only a few episodes left, while another has one season
remaining.

Also, AMC doesn't produce Mad Men or Breaking Bad.

------
brown9-2
The negotiations for the most recent seasons of Breaking Bad and Mad Men were
not because AMC is in financial trouble but rather because they were trying to
be ruthless with not having to pay more money to the creators who know that
they have the best shows in TV, and that AMC really wanted them.

------
albeec13
Curiously missing from this post and most of the subsequent comments is AMC's
Hell On Wheels.

Maybe I'm the only one watching it, but it's one of the better shows on TV, in
my opinion.

------
orbitur
AMC's biggest shows are about to end and they can't seem to create another
hit. Also, as others here have pointed out, AMC doesn't actually make those
shows.

------
jtoeman
literally every single comment here that talks about the quality of AMC shows
is utterly irrelevant to this topic. AMC doesn't OWN _any_ of these shows,
they currently own the CABLE RIGHTS to those shows.

buying AMC is just buying a cable channel and those rights.

NOT a good move for netflix. they could simply start outbidding AMC/others for
quality shows. oh wait, thats exactly what they've been doing....

------
shmerl
I personally don't see Netflix growth as anything good. They are the ones who
push for DRM in HTML. We don't need more of that.

------
znmeb
There's only one reason for Netflix to buy AMC - if they can reduce content
cost by firing a bunch of dead wood in AMC management.

------
npguy
Netflix is also making a huge mistake in its product strategy on the device
front that will probably haunt them forever.

[http://statspotting.com/the-one-mistake-that-might-haunt-
net...](http://statspotting.com/the-one-mistake-that-might-haunt-netflix-
forever/)

~~~
eric_the_read
That post makes no sense. The great that Netflix is available on every
platform known to man is exactly why they are one of the dominant players in
online video streaming. What possible benefit is there to Netflix for all the
expense and hassle required to release a Netflix-branded device, when all they
have to do is port an app, and let someone else take all the risk?

------
Holmes
Buy the production companies not the networks.

