
AMC is succeeding by breaking the rules of legacy television - boh
http://qz.com/114483/amc-is-succeeding-by-breaking-the-rules-of-legacy-television/
======
tharris0101
With 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
You 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.

~~~
jcampbell1
AMC 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.

~~~
latj
Hopefully eventually its a la carte. I'd pay $2/mo for AMC. I dont need the
ESPN. The problem though is there sister channels. IFC is good but I could
leave the rest.

~~~
s_q_b
My bet is that TV-over-IP eats the market before de-bundling occurs. In terms
of cost, distribution, quality, and ease-of-use, digital downloads beat cable
every time. The only piece of the puzzle networks still own is content
production. With House Of Cards and Arrested Development, Netflix made a
strong entry into the TV-making club, and struck the first blow against that
monopoly.

In my view, we're two innovations away from internet tv for the masses:
independent content production that can rival the networks for quality, and an
easy-to-use streaming box to supply it. The latter is easily possible with
technology on the market right now (Roku, Apple TV, etc.), and the former
seems all but inevitable.

~~~
mason55
The tough part about that for the networks is building out the infrastructure
and giving up all the free advertising that the cable companies give them.

By packaging their content as a standalone service, a la HBO Go, they've now
given up being bundled in tiers with other networks. And they've got to build
out their own delivery networks & apps. Or... they can join up with groups of
other networks, create a service that advertises and bundles networks together
and takes care of all the infrastructure.

Shit.

We just built cable again.

~~~
SomeCallMeTim
HBO Go is NOT effectively a standalone service. You have to subscribe to HBO
before you can get HBO Go. It's just streaming of things you already paid for
on cable.

Which sucks. I would pay for HBO Go if I could get it at a decent rate. But
like hell I'm going to pay for cable and the crazy upcharge for HBO just to
use HBO Go. As a result, Netflix and Amazon Prime get all my money, and HBO
gets nothing.

~~~
mason55
Yeah, sorry, I meant similar to HBO Go in terms of standalone app + network
built distribution. And the reason you can't buy HBO Go without cable are
exactly what I outlined above.

------
steauengeglase
"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.

~~~
forrestthewoods
Really? 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-
econo...](http://www.nytimes.com/2012/12/09/magazine/the-mad-men-economic-
miracle.html)

~~~
warfangle
Are you saying that netflix doesn't pay AMC per stream?

~~~
forrestthewoods
I'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.

~~~
orbitur
They're not avoiding Netflix only because it doesn't pay enough, they're
avoiding it because the medium threatens pretty much everything about their
current way of doing business. It's deeper than just money.

------
Pwntastic
So the link points to the qz homepage and not the actual article?

[http://qz.com/114483/amc-is-succeeding-by-breaking-the-
rules...](http://qz.com/114483/amc-is-succeeding-by-breaking-the-rules-of-
legacy-television/)

~~~
dkl
The link points to the same as yours. That site points to the middle of a
stream of articles, when you point to a single article.

~~~
Pwntastic
Oh it must've been fixed then. It literally pointed to just
[http://qz.com](http://qz.com) when I commented earlier

------
jstalin
I 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
_I '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.

~~~
jstalin
I'm happy to pay for quality content while filtering out all the jibberish I
would otherwise get by watching it on cable TV. And I don't have to pay the
$100+ per month that Comcast jacked me up to with fees, equipment, and
constantly increasing monthly subscription costs, which would always go up
without explanation or warning.

~~~
jonnathanson
+1

For those of us who are picky about our content choices -- and especially
those of us who don't really give a crap about sports -- cutting cable makes a
lot of sense. I wish cable providers offered a lower-cost option with no
sports package, but sadly, that's the bread and butter of the entire cable TV
business model. So I'm stuck paying largely for content I don't consume.

Bundling is a raw deal for those of us who don't care about the bulk of the
bundle. (To say nothing of the silly equipment costs, etc.).

~~~
aestra
Cable companies do offer a low cost bare bones option. It is called "basic
cable." It's a few bucks a month (around 10-15ish) and when I had it, it was
about the first 15-20 or so channels.

[http://www.timewarnercable.com/en/residential-
home/support/f...](http://www.timewarnercable.com/en/residential-
home/support/faqs/faqs-tv/basictvservice/what-is-time-warner-cables-basic-tv-
service.html)

~~~
jonnathanson
Yeah, the problem with basic cable is that you get only the basic cable
channels. There is no great way to sever, say, HBO and Showtime from ESPN-XYZ,
etc.

------
thehme
I 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.

~~~
L_Rahman
If 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
Wow. 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").

------
zw123456
So 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.

------
TylerE
I 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.

~~~
bcgraham
This used to be the Hollywood model. In the 1970s, for example, studios made
movies like you describe. Over time, they've found it's more profitable to
release fewer movies that are surer bets, which is how you get this endless
parade of formula movies with $250m budgets.

~~~
aamar
It's not just that it was discovered to be more profitable in the abstract.
Technology changes are a big factor too. Since TV achieved widespread
penetration, movies have had to promise something new: either visual
spectacle, something deemed unacceptable for broadcast, or something too
serious/subtle/obscure. The combination of cable and HD TV have more or less
eliminated the latter two categories. HD TV can adequately deliver pretty much
any non-"spectacular" content. So audiences are, in general, not as likely to
visit a theater for this, i.e. pay the cash required.

~~~
TylerE
Think of what I'm proposing as the "Shawshank Redemption" model. Don't focus
on box office sales, focus on the complete picture, and focus on compelling
storytelling.

Shawshank peaked at #9 at the box office, only making back about half it's
budget.

In the home video market, it has just exploded, selling over 5 million copies
in the UK alone. ([http://www.bva.org.uk/news-press-releases/members-press-
rele...](http://www.bva.org.uk/news-press-releases/members-press-releases/itv-
global-entertainment-makes-history-shawshank-redempti)). That's kind of
mindblowing...about the same number of copies as Sgt Peppers has sold in the
UK, and way more than any contemporary album - the closest comparison is
probably Oasis's What's the Story? (Morning Glory) at 3.3m units sold.

~~~
lmm
There's no "Shawshank Redemption model". It's an outlier, a one-off, and it
would be foolish to base your business model on the idea that you could
replicate it.

------
consultant23522
In 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
I 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
Breaking 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
The 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.

~~~
cheald
Oh, I'm not arguing that it's anywhere near as gratuitous as the content
you'll find on HBO. I'm just saying that it's difficult to play it as "PG-13"
material; it's more soft-R than HBO's hard-R.

------
RyanMcGreal
Sidenote: 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.

------
logn
$.35 ? Can AMC sell direct to the customer? I'd even pay double that, $.70.

~~~
cheald
Assuming 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.

------
login1234
Ignore all qz articles because it's infuriating to read on a mobile device.
How you break scrolling and alienate users should be an award.

------
osi
this 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.

~~~
mason55
_> 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
> _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?

~~~
mason55
_> Aren't I just charging more for A - which gets paid - but needlessly
filling B with programming?_

The idea is that the subsidy takes B from losing money being profitable.

Truthfully, only the individual networks know whether the subsidy makes them
additional profit or allows them to profitably air networks that they wouldn't
otherwise be able to.

------
michaelochurch
There'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.

~~~
smacktoward
The problem with the excellence strategy is that cost is predictable but
excellence is not.

AMC didn't invent the strategy of going for the high end, HBO did, and lots of
networks have tried the same strategy since. AMC has done well by it, but
others have not -- see Showtime and Starz for examples. This despite the
quality of their programming; Showtime's _Dexter_ is well-regarded, for
instance, but has failed to give a "halo" to the rest of the network. Starz
has been trying to move up-market with shows like _Boss_ and _Magic City_ ,
but for whatever reason none of those shows ever really found an audience.
(Even AMC's efforts have been fitful -- for every _Mad Men_ or _Breaking Bad_
there's a _Rubicon_ and _Hell on Wheels_.)

So betting on "excellence" is a tough thing to do, because you have to spend a
ton of money without any guarantees that the public will like the results. But
the results of cost-cutting are _very_ predictable, in the near term at least;
it takes a long time for a run of really bad programming to tarnish a network
so much that people stop tuning in. So for the bean-counters the "logical"
choice is obvious.

~~~
jswinghammer
When people tell the story of great content they tend to focus on the very
high points. "Breaking Bad" is much better than "Dexter". Even "Mad Men" which
isn't as good as "Breaking Bad" is much better than "Dexter", which is
arguable the best show on Showtime. Aiming for decent content isn't as
meaningful as actually getting that content. Starz and Showtime have failed to
get anything approaching HBO or AMC.

You can change your approach but you can't change your taste and if whoever is
making content decisions at Starz or Showtime continues to have their jobs
then it will not get them very far.

You see it now with the results of Microsoft copying Apple's strategy.
Microsoft is doing the same thing that Apple did but since they're out of
their element it's not going well. They would have been better off just being
a boring company that made a great Office product and an increasingly 3rd
party hardware partner friendly operating system. In the same way it would
have been better for Showtime to just show movies that no one wants to see but
pay for the opportunity to not watch.

------
gfunk911
So they broke the rules by doing exactly what HBO did. It's a good plan but
not a novel one.

~~~
autarch
Did 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.

~~~
MSM
While 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
HBO 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
It'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.

