With AMC Networks' stock having fallen 34 percent in one year as ratings on its eponymous flagship network have ebbed significantly, MoffettNathanson analyst Michael Nathanson has declared that AMC's "content cycle is over."
By extension, the analyst poses an interesting question: Is the whole "Peak TV" paradigm AMC spearheaded nearly a decade ago is finally in retreat?
Certainly, Nathanson makes the case that AMC Networks is in retreat, with total day C3 Nielsen ratings falling 6 percent in 2014 and 2 percent in 2015, as water-cooler hit The Walking Dead begins to slow, and spin-off series like Fear the Walking Dead have been unable to reach the lofty viewership heights of their predecessors.
So far this year, ratings are down 10 percent, and the AMC Networks has begun issuing buyouts to longtime employees.
Indeed, unless it can develop a hit show capable of reaching 10 million or more viewers, AMC stock will remain, as Nathanson put it in an note to investors today, "in purgatory." But what about all the other cable networks that followed AMC into an aggressive original, serialized programming strategy?
"AMC Networks' management team deserves tremendous credit for identifying an opportunity and executing it to perfection," Nathanson said. "In 2007, when the majority of the general entertainment cable networks were running programming marathons of off-network syndication, when Netflix was primarily renting DVDs by mail and when serialized TV production was a loss-making backwater for fools, AMC decided to start programming expensive serialized dramas."
The rise of SVOD served as a catalyst for the so-called "Golden Age" of TV, Nathanson argued.
"Along the way, Netflix started to aggressively buy the first window rights to these three programs and created a new and valuable SVOD window for serialized shows that were usually orphaned in syndication," Nathanson added. "Pretty soon, the entire TV industry — from producers to programmers — wanted to be in the serialized content business."
Rival cable networks, meanwhile, began to acquire this programming to "define and reshape" their networks, Nathanson said, eager to "increase their leverage for their next affiliate negotiation."
But for AMC, trouble began in 2015, Nathanson added, when The Walking Dead — after growing its audience exponentially in each previous season — saw its first viewership declines.
With the number of original scripted shows increasing from 214 to 400 from 2010 - 2015, FX President John Landgraf famously declared, "There is simply too much television."
The question now is, are the sudden misfortunes of the programmer that started the Peak TV trend a signal that it is finally ending?
- read this MoffettNathanson report (sub. req.)
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