With the number of original cable, broadcast and streaming series increasing from roughly 280 five years ago to more than 400 today, there is simply too much original programming relative to the amount of subscription and ad dollars needed to support it, said FX Network President John Landgraf last week.
Landgraf made his comments at the Television Critics Association conference in Los Angeles, an event covered by Broadcasting & Cable, Deadline Hollywood and numerous other publications.
"There is simply too much television," Landgraf said. "My sense is that 2016 or 2017 will represent peak TV in America, and then we will see a decline."
To establish their brands, cable channels like AMC and SVOD platforms like Netflix (NASDAQ: NFLX) have followed a blueprint first established by HBO more than a decade ago -- create must-see original series.
For some, this strategy has worked well. Heavy multi-year, multi-million investments into original shows like Mad Men, Breaking Bad and The Walking Dead significantly increased AMC's profile. In an annual survey of pay-TV subscribers conducted by Solutions Research Group, AMC went from being ranked the 46th most "essential" network to 10th in five years, the biggest jump for any channel.
The subscriber and advertising fees now being recouped by the flagship AMC channel is a big reason why AMC Networks reported last week that earnings from continuing operations in the second quarter increased to $83 million compared with $60 million just one year ago.
Likewise, Netflix has triggered a veritable original-programming arms race in the SVOD market, with streaming competitors like Hulu and Amazon Prime Instant Video (NASDAQ: AMZN), just to name a few, racing to try to keep up with a Netflix original-content budget that's projected to exceed $5 billion next year.
But for Netflix, the rewards have been undeniable -- the platform reported growth to 65 million subscribers in the second quarter.
But the simple physics of the TV market, Landgraf believes, can't sustain this expansion.
"There is too much competition," he said. "It is hard [for networks] to find good shows… and I believe it's impossible to maintain quality control."
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