Time Warner's HBO, another network with its legacy as a movie channel
embedded in its name, had successfully invested in original programming
that made it hard to get rid of. In 2007, The Sopranos aired its final episode on HBO, having changed a lot of assumptions about television in the process. "We need a Sopranos," was the mantra within AMC.
That year, AMC debuted Mad Men, a drama about an advertising agency in the 1960s. The original script, by a Sopranos writer,
had languished for nearly a decade without finding anyone willing to
produce it, but risky shows suddenly seemed like better bets. "My boss
has told me that ratings, in that moment, don't matter," recalled Rob Sorcher, an executive who was brought in to turn around the network.
What AMC got from Mad Men was
a different kind of hit, the type that tends to be called "critically
acclaimed," a show that some people would be passionate about--and
complain loudly if their cable company ever dared to pull it off the
Mad Men was followed a year later by Breaking Bad. Its lead, Bryan Cranston, won the Emmy for best actor after the first season. "Now we're a network," Charlie Collier, the president of AMC Networks, remembered saying when Cranston won. "We have two shows." Popular shows that followed included The Walking Dead and The Killing, which attracted better ratings and additional cult followings.
provided enough leverage for AMC to demand that cable companies pay
higher affiliate fees, which rose from 22 cents per customer per month
in 2007 to 33 cents in 2013--a 50% jump in five years, according to
estimates by SNL Kagan. (That's just for
AMC itself; AMC Networks also includes IFC, WE tv, and the Sundance
Channel, which command lower rates.) When Dish Network balked at paying higher fees last year, AMC ultimately won the dispute.
at where AMC Networks's revenue has been coming from lately.
Advertising is strong, up 13.7% in the second quarter from a year
earlier after faltering in the early years of AMC's transition. (Mad Men, ironically, did not bring in lots of ad dollars in its first few seasons; zombie drama The Walking Dead proved to be a better sell.) Meanwhile, revenue from domestic distribution -- that is, affiliate fees -- is even stronger, up 17.5%.
Shares of AMC Networks are up 93% since
the company, previously owned by Cablevision, went public in the middle
of 2011. Its turnaround is all the more notable because it has bucked a
lot of industry norms in the process.
is more progressive than nearly any other cable network (other than
HBO, which is in a whole other class) in distributing shows over the
internet. New episodes of its most valuable programming, including this
final season of Breaking Bad, can be purchased on Apple's
iTunes and Amazon's Instant Video a few hours after their initial airing
on US television. Most cable programming isn't similarly available, out
of fear that people won't see a need to pay for cable TV subscriptions.