Sunday, Sept. 29 is a big day for AMC (NASDAQ: AMCX). That night, the network will air the final episode of Breaking Bad, its hit TV show that's achieved both widespread popularity and critical acclaim. Then, in about sixth months, the seventh and final season of Mad Men will start, and 13 weeks later, AMC's other big show will air its final episode.
AMC has been a great stock to own recently; but with two of its hit shows coming to an end, the network could be in trouble.
Mad Men and Breaking Bad
Over the last few years, AMC has catapulted itself to the top of television. During the course of their runs, both Breaking Bad and Mad Men have won numerous Emmy Awards, and In June, the Writers Guild of America put both shows in the top 15 of its "best written TV series" list.
But the shows aren't just for critics. Mad Men and Breaking Bad have been strong performers -- ratings wise -- for AMC, and have helped it to beat on earnings. On its last earnings call, management cited Mad Men in particular as a magnet for advertisers, noting that the show continues to draw in an "upscale" crowd.
Likewise, Breaking Bad has been a boon for AMC, with the last eight (currently airing episodes) drawing in substantial ratings. AMC's management said that the final episode in particular was highly sought after by advertisers.
But AMC has plenty of other shows
Losing both shows will no doubt hurt, but AMC has plenty of other content. In particular, the network will now turn to The Walking Dead to carry the load going forward, and that show, combined with its companion series Talking Dead could continue to carry the network.
AMC also has other programming like The Killing, which it cited as being a strong performer in the second quarter, as well as new shows like Low Winter Sun. Ratings for that show have not been particularly good, but as Breaking Bad's steady growth of viewers demonstrates, shows can take time to catch on.
There's also a forthcoming spinoff to Breaking Bad -- Better Call Saul. The show, which will star Bob Odenkirk as Saul Goodman (a supporting character in Breaking Bad), will obviously attract attention from the millions of breaking bad fans that have grown accustomed to the character. However, as Goodman acts as comedic relief on Breaking Bad, the show might be more comedy than drama.
HBO survived the loss of The Sopranos
Other networks have survived the loss of their key shows. Time Warner's (NYSE: TWX) HBO has been particularly adept at cycling from one hit to the next, shifting from The Sopranos to True Blood to Game of Thrones.
But admittedly, HBO has one advantage over AMC: It's in the subscription business. Ratings only matter to HBO so far as the shows the network is putting on keep its subscribers happy -- and encourage new ones to sign up. As Slate noted, the first season of Game of Thrones was -- by broadcast standards -- a letdown. And yet, HBO eagerly committed to paying for more seasons.
It's a good thing it did, because Game of Thrones has turned into HBO's money-maker, its most popular show ever next to only The Sopranos. But if HBO had been run like a traditional channel -- paying attention only to weekly ratings -- Game of Thrones might never have seen a second season.
Netflix is getting into original programming
Netflix (NASDAQ: NFLX) takes HBO's model and pushes it even further, flat out refusing to release data on viewers for its original shows like House of Cards and Orange is the New Black. Both shows appear to be popular, and have certainly received critical praise, but without the actual data, it's impossible to say with certainty.
HBO's management took a subtle swipe at Netflix back in July, characterizing the company's refusal to release ratings as "curious."
Nevertheless, Netflix's strategy appears to be working -- the video streaming giant surpassed HBO in US subscriber base earlier in the year, and if CEO Reed Hastings can make good on his goal of 90 million subscribers, Netflix could more than triple it.
AMC can make through
Unlike its competitors in premium original programming -- HBO and Netflix -- AMC is still a network that has to rely on advertisers. With the loss of Mad Men and Breaking Bad, it needs new hit shows to come in and pick up the slack.
Fortunately, it still has The Walking Dead, not to mention new shows like Low Winter Sun, and an interesting product in the pipeline in the form of the Breaking Bad spinoff Better Call Saul.
AMC has shown that it's capable of delivering great original programming, and there's reason to be hopeful that it will continue.
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