3 Questions About AMC’s Business Heading Into Mad Men’s Final Season

Mad Men's final season begins tonight. While that's sure to bring joy to the show's thousands of fans, you can bet no one at AMC Networks (NASDAQ: AMCX  ) headquarters is celebrating.

In many ways, Mad Men is AMC's original catalyst. Growing viewership has followed critical acclaim, including four Primetime Emmy awards for Outstanding Drama Series. That AMC is taking the heretofore unprecedented step of breaking a single season into two, 7-episode chunks says a lot about how much the network values the property that helped put it on the map.

And why not? To HBO's chagrin, AMC has made plenty from creator Matthew Weiner's serial. Time Warner's (NYSE: TWX  ) pay cable unit famously turned away the show, despite its years working with Weiner, a longtime writer for the HBO hit The Sopranos.

There's also a transition to consider. Mad Men's final season comes just months after Breaking Bad took its leave, and two new dramas -- Turn and Halt and Catch Fire -- remain unproven. Another signature property, The Walking Dead, is on hiatus till October.

Add it up, and we're left with a whole series of questions that need answering. Here are three from our top entertainment and pop culture analysts.

Mad Men's final season begins tonight on AMC. Will the business ever be the same? Credit: Milton Glaser/AMC.

Leo Sun: Is AMC intentionally avoiding big-name creators?
In the future, many viewers will remember the era of Breaking Bad, Mad Men, and The Walking Dead as AMC's "golden age." They were developed by high-profile creators -- Vince Gilligan, Weiner, and Robert Kirkman and Frank Darabont, respectively -- and instantly turned AMC into a contender against HBO, riding high on the shoulders of creative giants.

Of course, executives might take a different view. For CEO Josh Sapan and others, this has also been the era of widely publicized disputes with the showrunners over budgets, running times, and creative direction. In response, they now seem determined to work with cheaper and less controversial talent.

Craig Silverstein, creator of the short-lived, lackluster sci-fi series Terra Nova, developed Turn. Chris Cantwell developed Halt and Catch Fire after writing and directing Krantz, a little-known independent film made on a $4,000 budget. Both could deliver as spectacularly as their predecessors. And yet, looking at their credentials, I wonder if Sapan and team see their shows as cheap experiments designed to cause minimal harm if they fail.

Yet that could be a fatal mistake for AMC. Turn's premiere earned a mixed rating of 47% among critics tracked by Rotten Tomatoes, compared to The Walking Dead's 88%, Breaking Bad's 100%, and Mad Men's 86%. Only 2.1 million viewers tuned in to Turn's premiere, which pales in comparison to the 15.7 million viewers who watched The Walking Dead's season finale. Meanwhile, Halt and Catch Fire looks like a copy of HBO's Silicon Valley.

So that's my question -- will backing away from big-name creators cause AMC dramas to quickly shed the polished reputation that they've attained with Breaking Bad, Mad Men, and The Walking Dead?

Will Turn get viewers to tune in now that The Walking Dead is on hiatus? Credit: Frank Ockenfels/AMC.

Steve Symington: Can AMC's new shows entice viewers to care?
I'm not so worried about who is behind AMC's latest properties, but rather what makes them unique enough for audiences to crave tuning in.

After all, the entertainment sector routinely breeds new writing and directing talent with well-placed bets on both the big and small screens. Take the runaway success of Twenty-First Century Fox's Chronicle two years ago, for example, which landed director Josh Trank the job of rebooting Fox's The Fantastic Four franchise in 2015.

While AMC is taking risks, as Leo suggests, in favoring small-time creators, it could also prove a great way for the network to even further distinguish its content from the competition. However, it won't matter if viewers at home don't care enough to watch in the first place.

To be honest, I'm worried AMC's official description of Turn as a "historical thriller" will turn out to be an unfortunate oxymoron. Don't get me wrong; a Revolutionary War spy ring might well be great fun to watch, but I know I'm not the only one underwhelmed by its ambiguous title and lackluster previews.

This in mind, you can bet I'll watch the June 1 premiere of Halt and Catch Fire. But perhaps that's because I'm a giant computer science nerd who paid his bills in college driving around the local Geek Squad bug and building websites.

In the end, though AMC's core hits will almost certainly continue outperforming, its future shows will falter without broad-based appeal.

Silicon Valley debuted to decent ratings and critical acclaim. Sources: HBO and The Hollywood Reporter.

Tim Beyers: Can comedy become a core competence?
While I wouldn't say Halt and Catch Fire apes Silicon Valley, I think it's notable that AMC has largely avoided scripted comedy heading into Mad Men's final season. That could change when the network develops We Hate Paul Revere, about two brothers who struggle to find their place in Colonial Boston.

AMC has also inked a follow-up deal with writer-director Kevin Smith that includes a third season of the unscripted series Comic Book Men and a potential late-night series based on the podcast, "Hollywood Babble-On." Sapan and programming chief Charlie Collier appear to be chasing comedy at a time when others are profiting from it. HBO, notably: Veep is a hit for the network, as is the dark comedy Girls.

For its part, AMC isn't likely to get first pickings among the comedy series in development, and not just because of HBO's track record. The AMC-backed IFC network has played home to most of the company's comedy programming, including Portlandia, Maron, and Comedy Bang! Bang!

Meanwhile, Yahoo! (NASDAQ: YHOO  ) is also investing in web-delivered TV programming. Specifically, short-form sitcoms. Smart move for a company that's already established its comedy bonafides as the exclusive web home for Saturday Night Live clips.

And yet I think AMC is at its best zigging when others zag. Mad Men broke new ground. So did Breaking Bad and The Walking Dead. A good, well-produced, hour-long comedy is the next frontier. Will Sapan and his team spend the capital to get there? As an investor, I'm hoping so.

Now it's your turn to weigh in. What questions would you ask AMC chief Josh Sapan if you had the chance? Do you expect the network to thrive following Mad Men's final season? Let us know your take in the comments section below, including whether you would buy, sell, or short AMC Networks stock at current prices.

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AMC is winning in part because of early bets on digital distribution and programming other cable executives wouldn't touch. But now the entire industry is shifting, creating a windfall for those bold enough to cash in. Our analysts believe three companies will claim the lion's share of the $2.2 trillion that's at stake. Click here for their names. Hint: They're not Netflix, Google, and Apple. 

 


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