After a strong campaign for its latest series, Halt and Catch Fire, AMC Networks (NASDAQ:AMCX) was hoping to see an equally strong ratings debut for its second original series of 2014. That's not what happened. As was the case with April's Turn, the network's hope for a new dramatic hit didn't materialize ... at least not yet.
Breaking it down to raw numbers, it's not pretty. The series was viewed by just 1.2 million viewers, which is 900,000 fewer than tuned into Turn. It's also an ocean away from the 2.5 million that watched the network's previous new original drama, Low Winter Sun, which had the benefit of the final episodes of Breaking Bad as a lead-in (granted, that number nose-dived in subsequent weeks).
Here are all of AMC's series' opening ratings:
The trouble with Fire's debut is what it WASN'T airing against. When Turn bowed, it premiered versus the season premiere of Game of Thrones, the Academy of Country Music Awards, and WrestleMania 30. Fire had the finale of Silicon Valley and a new episode of Veep as its biggest competition, so expectations were higher. Viewers might have been buzzing about this week's Game of Thrones episode, but it wasn't at the same time -- people had plenty of time to click over. WWE aired its Payback in the same timeslot as Fire, but it's among WWE's smaller pay-per-views and featured an unappealing card.
So what went wrong? One of the main culprits is the rising trend of making shows available pre-air to viewers online. Yes, for a show about computers, I agree it made sense to make some aspect of the show available digitally, but maybe not the entire show.
AMC's not the first network to do this. Showtime just did it for its new series Penny Dreadful and the broadcast networks have made various attempts at it over the years, but it doesn't always work. So if it's not guaranteed to boost ratings (and could actually hurt them), why do it?
The theory being debated by networks is that executives believe it may be OK sacrificing viewers in the short term for the ability to get them hooked in the long run. The hope is that the people who watched the preview online will then spread the word to tell their friends to watch on air. It's a way of building buzz to a select group of early adopters using methods they'll respond better to overall.
AMC president Charlie Collier tried his best to defend the practice in a statement AMC released with the ratings: "With Halt and Catch Fire, we are targeting a passionate core audience that largely consumes television on its own timetable, which is why we made the premiere available through a sneak preview on a variety of platforms."
He added that the preview generated "hundreds of thousands of plays and strong social media buzz," which won't figure into the overall ratings but shouldn't be ignored as those are still valuable viewers, and it speaks to his point about targeting a specific demo.
The 'Mad Men' Effect
Regardless, there is a silver lining here and it ties back to Mad Men. When AMC's flagship series debuted it also pulled in 1.2 million viewers. While it's grown over the years, it still regularly lags behind Breaking Bad and The Walking Dead in terms of season averages. The difference is Mad Men wins Emmys and a Best Drama Emmy win (or even nomination) is worth its weight in ratings. No network would cancel a show that earns Emmy's glow in its first few seasons. It's bad for business.
Halt could be for AMC just what it needs -- a critical think piece, much in the way Mad Men and Breaking Bad were in their glory days. Many have made the comparison that Halt's main characters have very Don Draper and Walter White-esque qualities. Lee Pace's Joe MacMillan has the cocky confidence of Mad Men's iconic cad and Scoot McNairy's Gordon Clark resembles a certain science teacher before he turned to dealing meth to provide for his family.
Halt might not win Best Drama its first time out, but a nomination of some sort is possible -- it currently holds a 79% "fresh" rating among critics on aggregator Rotten Tomatoes. If the +3 numbers come in strong and it can hold week to week, it's still got a chance to succeed. This is a quality series you shouldn't write off after one episode. It needs more time to marinate with viewers.
You also can't rule out the importance of the +3 numbers. Going back to Mad Men, when the show returned in April for the first half of its final season, it pulled in its lowest opening numbers since its second season. However with the now more accepted +3 delayed viewing numbers counted, those ratings got a nice boost and totals went from 2.3 million viewers to 3.7 million viewers. The same scenario played out last week -- Mad Men's 2014 finale earned 1.9 million viewers live but a total of 3.6 million viewers overall.
The other positive here is that Halt held just about all of the viewers from its Turn lead-in. While it's depressing for AMC that Turn's gone from 2.1 million viewers to 1.2 million viewers in about eight weeks, it shows the network has some sort of a dedicated core and the premise of Halt was enough to keep the interest of viewers watching the spy drama.
These numbers are still bad no matter how you spin them, but it's not the end of the world for AMC. This fall the network will debut its third and final new original series of 2014, the highly anticipated Breaking Bad spin-off Better Call Saul, and likely pair it with the fifth season premiere of ratings giant The Walking Dead.
But if the pressure on this pair to produce wasn't already elevated before, it's off the charts now and that's got to have executives and investors a little spooked.
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Brett Gold has no position in any stocks mentioned. The Motley Fool recommends AMC Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.