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Cable Series ‘Fargo,’ ‘Mad Men,’ and ‘Salem’ and the Effect of Time-Shifted Viewing

http://www.fool.com/investing/general/2014/05/01/cable-series-fargo-mad-men-and-salem-and-the-effec.aspx

Brett Gold
May 1, 2014

Many TV fans understand that the whole goal of launching a hit show is to cash in with advertisers or lure subscribers. Lately though, that decades-long equation has seen a new twist: time-shifted viewing. Executives now understand the true power of delayed viewing and it's creating a new normal.

The +3 Network

Source: FX.

It's called the +3 numbers and all involved parties are beginning to recognize why they are so important. In this new binge-watching, time-shifting, DVR-heavy culture, the traditional "live" numbers are not the only worthwhile stats anymore. Sure, if your series dominates "live" TV then of course it's a hit, but hits these days are few and far between when you don't include these expanded numbers.

Take for example FX, a subsidiary of Twenty-First Century Fox (NASDAQ: FOXA), which enjoys a consistent boost from time-shifting viewing. Critical favorite The Americans is one of the most-watched time-shifted shows on TV. The show debuted its second season a few months ago to 1.9 million viewers, down sharply from the 3.2 million that first checked it out. So where did the viewers go?

The answer is nowhere -- they just waited to check out the new episode. When all the numbers were accounted for the viewer count soared back up and even slightly topped its initial debut.

+3 number also impact new shows in a major way. This month FX debuted Fargo and the +3 numbers told a completely different story. The series initially was watched by 2.65 million viewers but that number grew to a more impressive 4.44 million viewers when the post-live viewings were included. That's a 67% jump and a new network record.

The more valuable 18 to 49 demo numbers soared from 1.02 million to 1.78 million, a 74% increase. It's likely that when the +7 numbers come in Fargo will likely break into FX's Top 5 most-watched debuts of all time.

Time after time

Source: AMC.

For FX the +3 and +7 numbers are important to help establish new shows, but for a network like AMC Entertainment (NASDAQ: AMCX) they take on a whole new meaning. In AMC's case the numbers show if established shows are still viable. Take Mad Men, which returned this month to its lowest season premiere since 2008.

Season 7's 2.3 million viewers was down 32% from season 6's 3.4 million viewers, disappointing given this marked the beginning of the end for the Emmy-winning drama. The decline can be attributed to a number of things, including viewer fatigue and resentment over AMC's controversial split-season approach.

While those factors shouldn't be ignored, it was also assumed the numbers would go up with the +3 information; and they did. For as maddening as it probably was for executives to see Mad Men take that steep of a hit, they had to be relieved when it surged 62% to 3.7 million viewers just a few days later. The demo rating also rose significantly, including 74% in the 18 to 49 range and 73% in the 25 to 54 market. 

Still it's important to note even with the bump in season 7, ratings remain down from the season 6 opener. These ratings include its own bump from