Now that Breaking Bad is a hit, advertisers are paying network rates for the right to air ads in the final episodes. The shift suggests that once-underdog channel operators such as AMC Networks (AMCX 3.73%) are becoming TV's new power players, says Fool contributor Tim Beyers in the following video.
Call it an Apple moment for cable TV stocks, in which one-time laggards rise to become leaders. We've known this was coming for a while.
Earlier this year, Morgan Stanley published a report that showed broadcast TV ratings have declined 50% over the past decade. No wonder ad rates are normalizing. Audiences are going outside the Big Three networks to get their fill of quality programming.
AMC benefits more from the shift than peers, Tim says, by acting more like Showtime and HBO while still catering to advertisers looking for edgier fare. The network derives roughly 42% of revenue from advertising as of this writing.
Comcast (CMCSA 0.94%) also benefits from the shift via NBCUniversal's interests in Syfy and USA Network. Both advertising-supported channels have found niche hits in the likes of Defiance and Suits, among others. Is now the time to be betting on either of these cable TV stocks? Both? Tim answers these questions in the video, so please watch.