Why Netflix should buy AMC
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jasonevanish.com
[1]http://en.wikipedia.org/wiki/Sony_Pictures_Television#Shows_...
[2] http://en.wikipedia.org/wiki/Lionsgate_Television#Production...
[3] http://en.wikipedia.org/wiki/House_of_Cards_%28U.S._TV_serie...
Thanks for posting the details here. It's pretty clear that the OP doesn't really have a strong understanding of the mechanics of the TV business. There's simply no value to owning AMC. They could spend billions for AMC or millions for future shows themselves; Netflix is smart enough to see the real value is in the latter.
Moreover, Netflix has absolutely no interest in getting into the "linear TV" business. It doesn't fit well at all with where they are going.
EDIT: The partnership, as it exists today, is hugely beneficial for both companies. AMC gets promotion for new seasons and Netflix gets a huge rush of people watching previous seasons as they become available. There's zero value to either of them in one owning the other.
[1] http://www.slideshare.net/reed2001/culture-1798664?from_sear...
For anyone who is interested in learning more about the mechanics of the TV business, I strongly recommend the book "Difficult Men" by Brett Martin. It's nominally about shows like the Sopranos and their creators, but there is a lot about the industry that is "quality television".
A head's up though: even though it was published recently, it was written just before the ascendancy of good internet TV (House Of Cards and Seinfeld's web series were nominated for Emmy's only just this year) so it mainly chronicles the rise of HBO and then Showtime, AMC, etc from a decade ago. However the parallels between premium cable and the internet are pretty clear.
A few good examples of this: the (unaired) pilot for BBC's Sherlock is a not fantastic 60 minutes with significant pacing problems, which was subsequently reshot and turned into a well received 90 minute miniseries. The US version of Life on Mars got completed re-located and re-cast as the pilot was just bad (...most people wouldn't call what ended up as 'good', but it was a vast improvement on the pilot).
Neither approach is without its problems. Take a show like Game of Thrones, which is very expensive to make. On the one hand, HBO could have saved millions of dollars by not ordering a pilot. On the other, it was pretty clear once it came back from post production that the approach the writers had originally taken wasn't going to work, and a number of changes were made to make the show more accessible to people who hadn't read the books.
So HBO did 'waste' several million dollars on a pilot that never aired, but the ability for the creative team to review the pilot before embarking on a full series commitment meant many changes could be made that resulted in a better show. HBO have easily recouped the lost money.
It's interesting that Amazon have taken the opposite approach to Netflix, and ordered a large number of pilots rather than going straight into series commitments.
It'll be interesting to see how it plays out. None of the Netflix originals so far has done a traditional "pilot" approach and, while I was there at least, there was no desire to start taking that approach.
The Netflix model is really completely different than traditional TV. Take Hemlock Grove as an example. Critically panned and considered by most people in HN circles to be a "bad" show--but (without going into detail) I can absolutely say it has been VERY successful for Netflix.
(only slightly exaggerated)
Oh, that's what it was then. I downloaded the first series of Sherlock and was surprised to see the same first story twice.
But I thought the first version was vastly superior to the second one; it had much less money, which, in my opinion, allowed it to be more intense and more "real".
Whatever you think, it's most interesting to watch both!
I agree with most of Kevin's Spacey's comments but this one was a huge gamble for Netflix. I think pilots in the digital realm will be the media version of an MVP and seed financing before an A round.
Also define "immense" waste, a Pilot is an episode you're making anyway. There's some added expense from ramping production up and down temporarily but its no where near as bad as making 13 episodes where the last 7 or 8 aren't useable.
"The IT crowd" as a goofy farce had no American counterpart and was pretty much doomed to failure. Better translation examples would be the American "The Office" (based on other office-based comedies) and the American "Coupling" (a "Friends" clone.) "Coupling" failed because the first American episode was nearly a shot-for-shot remake. You might have been able to get away with that in the 90s, but not in the Netflix/Bittorrent era.
Not to mention that the casting was atrocious.
I was going to disagree because some U.S. remakes of British shows have not been as good or have been terrible, but in-general tried and true products in a market in one country have a better chance of succeeding in another country in similar form. This generalization pretty much carries over into most products and services.
Something else that would be interesting would be to show the # record/CD/mp3 sales of cover songs of successful original vs. originals by the same band doing the cover.
Nobody's claiming pilots are cheap, efficient, or anything of the sort. But they do serve a purpose. In the TV development business, it's better to know if a $1M pilot is going to bomb than a $10M+ season is going to bomb.
Netflix is in a unique position to change the way development is traditionally done, however, and over time, if they're successful, they may start to eliminate the need for traditional pilots -- or at least figure out how to make the pilot a more truly MVP, i.e., a lot quicker and less costly. But for the time being, they're paying above-market rates for development and production, and if anything, they're taking bigger risks on production and development than networks do.
It's all part of a gameplan, and I respect that. They're buying a lot of short-term risk in hope of nailing a sustainable, scalable, long-term model for original content. It's basically what HBO had to do back in the day, and what AMC had to do to become what it is today. This is why Netflix doesn't need to buy AMC; Netflix needs to replicate AMC (sort of), and eventually replace AMC (among others).
If Netflix can assess the content pre-pilot and then give the creators the money and space to tell their story, they don't need AMC or any of the old media, the creators will come to them. They're now selling DVDs of some of their content, they could potentially even syndicate it back... They have a lot of tools, they just need stories.
That's not at all the logic I was following, but interestingly enough, that's basically the VC portfolio strategy: counting on 1 company to earn 100x all the others combined. Spreading out the investment such that any one, or two, or ten can afford to fail so long as one wins big. Remarkably similar economics, in fact. It's how the TV networks have operated for so long. Networks aren't like founders; they're like VCs. The series creators are like the founders (sort of), the studios are like angel investors or accelerators, and the networks are like VCs.
But that's beside the point. My logic is that a pilot is a lower-cost proof of concept of a series (and even a pilot is extremely expensive and often wasteful). If anything, production companies and studios (not networks) should be making them, and should be finding faster, cheaper, and more minimal ways to do so -- eventually rendering the necessity for a full-fledged pilot obsolete. There is no reason why Lean series development and product/market testing can't happen, especially if a company like Netflix is the buyer.
To a certain extent, this is actually starting to happen. A lot of studios (again, not networks; let's be clear about that distinction) are pre-marketing and pre-releasing proof of concept videos and other materials before pitching them to networks and going down the tradition pilot path.
"If Netflix can assess the content pre-pilot and then give the creators the money and space to tell their story, they don't need AMC or any of the old media, the creators will come to them."
I never said Netflix needs AMC; in fact, I recall saying the exact opposite. Currently, FYI, Netflix is playing the "old media" game in going to, paying for (at a premium), and developing with the "content" marketplace in Hollywood. I don't think enough people quite grok that. As I said, this seems like a necessary step until such time as Netflix commands enough respect and power within that market to rewrite the rules and change the economics of distribution.
You either give them the money to produce the series or you don't.
I am not sure what Netflix gains content wise from buying AMC - they already have rights to Breaking Bad and Mad Men. Orange is the New Black and House of Cards both seem to be better received than any of AMC's new programming (Low Winter Sun is getting skewered by blogs/critics).
I agree that Amazon and Netflix are in the midst of the original content battle. Netflix is taking the analytical approach, whereas Amazon Studios seems to be scaling the typical production process to the web (scripts -> pilot -> pickups).
In the end, I think AMC needs Netflix more than Netflix needs AMC, so I don't see this kind of acquistion happening. But still a fun article to think about. Thanks for posting!
PS If you are interested in this kind of meta-TV stuff, check out Andy Greenwald's stuff on Grantland: http://www.grantland.com/contributor/_/name/andy-greenwald
‘Walking Dead’ Season 3 Mid-Season Finale Ratings Top 15 Million http://screenrant.com/the-walking-dead-season-3-ratings/
Having said all of that, of the people I know who really follow the show on the creative/biz side are happy that the former show-runner was canned and replaced with Scott Gimple who wrote a lot of the best episodes.
Personally I'm taking a wait and see approach with the next season. If things aren't solidly turned around by the middle of the next season, I'm going to quit watching. I don't want to make the same mistake I did with Lost where I was so convinced they would fix the problems that presented themselves in later seasons that I stuck with it to the bitter end.
It would have been nice for a little * spoiler alert *.
The whole show one bad cry away from being a zombie chick flick. The writing and scenes are just bad, unrealistic(if that quality means anything here, which I feel it does) and just so stupidly emotional.
Ugh, don't people want anything makes them think anymore, this whole mass market shit is catered for those with not so much critical thinking ability. Maybe I'm lacking some emotional intelligence, but wasting my attention on petty and shallow relationships and trying to delay the plot from continuing was acceptable during the Dragonball Z days but not now.
Take an amazing show like Burn Notice and apply that methodology to creating action, drama or what have you. If you look at the plot over the 8 seasons, you will notice for sure that the story cannot really top the first few seasons, but it doesn't matter. The execution of the show is what really matters, and a certain level sophistication, acting and chemistry is important.
These shows lack any direction or purpose and that's important.
For the rights you describe, Netflix would need to figure out how to buy Sony.
I work in the industry and am happy to answer questions.
AMC is perhaps most critically recognized for Breaking Bad and Mad Men, but they picked up those shows the same way anyone else can (including Netflix) -- by outbidding everyone else for them.
Netflix doesn't need help getting critically/publically lauded programming -- Orange is the New Black was a critical hit, and House of Cards was also well received. Their opportunities for growth lie in the people who don't really care about 'critical TV': the vast majority of consumers who have basic cable, are satisfied by basic cable, and don't pay attention to streaming services because the value proposition isn't attractive enough.
Put another way -- what if Netflix got into sports broadcasting?
If you broadcast every university sport, you'll get a large number of family, friends and fans of specific teams that are under-served with existing content. It's not worth the cost of creating a new channel for each, but it might be doable online.
Breaking Bad and Mad Men are ending shortly.
Walking dead seems to be tapering off fans, turning from less of a zombie show to more of a drama ( each episode is 95% talk, 5% zombies ).
The fact is, both breaking bad and mad men would make the price of AMC unrealistically high. If Netflix did want to buy them, they should wait until the season after when both shows are no longer on and get it for a song.
A much more astute purchase would be HBO/Cinemax/Shotime
I personally think the author is onto something here, as AMC obviously knows how to do production at a high level, and the point is they need volume of shows as well.
I'm sorry to derail, but I am so sick of this being considered as a "problem" with the show. The show is about human beings facing their inevitable demise. Even the title "The Walking Dead" is a play on words, referring to the survivors, rather than the zombies themselves. The show, the novel are both dramas first, and zombie stories second, where the zombie story is simply a backdrop to the very human drama of coping with one's own death and the death of loved ones.
The show has gotten worse, but that's because the characters have gotten more bland and the scenarios have gotten more tepid. It has nothing to do with drama:zombie ratio. Would you criticize Breaking Bad because you don't see as much crack being made in more recent episodes? How fucking stupid.
If this is a major problem to you, then you don't get the show and probably shouldn't be watching it anyway. I'm sure Fox will cook up some nice, bland, predictable zombie-loaded crapfest for you in due time.
It's not stupid at all. The meth on Breaking Bad is not the plot, the plot is cancer-stricken man is pulled into the seedy world of illegal drugs and how he participates. The plot of Walking Dead is survival in a zombie world. If you aren't going to focus on conflicts with zombies then they should've just set it in a post-apocalyptic world sans zombies.
It's never about just the zombies.
[ * ] Not counting slasher/gore movies
The setting of Walking Dead is a world with zombies.
That would be like criticizing The Walking Dead because you don't see as many vampires in recent episodes.
Having finished Orange is the New Black I think Netflix has the right people to make decent decisions as to what to buy. It would seem to me to make more sense to invest directly in the content rather than buying a purchasing team.
AMC makes a small amount of premium content on a continuous basis, and forces cable companies to carry a mixture of paid channels and advertising. AMC is also vastly more profitable, both in terms of P/E ratio (18 vs 300) and gross earnings (200MM vs 40MM), so it's not as if their "legacy" model is hurting them.
Netflix makes a small amount of premium content and sells itself as an alternative to cable, undercutting the traditional AMC model. Their core goal in making content is just to have a library they don't have to license from outside. It doesn't have to be current or ongoing, just big.
It's true that both of them rely on premium content as a loss leader but they have very different ways of earning money and capturing an audience. It would be hard to reconcile one with the other.
Second, AMC doesn't make any content. They fund it via production companies, just like Netflix.
Third, I don't understand your point about "forcing cable companies to carry a mixture". Cable companies pay AMCX for the right to carry AMC channels (AMC, Sundance, IFC, &c); that's a little more than half AMC's revenue. The other half of AMC's revenue comes from the ad inventory AMC sells on its channel.
These are probably nits, because ultimately your point about incompatible business models is correct.
This is how AMCX, the firm, maintains its ad inventory. It doesn't matter if the content on AMC can't pay for itself as long as the suite of channels in combination can.
Netflix has a good strategy in their hands. They need to focus on leadership, creative, and funding daring projects.
Side note: Consider this, Netflix already has three hit shows — House of Cards, Orange is the New Black, and Arrested Development.
I think Netflix should just do way more original content like they already have: http://en.wikipedia.org/wiki/List_of_original_programs_distr...
Just think, if you could reserve a theater, show some Netflix movie and split the proceeds.
But seriously, why on earth would you adopt your losing competitors' business model when you're the new hotness?
Thus, Netflix wouldn't be an outlier, but part of a broad change/consolidation happening to the industry.
One of those shows has only a few episodes left, while another has one season remaining.
Also, AMC doesn't produce Mad Men or Breaking Bad.
Maybe I'm the only one watching it, but it's one of the better shows on TV, in my opinion.
buying AMC is just buying a cable channel and those rights.
NOT a good move for netflix. they could simply start outbidding AMC/others for quality shows. oh wait, thats exactly what they've been doing....
http://statspotting.com/the-one-mistake-that-might-haunt-net...