AMC looks to turn art into cash

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

AMC, which last week broke its own year-old record by earning 23 Emmy Award nominations, is translating that critical success to its bottom line. The cable network, which for years ran nothing but movies and only started carrying commercials in 2001, has done a remarkable job of remaking itself.

But it hasn’t been cheap. Rerunning ‘Cool Hand Luke’ a few dozen times may cost only $300,000, but producing a season of ‘Mad Men’ and ‘Breaking Bad’ is more like $30 million. The network isn’t resting on its laurels. It has another pricey series -- the political thriller ‘Rubicon’ -- in the works next summer and a mini-series remake of ‘The Prisoner’ for November.

AMC, owned by Cablevision Systems Corp.’s Rainbow Media, has already seen strong growth in ad revenue. Charlie Collier, president and general manager of AMC says the network’s ad dollars have grown by 50% since 2006 when it first started its push into original programming. While Collier wouldn’t cough up real numbers, industry research firm SNL Kagan says AMC took in about $208 million in ad revenue last year, compared to $144 million in 2005.

The next challenge for AMC is to get distributors to pay more to carry the channel. According to Kagan, AMC gets about 23 cents per-subscriber from cable and satellite operators. That’s a far cry from the more than 40 cents per-subscriber that FX and USA pull in.

AMC may have to get Don Draper of ‘Mad Men’ out there to personally sell the network if it wants to play in that league. For starters, even though its shows are critical favorites and award winners, they do not get the ratings of shows such as ‘The Closer’ on TNT, FX’s ‘Rescue Me’ and USA’s ‘Burn Notice.’

Furthermore, like most cable networks, AMC’s deals with its distributors are staggered. In other words, they don’t all come up at once. The plus side to that is if a network is struggling, it doesn’t face of slew of cable and satellite operators looking to lower the price. The downside is if a network is hot, as is the case with AMC, a lot of distributors still have sweet deals.

AMC recently wrapped up long-term deals with cable giants Comcast and Cox that helped it boost its distribution fee and will soon start talking with satellite broadcaster DirecTV. Collier would only say that with success comes a ‘better position’ and ‘better deals.’

For Don Draper’s sake, let’s hope so.

-- Joe Flint

Photo credits: Top: Charlie Collier. Credit: AMC. Bottom: Jon Hamm as Don Draper. Credit: Associated Press