Commentary

Some Networks Should Take More TV Advertising -- And Stop The Kvetching

With all the problems AMC has with its TV producers, maybe it should just sell more advertising and make more money for everyone.

Now, we are learning that "Breaking Bad" is coming to a short end -- just another 16 episodes. This after news that AMC's other award-winning show, "Mad Men" may also make a somewhat earlier exist, maybe going just one more season.

AMC started as an old-movie network, with no advertising. Then in recent years, it opened things up a bit, allowing marketers to buy some traditional advertising time. But AMC still doesn't offer nearly the kinds of advertising inventory of other cable networks, which can run up to 17 minutes of non-program time per hour.

The financial numbers are a mystery. For the first three seasons, "Mad Men" only pulled in around $2 million on average for its entire 13-episode season. By way of comparison, a typical broadcast TV drama can pull in $2 million to $4 million in advertising revenues for one episode.

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We know hour-long dramas cost $2 million to $4 million an episode to make. So, where is the money coming from? Affiliate fees? Subscriber revenue? Hmmm...

Seems many AMC shows have had some protracted negotiations. Financially speaking, has it been any coincidence that both "Breaking Bad" and "Mad Men" have gone on extended hiatus from time to time? That saves money, for sure

Now, as a public company, one can only guess these type of negotiations will only be more pressured. You can imagine it' different financial prospective for AMC -- not quite a full ad-supported TBS, not quite an HBO.

Media buyers will tell you AMC can get broadcast-like CPMs for key 18-49 viewer and other groups -- at least for its original airings of its big shows. Add into is this price premium for some of the special brand entertainment extras some marketers get especially on "Mad Men." But total advertising marketing revenue levels are at a different level. (In part because of still lower overall ratings). That makes its affiliate revenue component all that more important.

The positive: AMC still does well by its viewers and TV marketers with limited advertising clutter. The negative: TV creators have a lot of complaints.

There's an old theory that artists are given leeway to moan and complain because that tension works its way into better TV shows. At least that's what AMC has going for it: a bunch of really great shows, also including "The Walking Dead" and "The Killing."

TV producers and other creatives will tell you they love the work on cable -- especially getting creative freedoms they can't get elsewhere. But a better advertising component seems to be needed -- which might seem to involve an adjustment with cable operators.

Right or wrong, modern entertainment consumers are used to entertainment advertising -- in the minutes before theatrical movies start, and when watching streaming TV networks show on the likes of Hulu. All that means some cable networks could do more.

1 comment about "Some Networks Should Take More TV Advertising -- And Stop The Kvetching".
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  1. Darrin Stephens from McMann & Tate, August 17, 2011 at 9:04 a.m.

    Don't encourage them to befoul their air with more ads.

    One of the reasons we can justify the broadcast CPMs for the tiny ratings of "Mad Men" is because the network is a little less cluttered.

    Oh, and don't think that AMC isn't already up there in terms of non-program time. According to Nielsen Ad*Views, they ran just a shade under 16 minutes of non-program time per hour in 2Q '11, and that doesn't count the copious amount of sponsor billboards and product integrations they air.

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