AMC Boss Says Internet TV Helps Drive Pay Television; Nickelodeon USA Fears For Ratings With Netflix Dominance

From World Internet TV on PC (blog):

AMC Boss Says Internet TV Helps Drive Pay TV

Although many TV networks and media companies see internet TV as a threat, the boss of AMC Network can see the benefit of having online streaming. In fact he sees online TV as a driver of the pay-TV eco-system and a contributing factor to the 40% revenue increase for Q1 2012.

AMC see internet TV in a positive light

AMC content is streamed quite a lot online, Netflix have the exclusive online rights for the zombie show, The Walking Dead. of which the first season can be watched now with more coming online. They also have rights to back catalog episodes of Mad Men and Breaking Bad.

For AMC, streaming older content online appears to be working. Revenue for the company was up around 40% in the first quarter of 2012, leading to a profit growth of 20% on the previous year.

CEO of AMC, Josh Sapan says that streaming services from Netflix and Amazon played a part, saying, “2012 got off to a strong start for AMC Networks, with double digit increases in net revenues, and operating income. Continued viewer enthusiasm for our programming resulted in ratings gains for our national networks, most notably AMC's The Walking Dead, which ended its second season with nine million total viewers, an increase of 50 percent over last season’s finale. The series reigns as the highest-rated scripted drama in basic cable history in advertiser’s key demos. The fifth season of AMC's Mad Men currently ranks as the most watched season ever of the series, outperforming the prior season by double-digits. These successes underscore the strength of our original programming strategy, which continues to drive audience and advertiser demand for our networks.”

He said that they has struck digital deals in an “extremely careful” way, making sure that content went digital at least a full year after broadcasting on TV. That “seems to make sense” and, “It hasn’t hurt the network, but is actually helping to drive the pay TV ecosystem for AMC.”

While distribution via the web is going well, it could also be the cause of problems with traditional Pay-TV operators. AMC currently have a problem with the satellite company Dish who plan to drop AMC content. And the cause of the problem (according to DISH) is that the online deals devalue the content.

However, Sapan puts it down to the on-going litigation between the two companies which stems from a previous HD channel business. He said the threat by DISH to drop AMC Networks content is, “a direct result of the litigation,” and he does’nt think subscribers will like it, adding they (DISH) are, “not acting in the best interest of its subscribers.”

Not everyone agrees that internet TV has no effect on ratings though, research has shown that Netflix streaming has led to a 6% drop in ratings for the Nickelodeon channel.

Also from World Internet TV on PC (blog):

Nickelodeon Fear For Ratings With Netflix Dominance

A study performed by Bernstein Research has suggested that ratings for children-specific cable networks are on the decline, with the primary cause being the success of online services, and in particular Netflix.

Measuring TiVo-based viewing patterns across America for Q1 of 2012 (via the 35,000-strong opt-in TiVo ’Power Watch’ measurement service), research found that while Nickelodeon’s ‘ratings’ has improved by 2% (on Q1 2011 figures) in ‘non-Netflix’ homes but has dropped 6% in households that do feature the popular online streaming service, thought to be key considering that Nickelodeon licence shows to the company best known for movie streaming and DVD rental.

Meanwhile, similar results have even been recorded for children’s channels that do not offer their content on Netflix, as demonstrated by for Cartoon Network, which while recording higher numbers for both Netflix and non-Netflix homes, had a better increase in the latter.

Bernstein analyst Todd Juenger said of the findings: “Turns out, Netflix streamers watch just as much traditional TV as non-streamers. However, there is a significant share shift among streamers. Kids networks (not just Nickelodeon) and syndicated shows are getting severely whacked. Our TiVo data cannot prove Netflix is to blame for the entirety of the Nickelodeon problem, but it certainly indicates that Netflix had something to do with it. We believe the obvious implication for the kids’ networks, if their internal data looks anything like ours, is they should get out of these Netflix deals as fast as they can.”

Netflix, though, appear to be claiming that the numbers for Nickelodeon could be coincidental, and that their online broadcasting of original programming licenced by networks can be a benefit to the channels, as it was noted by Bernstein researchers that ratings for AMC (who offer exclusive original programming licenses to Netflix), are 15% higher amongst viewers who are also Netflix subscribers as opposed to not. The online streaming service also claiming that in their role, they are able to serve as a ‘first window’ to generate interest in the shows, and by extension, the networks themselves.

However, it appears that the method works better with some channels rather than others, but will channels such as Nickelodeon know when the right time to move is, or will they be holding out faith for a turnaround?

Also from World Internet TV on PC (blog):

Netflix Claim Credit For Mad Men Boost

While online TV and linear schedules are generally seen on different markets, Netflix appear to have made it their duty to claim that they are responsible for the recent upturn in success of AMC drama Mad Men, suggesting that the show’s prominence on the online streaming site has given it a cult status that has translated directly to higher network ratings.

Entering its fifth season, Mad Men were going in off the back of a fourth season average of 2.3m viewers, though the recent premiere drew 3.5m, meaning that in the time period between seasons, the show seems to have taken a fairly large boost in popularity, and seems to follow on from recent prophetic comments made by AMC’s CEO Josh Sapan.

Netflix are considered by many (including themselves) to be the key reason for the upturn in fortunes, with the 3.5m noted as being a record for the series, which revolves around a 1960′s advertising agency, and its creative director Don Draper (played by Jon Hamm, who is due to headline alongside Harry Potter star Daniel Radcliffe in a new show for UK satellite channel Sky Arts).

Netflix’s ‘chief content officer’ Ted Sarandos boasted of the suggestions that his company helped the show on its way (also using the statement as a defence to recent claims that they have the opposite ratings effect on children’s networks such as Nickelodeon): “We brought maybe a million viewers to AMC. These are people who had four years to watch the show [before Netflix took on the online rights], and didn’t, then we gave them the opportunity to watch the show in a well-priced and well-distributed model. In that way we’re quite additive.”

Speaking at the annual Cable Show in Boston (USA), Sarandos added of the rumours that Netflix have taken viewers from Nickelodeon: “People’s taste are so diverse that no specific program or network has such high viewing concentration that you’d see that cause and effect on ratings.”

Having developed as a dominant and respected force for rebroadcasting network content online, Netflix are currently looking to continue their development of original programming, and with what they claim to be cold hard proof that they can get people interested in TV shows, will any future Netflix formats ever end up on linear schedules to popular effect?