This is “a new, developing phenomenon,” AMC Networks CEO Josh Sapan told investors this morning at the Barclays’ Global Technology, Media and Telecommunications Conference. Although advertisers still crave ratings points, they also increasingly want to reach people who say that “there are only two or three shows I watch and I live and die for them.” The trend is gaining momentum as viewers discover opportunities to binge view shows on pay TV, VOD and streaming services including Netflix and Amazon Prime. In addition, young viewers become obsessive about programs when social networks such as Facebook and Twitter help to connect them with others who share their passion. As a result, “that favorite stuff in media is emerging as the most important [driver] of value,” Sapan says. That’s encouraging for networks such as AMC — which has high-engagement hits with dramas including Mad Men, The Walking Dead, and Breaking Bad. But it’s hard to build a business around the trend: “Good dramatic TV shows aren’t known until they’re on,” he says. And nobody has perfect pitch. “There are many shows that have spectacular television pedigree and the show doesn’t work” while others from untested producers or stars “take off like crazy.” Sapan says he’s encouraged by his upcoming shows including Low Winter Sun (a police drama), Turn (about Revolutionary War spies), Halt & Catch Fire (about the computing boom in the 1980s), and Line Of Sight (a sci-fi drama the AMC chief calls “nuanced and exquisite”).
With AMC’s recent successes Sapan is pressing pay TV providers for low to mid single digit fee increases. “When we try to get paid fairly there’s a fair amount of friction, that’s a polite word,” he says. On the advertising side, the upfront market “has not yet broken so we’re on the precipice.” But his networks — including Sundance, which will introduce ads later this year — “have been well received….We’re in fine shape today.”