Friday, May 30, 2014

Content And TV Everywhere

The challenge facing TV networks and their distribution efforts is having the best content that many people want to watch.  When you have a hit, it makes money from advertising and syndication through different windows; when you have a dud, it is a write-off.  But for networks that negotiate with production companies for content, deciding what rights to buy is a gamble.  Some networks buy the linear and on demand rights but may not also buy the streaming rights.  Some buy domestic distribution but stay away from international.  Depending on what the license rights are for content determines how much of a networks' content can be offered to a cable operator to carry with streaming media rights.  Thus TV Everywhere may not be everywhere.

AMC Network certainly had two major content hits with Mad Men and Breaking Bad.  But their deal with Lions Gate was for cable carriage; Lions Gate retained other distribution rights.  So as AMC  moves forward in its content strategy, it has evolved from a buyer of content to an owner of content.  According to the Wall Street Journal, "At a time when more people are binge-watching shows on streaming services like Netflix NFLX -0.10% and Amazon Prime, ownership could pay off handsomely with future streaming deals, as it has already done for AMC with "The Walking Dead," the first show it owned. But it also brings higher risks and more upfront costs, which have lately been spooking some investors."  Welcome to the world of risk and reward.  And should AMC find another breakout hit, it is well positioned to succeed in the new world of TV Everywhere. 

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