I was responding to a comment ragging on how paltry the numbers were for this week's Mad 
Men, and how much the numbers were spun in Mad Men's renewal press release, and even compared the performance to the CW!
My response twas starting to get a little long, so I figured I might as well just do a post.
Perhaps I am just beaten down by all the press releases at this point, but spinning numbers seems more de rigeur than extreme to me. Many of the cable networks commonly use Live+7 numbers where available, and AMC didn't invent the notion of combining the numbers from multiple broadcasts of the same episode on one night.
1.608 million for the third episode of season three is bigger than 1.255 million for the third episode of season two.
I'm a big believer in making relative comparisons, and when it comes to Mad Men I either remember past seasons numbers or can look them up when I don't. Though the numbers for the 10pm episode on Sunday were down again, and way down from the premiere, they are still up vs. the third episode last year by 28%. If those numbers last year were good enough to renew it, these are better.
You can't compare AMC to a broadcast network. Not even the CW.
Comparing a small cable channel that seems 80% made up of old movies to a broadcast network (even a tiny one like the CW) seems inappropriate. Mad Men at 10p on Sunday with 1.608M was AMC's most-watched program of the week. The .6 rating with adults 18-49 seems tiny, but AMC is a network with tiny ratings. That .6 is 50% greater than the .4 rating the network averaged in prime time last week.
Is it worth it for AMC?
Obviously AMC thinks it is since it just renewed it for a fourth season. Whether AMC is right or wrong is something we can only speculate on.
Sadly, we'll never know what sort of premiums Mad Men makes from advertising to few, but very wealthy viewers, and how much revenue that adds up to, or what the show's profitability is.
But from AMC's perspective if not for Mad Men (and to a lesser extent, the critically acclaimed Breaking Bad) AMC wouldn't get any attention at all.
DVD sales might not be through the roof, but let's not forget CARRIAGE FEES
Through 5 weeks of release, the season two DVD sales for Mad Men were estimated at $6.35 million. Ok, it's definitely no True Blood, but at least so far this year, neither is any other show released on DVD. No show has come close to True Blood so far, 24 was the closest and it isn't close. True Blood has done more than 2.5 times as much in sales. On a guess, DVD sales offset only a small portion of the show's costs, which are estimated to run at around $2 million per episode.
But in the world of cable, attention is important and so having a lot of attention for Mad Men is good, even if it doesn't always turn into viewers.
In 2008, AMC was estimated to receive $.23/mo/subscriber. Nielsen estimates as of last October had AMC in ~94.3 million homes. That's around $21.7 million a month or around $260 million a year in revenue from cable and satellite subscribers.
If Mad Men helps justify the carriage fees, or better still, helps the fees inch up, that's good news for AMC. Even a $.03 (three cents!) increase per month would yield an additional $33.8 million per year, more than enough to cover the estimated costs of making Mad Men.
So my guess is, that yes, Mad Men is definitely worth it for AMC.
Update: as noted in the comments and by others more observant than I who caught it, Lionsgate, which produces Mad Men gets the DVD revenues, not AMC. Lionsgate also pays the full cost of episode production, though it's probably fair to assume that AMC absorbs ~75 percent to 80 percent of that cost through its licensing fees.
You might want to clarify the 6.35 million as dollars, and not units.
MM is worth it for AMC now, but probably not after next season if ratings don’t improve a bit more. It does have an affluent audience and advertisers seem to love it (as do critics), but 4 seasons of so-so ratings will probably do it in.
I’m a bit frustrated with this season, myself. There has been little to no plot so far, and I can’t imagine where they’re going with it. Last Sunday’s episode was the equivalent of watching paint dry, in which the most interesting things were the dancing and Peggy smoking pot. I find Peggy by far the most interesting character, but the plot (if there is one) is moving at glacial speed.
I know that people say that’s how the show works, that characterization is more important than plot, but we’ve had two seasons of characterization. After a while, the best characterization can’t save a show whose characters never do anything interesting.
Here’s to hoping it picks up soon.
That’s a very interesting breakdown, especially concerning the acclaim the show provides AMC. I wonder if this holds true for FX concerning Damages. It doesn’t get high ratings, which is a crime in my opinion, but it does get some well deserved critical acclaim.
Is Mad Men worth it for AMC. No.
Firstly, I am shocked by how little the season 2 DVD has sold. With the amount of exposure, more than AMC has ever seen, and the amount of awards and certain people wetting themselves over the show, it is really but a very small drop in the ocean. Though for every critic that loved the show, there was another that despised the style over substance and cliched and hackneyed writing of the over simplified show.
Secondly, Robert, could you please stop being a hypocrite. ”But in the world of cable, attention is important and so having a lot of attention for Mad Men is good, even if it doesn’t always turn into viewers.” Robert, I have no idea what planet you are on, but attention alone does not keep profit running in cable. VIEWERS and DEMO keep the money rolling in. I mean that comment stands against everything that this blog was designed for. As Cable has proven if a programme is truly good, it does not need promotion or attention. Also, attention is only good when it yields sizable new viewers and can increase subscriptions. Yes Mad Men has increased slightly in viewers from last season, but in line with all the other cable increases it is hardly to be expected and how much alone of it was due to the exposure of Mad Men is questionable.
This brings me to my next point. The Mad Men exposure will only be good for AMC if they can improve upon their image. I mean only two shows is pretty pitiful. If they were truly serious about launching a drama brand they should have rolled out other dramas before now. When the hype has worn off of Mad Men, which it is seeming to, they won’t have a very strong launching pad for other dramas. It would have been much more profitable for AMC to concentrate on doing what they do best, butchered movies shown dozens of times.
AMC was profitable before Mad Men and judging by the less than stellar ratings for season three (even if they were improved upon the dire season 2 ratings) it certainly has done nothing long term for AMC. All it has created is unsustainable hype for AMC and come five years time I doubt having produced Mad Men will mean a hell of a lot.
I’m surprised at some of the comments in regards to the slow pace of season three. I’m actually very pleased with season 3 and I think that they have picked up the pace compared to season two . you have the Interesting storyline of the father moving into the house and you have Peggy beginning to Loosen Up. I do agree with the comment above that Peggy is by far the most interesting character. With only 3 episodes in for this season, Peggy has already Picked up a stranger in a bar and has smoked pot, This to me is Fast Pace and at this rate, she is going to become the GRACE HANNADARKO of the 1960′s!
I’m continually fascinated with Peggy, Tom, and she’s the reason why I keep coming back to the show. The other characters are dull to the point of sleep inducing. As for the father moving in, that was telegraphed back in season 2, and a whole plotline based around the kid stealing $5 was… dull. Just plain old boring. Yes, the father is declining. We’ve known this for two seasons. Beyond that, there just is no conflict there – nothing to maintain interest.
I really feel that the first three episodes of this season could have been told in one and not lost much because of it.
This brings me to my next point. The Mad Men exposure will only be good for AMC if they can improve upon their image. I mean only two shows is pretty pitiful.
Mad Men was the first basic cable drama to win a Best Drama Emmy. Regardless of anyone’s opinion of the show, that’s GOOD for AMC’s image. Whether that means anything in terms of profits is definitely another story. But to suggest that AMC’s image hasn’t been improved as a result of Mad Men is kinda nuts.
I’m not being a hypocrite. Demo viewers keep the ADVERTISING dollars rolling in, but basic cable networks have two revenue streams: advertising, and carriage fees.
The way carriage fees get doled out are based on a lot of factors that are beyond pure numbers. The perception of a network’s importance, sometimes seemingly irrespective of actual ratings, does appear to be one of the (many) factors in setting carriage fees. Those factors get more complex when a company has more than one network as is typically the case (AMC, WEtv, IFC, Sundance and others are all under the Rainbow umbrella which is owned by Cablevision).
Though Rainbow appears to be profitable (and growing) there’s not enough breakout of the data for me to see how well AMC is doing financially. Please feel free to share AMC financial data if you have it.
AMC doing scripted series like Mad Men and Breaking Bad is about trying to move upstream in BOTH revenue streams. I think it’s a reasonable strategy.
obviously you want to see more spaghetti westerns and less Mad Men
AMC gets nothing from dvd sales i believe since its a Lionsgate show i think, they may get a minuscule percentage from digital sales within the current season run…. the disc sales may just cover Weiner’s ridiculous salary
I’m not disputing that is isn’t good for AMC’s image, I’m just baffled which direction AMC wants to go in. One show is not going to improve its image Robert. I mean how naive are you? AMC is still known for its endless repeats of shitty movies that have been butchered by editing and now it is known for being a one trick pony in terms of drama.
In terms of longevity I can’t see AMC focusing on both groups whilst maintaining the same level of profit margins it once did by concentrating solely on movie repeats. Scripted drama is expensive and is designed to lure more people to cable and it is essential that it is popular and will keep bringing in more subscribers/higher carriage fees. The massive decline in Mad Men’s viewing figures is troubling and it is even more troubling that is has been renewed for a fourth season with abysmal ratings and its expensive production budget. I honestly don’t think BMW would be impressed with how their money has been spent and I don’t think keeping award winning shows that perform poorly in DVD sales and overnight viewing figures and have lacklustre overseas sales is a particularly good move for the future and its future profit margins.
But Mad Men has done little to boost the image of AMC. Like I said it takes more than one show to do this and it needs to be sustained over a period of years with far more content.
Okay, here’s a bit of a financial breakdown for AMC.
Production costs $26 million
DVD sales $6.5 million
I would still like economic data that was not before the worst of the recession though.
Sure, the show might have paid for itself, but no doubt the alluring profit [True Blood] of producing scripted drama has not been seen by AMC. Sure AMC will try and use Mad Men to raise the carriage fee, after all it would be stupid not to, but whether or not they have any luck remains to be seen especially as the 2.9 million dropoff of season three occured, more than half of its premier audience. Yikes.
It certainly is an exspensive venture just to get attention.
I still don’t know why anybody would actually pay for cable though. Stealing their content is still the best bet.
Monster if you are sure that that AMC does not get the profit of DVD sales, then it is riduculous that Mad Men is still getting made. It is even more surprising that it is still in production after the outrageous demands by Weiner.
I mean the writing is laughable and he wants millions for creating an obscure show most people don’t like or have never heard of.
So you just said:
I’m not disputing that is isn’t good for AMC’s image
and then almost immediately after it said:
One show is not going to improve its image Robert. I mean how naive are you?
LOL! Please don’t worry about my naivete until you’ve gotten the whole not contradicting yourself within two sentences of each other thing worked out! You raise some legitimate questions, but given your last sentence (re: stealing content), landing a bit too far on the troll side of the line to bother responding to them.
Doug, I do agree with you about some of the characters, The Main Secretary(I forget her name), I always felt there is so much to explore there But so far her character has been wasted. I also agree with you about the Kid stealng $5 From grandpa, you are right, what was the point of that? What was the Lesson? I do think that there is this Ominious undertone to the series that is leading up to the Kennedy Assasination that I am sure will be the season finale. When Season 4 starts, I predict because of that event, the entire series(like the nation at that time) will change.
In Reading the comments from various people about whether Mad Men Is making money for AMC and ad revenue, dvd sales etc etc. Keep in mind that Most Series, LOSE MONEY in the first few years of production(I know this from working at a major studio for 7 years back in the 1990′s). I worked at WB back in the days of Er and Friends and I know that Friends, Despite huge ratings was a money loser for the first few seasons because of the Huge Salaries and Production cost. They didnt even begin to make money until it went into syndication, and dvd sales of course were still a few years away. I remember that there was talk in its last season, that they were trying to maybe keep it on just one more year but they decided against it because the salaries alone per episode were over $6 million(just for the stars that isnt counting the behind the scenes people).
That Mad Men isnt making money for AMC isnt nothing new
It’s worth it the same way The Sopranos was to HBO, it’s their first show that has taken off and branded the network as something other than a movie channel.Now with Breaking Bad they are definitely becoming a force to be recokned with. Two shows in the top categories at The Emmy’s is something not even the broadcast networks are doing right now.
And it shouldn’t be forgotten that AMC has already got a couple of more new shows coming, like for example the The Prisoner-remake. AMC is expanding slowly, but you can’t expect them to suddenly show 2 drama series every day. That would kill the network financially.
I would think the DVD revenue goes to the production studio, not AMC. That would be Lionsgate and it either helps cover the deficit to produce the show or if AMC pays a full license fee, it falls to the bottom line.
JS, cable was different back then. One, it didn’t have all the other cable companies to compete against it with original programming often and two didn’t have its exposure peak in the middle of a recession.
Evil, I realise that, but they really should have gotten their act together and premiered at least of one them earlier this year to capitalise on the success of Mad Men.
Hey Robert, isn’t the net wonderful, when somebody justifies their comments you can delete them
. Mature.
The larger background here is the collapse of first generation of nitche channels; the most effective ads for a show are inflow promos. It seems pretty straight forward on my end that Mad Men increases the value of the catalog which increases potential carriage fees and on and on.
There is absolutely zero evidence that Mad Men, the individual show, makes AMC any money. Ratings (and advertising rates) aren’t fantastic, they lowballed Weiner on his contract extension, and now the show runs long because they had to squeeze in extra commercials.
That Mad Men raises AMC’s bottom line, probably very slightly, mainly due to carriage fees, is almost certain. But I wouldn’t put any money on Mad Men making it into Season Five, especially if Weiner pushes for significant budget increases.
The problem with cable, and the reason that while it has been unbelievably successful the past few years, but will never truly compete with the broadcast channels is because of advertising.
Cable channels advertise the hell out of the season premiere of every one of thier shows, but after that will you rarely get a commercial for the show, with the few exceptions being Burn Notice and Royal Pains, which continued to produce big numbers and even reach season highs in later eps.
But look at In Plain Sight. I couldn’t go a half hour without seeing several commercials for it, but after the premiere I was lucky to see one spot during WWE Raw, and one somewhere else throughout the week. And its ratings showed.
Showtime had advertising on big channels for Nurse Jackie, and its premiere did a decent number, but after that nothing. Same thing with Mad Men. Commercials on the big networks for its premiere, but after that nothing, not even on AMC.
I do not know what kind of numbers AMC needs for Mad Men to be profitable, but I do know that if AMC beefed up their advertising for the program, constantly flaunted how many Emmy noms/wins it has and just put an effort into reaching the masses instead of people on the internet who already know about the show and watch it then it could be a critical and ratings hit.
Mad Men comes down to branding, hands-down.
AMC is using the show to brand themselves as a high-class channel. Once it gets other shows that produce better ratings (and are similar, class-wise), they will drop the show. Until then, they’ll use it for the exposure.
So just think about Mad Men as an hour-long advertisement for AMC. A very expensive ad.