What's 'Mad Men' Worth To AMC Networks?

AMC Networks Inc AMCX has decided to conclude its award winning TV series "Mad Men," which transform the company from a warehouse of classical movies to a TV channel capable of producing high-quality contents.

Since its debut in June 2007, "Mad Men" has climbed the popularity charts, increased its viewership ratings, which has positioned AMC Network as a much sought-after TV channel for advertisers.  

AMC Networks will launch the second part of the seventh and final session on Apr 5. Mad Men has received widespread critical acclaim for its historical reality, visual effect, costume design, acting, writing as well as direction. All these factors help the TV drama to win 15 Emmy awards and 4 Golden Globe awards. With the final session approaching, AMC Networks is extensively promoting the drama with a multimillion-dollar marketing campaign.

Research firm SNL Kagan reported that AMC Networks gained $469 million in advertisement revenues in 2014, up 7% year over year. A large part of this revenue came from the first part of the final session of the Mad Men TV show. For the final episode, at present, a 30-second advertisement slot is priced at $400,000 -$500,000 with only a handful of slats are remaining.

In 2014, AMC Networks charged an average of 38 cents per month for each subscriber as affiliate fees. This reflects an improvement of 9% year over year. Popular TV series like Mad Men helped the company to charge higher affiliate fees from cable TV operators. In addition, video-on-demand has become another revenue opportunity for top-rated TV shows.

Recently, AMC Networks aired the final episode from the fifth season of "The Walking Dead" which recorded as many as 15.8 million viewers. The strong ratings and immense popularity of The Walking Dead series is definitely going to improve ratings for the company and also drive advertisement revenues. The company's other popular TV serials include Breaking Bad, Halt and Catch Fire, and Turn.

Other Stocks to Consider

AMC Networks currently carries a Zacks Rank #1 (Strong Buy). Other well-performing stocks in the same industry include Starz STRZA, Entravision Communications Corp. EVC and Tribune Media Co. TRCO. While Starz carries a Zacks Rank #1 (Strong Buy) both Tribune and Entravision hold a Zacks Rank #2 (Buy).