Sapan: ‘Zombies Are Thriving’ on AMC

Success of The Walking Dead, Others Hint at Affiliate Fee Increases
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AMC  Networks CEO Josh Sapan hinted at an industry gathering Thursday that affiliate fees could rise at quartet of networks, based on the success of original shows like zombie drama The Walking Dead, which have driven overall viewership to its channels up by more than 50 million over the past three years.

“It actually delivers audiences like the NFL,” Sapan said of The Walking Dead (which returns for its fifth season on AMC on Oct. 12)  at the Goldman Sachs Communacopia conference Thursday. “Zombies are thriving.”

But Sapan added that while The Walking Dead is cable’s most-watched show when it airs, other programs on AMC and other networks are driving viewership. Although mostly known for critical and audience hits like Breaking Bad and Mad Men, shows like Revolutionary War drama Turn on AMC, as well as reality shows on WeTV and Rectifyon Sundance Chanel are resonating with viewers. And though the channels have been “friendly” when it comes to affiliate fee increases in the past – he said the networks have averaged high single digit increases in past carriage deals – he believes they are undervalued.

That could change in the next several months. Sapan said AMC Networks’ carriage deals vary – some are for short terms like three years while others last five, seven or ten years. However, at least of couple of distributors come up for renewal each year.

“We have been more platonic in the manner in which we priced,” Sapan said. “If you look at rates, and you look at audience delivery, important shows and consumer perception of value, I think you find that we’re frankly a little out of whack. We’re punching well above our price. When contracts are that long, that’s not an easy thing to alter.”