AMC’s Struggles May Be A Sign That Peak TV Is Ending

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AMC is offering voluntary buyouts this month to 200 employees, according to Deadline, and the company expects to shed around 10 to 15 percent of its workforce. The reason offered by Deadline is AMC’s need to meet spending goals, after slipping ratings for the sixth season of The Walking Dead. Sophomore season ratings for Better Call Saul and Fear the Walking Dead were also off of their premiere seasons. Indeed, since Breaking Bad ended its run, AMC hasn’t been able to produce another hit anywhere near the scale of The Walking Dead.

It’s not for lack of trying. Some critics suggests that AMC’s new series Preacher is the best show of the year, but ratings have been soft (it averages around 1.7 million viewers a week). David Schwimmer’s Feed the Beast has also been a disappointment for AMC.

AMC is not alone, however. In fact, it’s in a better position than most prestige cable networks. The Walking Dead and Game of Thrones are the biggest shows on cable, but they’re also the last shows on cable capable of attracting 10 million viewers.

Look around at the premium networks. They’re all suffering. HBO cancelled the expensive Vinyl after one season, and that network hasn’t produced a new drama hit in years. FX has the critically acclaimed but low rated Fargo and The Americans, but that network hasn’t yet been able to create another Sons of Anarchy sized-hit (although, American Horror Story does modestly well for them). Showtime hasn’t fared any better. The heavily promoted Billions barely eked out one million viewers a week, and Roadies gets just over 300,000 viewers a week (and critics dislike it). Starz is producing great content, like Outlander, Ash vs. Evil Dead, The Girlfriend Experience, and The Missing, but the only series anyone is talking about are Outlander, which averages around 1 million viewers a week, and Power, with about 1.25 million viewers a week . The Night Of over on HBO is considered a hit after its second episode rose to 1.28 million viewers in the overnight ratings, which is half a million fewer than Preacher. Until Westworld arrives this fall, The Night Of is one of only two currently running dramas on HBO outside of Game of Thrones (The Leftovers is the other).

In other words, there’s a lot of great television on cable, but aside from The Walking Dead and Game of Thrones, many of those dramas are lucky to get one million viewers a week. Given the steep price tags on these series (Vinyl cost HBO $100 million), those networks need streaming outlets like Amazon and Netflix to license those shows in order to make a profit.

Moreover, as viewers continue to untether themselves from their cable boxes, networks are going to have to survive as standalone entities. HBO has about 10 original programs right now. Cinemax has two. AMC has nine dramas. FX has six.

Netflix has over 25 original programs, and it continues to add more. When viewers are parcelling out their dollars for standalone services, how many are they going to add? Two, maybe three? TV junkies may splurge on four.

Someone is going to get left out.

There are too many great shows, and not enough viewers — or money — to go around. The layoffs at AMC, and the exit of Michael Lombardo at HBO are probably the beginning of a protracted era of contraction. The last two quarters for Starz have seen 22 percent and 65 percent drops because of the mounting costs of original programming. If American Gods is not a hit for the network, it could be in trouble.

The culling is coming. Yahoo’s foray into original programming has already become a casualty, despite some strong content (Community‘s sixth season and Paul Feig’s Other Space). Some of these other networks may not survive, either. Given their projected $35 billion in annual profits by 2021, Netflix and Amazon are going to be fine. AMC currently boasts four of the top shows on cable, and HBO has enough history and Time Warner money to keep running through thin times. In three or four years, however, some of these other outlets may not survive when the great unbundling arrives.

Here’s a list of the major prestige drama networks, their currently running dramas, and their estimated average overnight* ratings. Without an anchor like The Walking Dead or Game of Thrones, how many will be able to survive when viewers are given the ability to choose?