'The Killing' Could Have a Deadly Effect on AMC

Netflix NFLX wanted The Killing to continue. Should AMC AMCX have listened?

The once-dead series returned to the critically acclaimed network this month with new episodes. While the revival was widely promoted (and hugely anticipated), other shows have begun to assassinate The Killing' ratings.

Season three premiered with lower than expected ratings. Viewers continued to avoid the ill-fated series last Sunday, indicating that AMC made a bad decision.

"The Killing wasn't gonna be produced on AMC if it were not for Netflix getting the exclusive in the streaming market," Rich Tullo, Director of Research at Albert Fried & Company, told Benzinga. "Ultimately The Killing probably wasn't a very good script. AMC knew it wasn't a very good script. But it got produced anyway because they had this ultimate revenue source. Now it's making AMC look bad in the ratings and look bad in front of investors."

Shares of AMC are actually trading up slightly since the series returned on June 2.

The stock initially declined more than two percent in the days that followed the season three premiere. While that temporary decline may not have been enough to significantly hurt AMC, it came at a time when the network was riding high on several hits, most notably The Walking Dead.

On the whole, Tullo thinks that content creators are "playing the short game and they have no strategic overview of what the next five years are gonna look like."

"Therefore they're acting like the next five years are gonna look like Netflix and that Netflix model ain't gonna change," said Tullo. "They're extrapolating the current into the future without understanding the cannibalization, as well as the opportunities.

"If I was producing a movie today, why do I need distribution? If I'm MGM, why don't I just distribute the movie myself and if people want to go to the movie theaters to see it, then I'll just charge movie theaters for it. But I don't need Paramount or Viacom VIA to distribute the movie for me if it's digital. I'll just send [theaters] the [file] and they buy it and I get a cut at the box office."

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ