AMC Bets Viewers Will Pay More to Watch Ad-Free

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The AMC original series 'Preacher' recently began its second season.
The AMC original series 'Preacher' recently began its second season. Credit: Marco Grob/AMC

Will TV viewers pay more for commercial-free TV? AMC Networks Inc. and Comcast Corp. believe they will.

AMC, home of the hit zombie show "The Walking Dead" as well as other original series including "Preacher" and "Better Call Saul," has introduced a commercial-free service for avid fans who are Comcast subscribers. The service, called AMC Premiere, costs $4.99 a month and for now is only available to Comcast's 22.5 million video subscribers.

The unusual deal reflects the growing competition among TV distributors, as well as viewers' habits. As new online entrants like Sling TV crowd into the TV landscape, cable providers are cutting exclusive deals with programmers to make their services stand out. In April, AMC announced it will make shows exclusively for Charter Communications Inc., the second-largest U.S. cable provider behind Comcast.

"The programming and distribution world has changed dramatically," said Charlie Collier, president of the AMC channel, SundanceTV and AMC Studios.

Comcast and AMC will share revenue from the subscription fees for AMC Premiere. Over time, AMC plans to make AMC Premiere available to other pay-TV subscribers, Collier said.

Consumers have become accustomed to watching TV without commercials, whether it's through their DVRs or on Netflix, Amazon and HBO. Hulu has also introduced a commercial-free option that costs more.

"There is a demand for that," said Matt Strauss, Comcast's general manager for video and entertainment service, adding other cable networks have expressed interest in similar deals. "There is a segment of the viewership who is willing to pay incrementally for a more premium viewing experience."

Subscribers to the premium AMC channel will also get exclusive original content, like early looks at trailers or deleted scenes, Collier said, adding that prior seasons of some shows won't be available because AMC has licensed the rights to others like Netflix and Amazon.

Subscribers will be able to watch ad-free versions of new episodes at the same time as the live broadcast, meaning they'll finish a show before regular viewers, creating the potential for spoilers on social media.

But that's nothing new, Collier said. With the rise of DVRs, people are already "starting and finishing episodes of television on their own pace all the time," he said.

-- Bloomberg News

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