'Mad Men' and Don Draper Should Buy Netflix a Drink

Don DraperMad Men is now several weeks into its fifth season on AMC Networks' (AMCX) AMC.

When the new season of occasionally decadent and rarely sober 1960s ad executives on Madison Avenue treated AMC to a 20% spike in ratings -- after a long hiatus -- it didn't require lead marketer Don Draper's creative imagination to figure out the catalyst.

The availability of the show's first four seasons as streaming content on Netflix (NFLX) have helped broaden the show's reach in a dramatic way. "We believe we found an untapped audience of the show," Netflix chief content officer Ted Sarandos said on Tuesday at a company-hosted event during the National Association of Broadcasters convention.

He's right.

A Basket Full of Kisses

Sarandos points out that 3.5 million subscribers have watched the fourth season of the show since Netflix struck a licensing deal to begin streaming Mad Men last year. A whopping 800,000 accounts went through all of the earlier seasons.

The most popular episode streamed this past Monday -- the day after the fifth installment of the new season aired -- was the show's pilot.

Either new viewers are becoming interested in the show or diehard fans are trying to relive the Emmy-award winning show from the beginning.

Peggy Olson wasn't always a path-clearing copywriter, you know.

One Never Knows How Loyalty Is Born

Cynics have called Netflix's streaming service "rerun TV" and it's a badge that CEO Reed Hastings wears with pride.

Limiting itself to striking licensing deals for earlier seasons helps differentiate Netflix from Hulu or the current episodes offered directly from broadcasters and cable networks. Aiming for earlier seasons is a win-win deal. The content creators derive incremental revenue from content that only had value in syndication deals in the past. Netflix arms itself with a ton of content to keep its streaming customers from canceling the service.

Networks haven't necessarily approached Netflix as a source for promotion. It's largely a business decision for now.

However, the emerging success of shows including Mad Men and Walking Dead after bringing in new viewers to current shows through Netflix can't be ignored. Even the typically jaded Tinseltown has to appreciate the ability to get paid through licensing deals that actually increase the eventual value of the shows themselves through larger audiences.

This may change in time. Netflix is embracing original content, making the service a competitor with many of its licensing partners. It's all part of Netflix's evolution.

But as long as Netflix is ultimately more valuable to the studios -- in a combination of cutting meaty checks for digital distribution and helping promote older content -- Hollywood will realize that Netflix is more friend than foe.

Everyone goes through an identity crisis -- even Don Draper.

Motley Fool contributor Rick Munarriz owns shares in Netflix. Motley Fool newsletter services have recommended buying shares of Netflix.

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Kate Mc

I re-watched S4 on NF before S5 of Mad Men started and was very grateful. The hiatus was so long that it brought me up to speed on what was happening. I like the streaming feature on Netflix and it has gotten even better since they raised their rates last year. They have most TV shows and many recent films as well that you can watch instantly. They aren't perfect but I'm a fairly loyal customer for 7 years now. I am now watching older "Torchwood" from the BBC and "Breaking Bad" Since there aren't enough hours in the day to watch all the good television we have today I relish the opportunity to watch series I may have missed in the past. Yeah, mad Men should buy them a drink or 2.

April 19 2012 at 6:02 PM Report abuse rate up rate down Reply