AMC Networks Inc (AMCX): How The Undead Can Breathe Life into Investors’ Portfolios

There’s no denying it any longer. Zombies are everywhere, and people couldn’t be happier . . . well, not all people. Some actually believe that they are in imminent danger–so many people, in fact, that the Centers for Disease Control and Prevention actually released a formal statement in June 2012. In an e-mail to The Huffington Post, agency spokesman David Daigle wrote:

“CDC does not know of a virus or condition that would reanimate the dead (or one that would present zombie-like symptoms).”

AMC Networks Inc (NASDAQ:AMCX)

AMC Networks Inc (NASDAQ:AMCX) is certainly excited. The only cable network in history to win the Emmy Award for Outstanding Drama Series four years in a row, AMC Networks Inc (NASDAQ:AMCX) certainly didn’t need to be woken from the dead, but it will certainly welcome the zombie invasion nonetheless. Crediting its performance largely to the success of The Walking Dead, AMC Networks Inc (NASDAQ:AMCX) reported a full year 2012 net revenue increase of 13.9% to $1.3 billion and an operating income increase of 11.1% to $363 million.

Is The Walking Dead really that popular? Yes, it really is. The season three premiere logged 10.9 million viewers, and just a few months later, the mid-season three premiere logged 12.3 million viewers (the most watched episode in the show’s history.)

But, more importantly than that, the mid-season three premiere had 7.7 million viewers in the coveted 18-to-49 year-old demographic, making it the highest rated telecast in basic cable history for that age bracket. I guess I shouldn’t be so embarrassed anymore to confess that I’m a huge fan of the show.

There’s no suggestion that the show is slowing down. Production for season four begins on May 6, and there’s still plenty of room to run after that. The series is based on a comic book of the same name, which first appeared in 2003. Fans of the comic know that the show deviates from the plot lines of the comics, availing the show’s producers to proceed in a variety of directions.

The movies are also dying to get involved

Hoping that the zombie craze will translate to the silver screen, Viacom, Inc. (NASDAQ:VIAB) and its subsidiary, Paramount Pictures, have invested more than $170 million in World War Z. Adapted from the novel of the same name, World War Z chronicles the attempts of an U.N. worker to stop a zombie outbreak.

Viacom, Inc. (NASDAQ:VIAB) needs the zombies to bring the filmed entertainment division back to life. For the quarter ending Dec. 31, 2012, Viacom saw a total revenue decrease of 16% to $3.3 billion. The filmed entertainment segment experienced a revenue decrease of 37% to $975 million. In addition, worldwide theatrical revenue fell 42% to $328 million.

The film is scheduled for a June 21 release, and it has had its share of celebrities surrounding it. Representing Brad Pitt’s foray into the undead genre, the film has garnered attention from other big name actors: Ed Harris and Bryan Cranston, who were both considered for Pitt’s role but who had to drop out due to scheduling conflicts.

How hopeful is Viacom that the zombies will triumph? Max Brooks, author of the book, revealed earlier this year that his first book, The Zombie Survival Guide, and a second film have been optioned as potential follow-ups to World War Z.

What else has been infected?

Video games– that’s what. This should be no surprise, though. One of the most successful video game franchises ever is the zombie epic Resident Evil, created in 1996 by the Japanese video game company Capcom. But, it’s lived much longer than that. It has led to over 20 related video games, live action and animated films, novel adaptations, and comic books. It is estimated that the films alone have earned close to $1 billion.

Currently, video game publisher Activision Blizzard, Inc. (NASDAQ:ATVI) is making an effort to capitalize on the undead phenomenon. The most recent offering in its Call of Duty series, Black Ops II, features a mode in which the player finds himself in a world overrun by zombies.

In fact, this is the third game from the series to feature a Zombie mode, and most people don’t believe this will be the last. According to Activision, Black Ops 2 brought in $500 million in worldwide sales within 24 hours of its release, and it was the first video game in history to make $1 billion in fifteen days after its release.

Activision Blizzard, Inc. (NASDAQ:ATVI) hasn’t stopped there. On March 19, it released The Walking Dead: Survival Instinct. The game, which features two main characters from the tv series, Merle and Daryl, is a prequel to the first season of the television series. Although initial reviews of the game have been mixed, Activision has proven itself as a dominant force in the video gaming world. And, with so many characters and plots to explore, there is no reason to suggest that Activision couldn’t redeem itself in another Walking Dead offering.

Will you profit from the apocalypse?

The multi-million dollar, zombie genre has come along way from George A. Romero’s 1968 cult-classic, Night of the Living Dead, which was filmed on a $114,000 budget. Whether it’s television, movies, or video games, the zombies have invaded, and investors should take notice of this alternative play in the entertainment sector. If Resident Evil has taught us anything, it’s that The Walking Dead franchise has lots of ways to live on.

The article How The Undead Can Breathe Life into Investors’ Portfolios originally appeared on Fool.com and is written by Scott Levine.

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