Why AMC's struggles with 'The Walking Dead' could be a warning shot for TV

AMC has built its recent reputation on high-quality dramas like "Breaking Bad," "Mad Men," and "The Walking Dead."

But that could be its big weakness, according to Pacific Crest analysts Andy Hargreaves and Evan Wingren. The analysts recently spoke to a slew of investors about AMC's prospects, which were largely negative, they wrote in a note on Monday.

"Most believed that near-term estimates are too high, largely due to 'Fear The Walking Dead' underperformance," the analysts wrote. "The explosion in serialized drama production has somewhat commoditized the genre."

AMC pioneered a winning TV genre, but now everyone else has rushed in, and the company could have a hard time maintaining its edge.

The analysts wrote that "Fear of the Walking Dead" had "clearly underperformed company expectations," and that advertising woes would follow. Expectations for "The Walking Dead" seem to be further declines as well, though not to the extent of its spinoff, according to Pacific Crest.

But AMC remains committed. "Despite increased competition, AMC believes its focus on high-quality serialized dramas remains the best approach for future success," the analysts wrote, based on conversations with management.

And AMC might not be the only company that struggles moving forward. "Investors generally held that AMC is the canary in the coal mine for the serialized drama sector, and that margin compression is the most likely outcome for it and its competitors."

In plain English: It's going to be a lot harder to make money off great serialized dramas moving forward. You can blame AMC, FX, HBO, Showtime, Netflix, and on and on.