AMC Networks, the cable network and streaming company that operates companies including AMC, AMC+, IFC, BBC America, Acorn TV and Shudder, reported a 5% drop in U.S. ad revenue in the second quarter but said its Streaming subscribers grew. 10.8 million at the end of June, up from 9.5 million at the end of March and above forecast.
Earlier in the year, the company predicted it would add between 400,000 and 500,000 streaming subscribers in the second quarter. Earlier on Friday, the company said the above-expected growth is due to the launch of the premium streaming package AMC+ in Spain and a strong content offering.
AMC’s streaming strategy focuses on AMC+ and niche services, which it says have lower content costs than major entertainment services but attract loyal subscribers. In May, the company announced plans to raise the prices of its AcornTV and ALLBLK streaming services by $1.
Among the company’s main content in the second quarter was the final season You better call Saul. and the second half of season 7 fear of the undead.
US ad revenue fell to $202 million amid “lower linear rankings”, partially offset by “higher AMC Originals print, price and digital growth”.
AMC Networks’ second-quarter total revenue declined 4% to $738 million despite a 20% increase in streaming revenue, or 36% on a normalized basis, which was more than offset by “various impacts climatic conditions in the quarter, including the expectation of a smaller affiliate. content licensing and unfavorable advertising and currency conversion revenue.”
Quarterly operating income increased 125 percent to $153 million after the prior-year quarter included losses and other charges of $143 million “related to a single litigation-related settlement.” However, adjusted operating profit dropped 22% to $196 million due to “time to ramp up content and marketing investments to support streaming and subscriber revenue growth.”
AMC is led by interim CEO Matt Blank, but the company said on Friday that current COO and CFO Christina Spade will take over as CEO in early September.
In a morning analyst call, Spade, in his role as financial director, reported that AMC Networks has continued to expand its gender transmission services with a continuous growth of subscribers while managing legacy cable networks, even when the transmission space faces against.
He added that the company is expanding internationally in a disciplined manner. AMC will work with local partners to quickly enter new markets, such as AMC+’s entry into Spain with partners Orange Vodafone, where the AMC channel will be part of a thin package for pay TV, broadband and some mobile customers, and Amazon Prime for video channels.
International expansion is critical for AMC Networks to achieve its long-term orientation of 20-25 million total subscribers by 2025. “This is an attractive distribution mix for us and demonstrates our ability to enter new markets carefully, with a minimal investment and value. Innovation and distribution flexibility”, added Spade on entering the market in Spain.
Going forward, Amazon and Apple will become AMC’s primary international distribution partners as it builds its brand presence with existing cable channels and expands into Latin America. “We are really starting from a position of maximizing the results of our distribution partnerships. And then we have a technical stack… which is transferable so that our current direct-to-consumer offering can also be implemented quite quickly,” said Spade.
Source: Hollywood Reporter
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