AMC Networks is leaning into a strategy that gives its direct-to-consumer streaming service AMC Plus greater visibility by syndicating certain elements of its content library to other streaming services, executives confirmed on Friday.
The evolution of the plan follows what executives considered a successful test run between AMC Networks and Warner Bros Discovery (WBD) last year, during which content from AMC Plus was offered through WBD-owned streaming service Max for a little over a month.
During the company’s third financial quarter (Q3) of the year, AMC Networks built on those partnerships, launching “The AMC Networks” on Netflix with past episodes of 13 AMC series. It also swapped content with Amazon, sending nine of it shows to MGM Plus while receiving nine MGM Plus shows for AMC Plus in return.
The partnerships helped spur interest in AMC Plus, which offers current and past AMC series like “The Walking Dead,” “Dark Winds,” “Mad Men” and “Gangs of London,” along with shows and films from brands like Shudder, Sundance Now, BBC America and IFC Films Unlimited.
During Q3, the company counted 11.8 million streaming subscribers, up 5 percent compared to the 11.1 million subscribers AMC had one year ago. Most of those customers are believed to be paying for AMC Plus rather than a smaller service like Shudder, which AMC continues to sell; AMC doesn’t report independent subscriber figures for its various direct-to-consumer products.
AMC Networks said its direct-to-consumer business earned $152 million in revenue during Q3, up 7 percent compared to the same time period last year, with income rising due to a price adjustment on AMC Plus and higher subscriber uptake.
The gains in streaming couldn’t fully offset losses from AMC’s traditional cable networks business: The company earned $316 million in subscription revenue during Q3, down 5 percent on a year-over basis, weighed by ongoing churn in the cable and satellite industry, which chips away at the company’s income from distribution fees.
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Cable and satellite cancellations also impacted AMC’s advertising revenue, which dropped 10 percent to $133 million. The company introduced an ad-supported tier of AMC Plus during Q3, and while that part of the business continues to gain momentum, it wasn’t enough to offset losses from the cable networks.
But it might one day, as AMC Networks continues to reach new distribution agreements with pay TV providers. Charter, which offers service under the Spectrum brand, and Philo renewed their distribution agreements with AMC this year, and the contracts now allow each company to offer their subscribers free access to the ad-supported tier of AMC Plus, which could lead to much-higher interest among companies that are shifting their advertising spend away from traditional TV networks toward connected TV channels and platforms.
AMC also continues to monetize its content through free, ad-supported streaming TV (FAST) channels — it operates nearly a dozen of them — and recently inked a distribution agreement to make some of its FAST channels available through Amazon-owned platforms.
Content licensing continues to be a big business for AMC as well: The company earned $81 million from licensing shows and movies to other networks and services, including Apple and Netflix, which increased that line item by 31 percent.
Overall, domestic operating revenue dipped 2 percent to $530 million, while AMC’s international business fell 24 percent to $74 million.
