Key Financial Data
- Total revenue: $561.7 million (-6.3% year-over)
- Operating income: $55.5 million (-40.7%)
- Domestic total revenue: $485.7 million (-8.4%)
- Subscription revenue: $316.2 million (no change)
- Advertising revenue: $110 million (-17%)
- Streaming subscribers: 10.4 million (+2%)
- Streaming revenue: $174 million (+14%)
- Affiliate revenue: $142 million (-12%)
- International revenue: $77.1 million (-1%)
- International streaming revenue: $48.1 million (-1%)
- International advertising revenue: $25.9 million (+1%)
AMC Networks is restructuring its global operation after announcing its latest quarterly earnings reports, which showed that streaming-related revenue is now the bigger part of its business.
The company, which operates several cable networks, has been repositioning itself as one with a stronger focus on delivering its content to streamers in the United States and around the world, while also maintaining their core cable networks business.
But, in an era of ongoing cord-cutting, AMC Networks has little to offer when it comes to appointment-viewing television. Those who still subscribe to cable or satellite largely do so to watch sports and news — AMC Networks has no sports programming, and the only news it offers is via a license with BBC News, and even that channel is available on free streaming platforms in the United States.
So, it makes sense that AMC Networks is leaning into streaming as the future of its business. And, on Friday, it released a fresh earnings report that showed that renewed focus is starting to pay off.
During its third quarter (Q3), domestic streaming revenue leapfrogged income from distribution fees charged to cable and satellite companies. Streaming-related revenue was up 14 percent to $174 million, while cable and satellite fees earned AMC Networks just $142 million, down 13 percent.
Advertising revenue clocked in at $110 million, down 27 percent, despite the fact that AMC operates an ad-supported streaming service and several free, ad-supported streaming television (FAST) channels. The company’s insistence on maintaining its cable networks business weighed down on overall revenue, which clocked in at $458.7 million, down 8.4 percent.
Stock Price
There is a strong sign that AMC Networks is wading even further into the streaming pool: During a conference call with investors, AMC CEO Kristin Dolan said the company was offering voluntary buyouts to around 5 percent of its global workforce, an effort that is intended to “ensure we have the right skills for the future.”
Where before Dolan and others had affirmed the company wasn’t willing to let go of its cable networks, now Dolan has made clear that AMC Networks is moving from “a cable networks business into a global streaming- and technology-focused company.”
The plan has been in the works for a while. During the quarter, AMC Networks renewed its distribution agreement with DIRECTV to continue offering its core cable channels in their Signature and genre-based packages, while also offering no-cost access to AMC Plus to its subscribers. DIRECTV is also now distributing six AMC FAST channels on its Internet-connected satellite and streaming boxes and through the DIRECTV app, which are still accessible if customers churn out of its pay TV service.
AMC has inked similar agreements with Charter’s Spectrum TV and Philo over the past few years, folding access to AMC Plus in with an agreement to continue carrying its networks. Philo also offers AMC’s FAST channels in its premium and subscription-free tiers.
On the FAST front, AMC renewed its agreements with Roku and Samsung to deliver its free streaming channels through their platforms, called The Roku Channel and Samsung TV Plus.
When it comes to AMC Plus, the company is leaning into Amazon’s streaming marketplace as a way to reach more prospective viewers who are already watching shows and movies through the Prime Video app. During Q3, the company worked with Amazon to launch a new bundle that offers AMC Plus, MGM Plus and Starz at a single price point — a move that benefits Amazon and Starz as much as it does AMC. The company didn’t say how many people were paying for the bundle, or whether it had any effect on its streaming subscribers.
But, it probably did: AMC Networks counted more than 10 million customers of its AMC Plus service in the United States, up 2 percent compared to last year.
