AMC Networks is preparing a round of layoffs that will see its staff reduced by around 20 percent, according to a report.
On Tuesday, the Wall Street Journal said the layoffs would primarily impact positions in the United States. AMC Networks has around 1,000 employees, according to the company.
A memo circulated to employees and reported by the Journal said the reduction in headcount was intended to “conserve resources.” It came the same day that AMC Networks’ chief executive, Christina Spade, resigned from the company after less than three months on the job.
Like other media companies, AMC Networks has embraced the digital landscape as domestic television viewers switch away from expensive cable and satellite packages for cheaper, streaming-only options. AMC Networks is one of the few media companies to offer a direct-to-consumer streaming service — AMC Plus — that incorporates live feeds of the same channels that are available on cable.
AMC Networks has attempted to leverage its popular cable television dramas in an effort to build its streaming service. During the most-recent seasons of its hit franchise “The Walking Dead,” fans were offered early access to new episodes before they aired on AMC.
But AMC Networks has lagged behind other media companies like Paramount Global, the Walt Disney Company, Comcast’s NBC Universal and Warner Bros Discovery in the direct-to-consumer streaming area. While AMC Plus is offered both domestically and internationally, it has yet to see the kind of growth momentum that its competitors have over a shorter time frame.
During its most-recent financial quarter, AMC Networks said it has more than 11 million global streaming subscribers, which also include customers of its Shudder, Sundance Now, HiDive and ALLBLK services. The company has never revealed subscriber data specific to AMC Plus, but executives have affirmed a target of 20 million to 25 million streaming subscribers by 2025.
In a memo cited by the Journal on Tuesday, AMC Networks Chairman James Dolan admitted the company’s streaming service were not covering revenue losses from cord-cutting.
“It was our belief that cord cutting losses would be offset by gains in streaming,” Dolan said, according to the Journal. “This has not been the case.”
In addition to the flagship AMC channel, AMC Networks also programs IFC, We TV and Sundance. In the United States, AMC Networks is the domestic licensor of the BBC brand; it programs BBC America — which, in recent years, has moved farther away from British programming in favor of American re-runs — and distributes a U.S. variant of BBC World News to cable and satellite systems.
Live versions of those channels are available on AMC Plus, as well as the cable network’s portfolio of hit dramas, including “Mad Men,” “Breaking Bad” and the spin-off “Better Call Saul.” Those serial programs attracted a mainstream audience after AMC licensed the shows to streaming service Netflix; as streamers found the shows and became hooked on them, they naturally gravitated to the cable channel to watch new episodes.
The same strategy hasn’t yielded much in the way of results for AMC Plus, something Dolan noted in his memo.
“The mechanisms for the monetization of content are in disarray,” he said.
Less clear is how AMC Networks plans to reverse course. But the problem the company faces is not unique to the service: While Disney, Warner Bros Discovery, Comcast and others have grown their services, it has come at a significant financial cost. Virtually none of those services are profitable, and media companies are now starting to grapple with the realization that they may have overspent on content that has failed to yield a sizable return.
At Disney, the company’s streaming strategy was largely seen as one element behind a recent shake-up that saw the departure of CEO Robert Chapek and the return of former CEO Bob Iger. On Monday, Iger announced his company would move forward with “organizational and operational changes,” and said Disney would not pursue acquisitions in the future (one day later, Disney acquired its remaining stake in streaming tech company BAMTech for $900 million, according to reports).
In its most-recent financial earnings report, Disney revealed its flagship streaming service Disney Plus had grown to over 162 million subscribers. It also revealed that its direct-to-consumer streaming operations — which also include the general entertainment service Hulu, sports-centric ESPN Plus and international package Hotstar — cost the company $1.5 billion.