AMC Networks found a silver lining in the otherwise dismal end to the first quarter as pandemic shutdowns took a heavy toll.
In releasing its first quarter earnings Tuesday, AMC Networks said subscriptions and viewership for its growing suite of niche streaming outlets — Sundance Now, Acorn, Shudder and Urban Movie Channel — have increased significantly amid the lockdown conditions. The gains have been substantial enough that AMC Networks said it would reach the 3.5 million-4 million subscriber threshold by year’s end rather than by 2022 as previously forecast.
“They are growing a nice trajectory with sensible economics,” said AMC Networks president-CEO Josh Sapan. He also sees potential for growth outside the U.S. “The overseas marketing opportunities for targeted SVOD is significant particularly over time,” Sapan said.
For the quarter, AMC Networks delivered revenue of $734 million (down 6.4% from the year-ago quarter) and adjusted operating income of $222 million (down 24%). The national networks unit — home to AMC, Sundance TV, IFC, We TV, BBC America and BBC World News — took an 8% hit in revenue to $567 million and an 11% hit in advertising revenue, which fell to $213 million.
Some of the advertising decline was chalked up to differences in the year-to-year airdates for the latest season of AMC’s biggest moneymaker, “The Walking Dead.” The shutdown of production forced AMC to delay the season 10 finale of “Walking Dead,” which was set to air April 12 and thus is sure to have an impact on AMC’s second quarter results. The disruption also forced AMC delay the planned debut of the latest spinoff series “The Walking Dead: World Beyond,” which was scheduled to bow in tandem with the season finale. Both of those programs are now targeted to air in the fourth quarter.
During the conference call, AMC Networks executives emphasized the company has a strong balance sheet and plenty of liquidity to draw on if necessary, including $700 million in cash on its books and no big debt payments due this year or next.
AMC Networks shares have been battered along with the rest of the media sector amid the wild swings of the stock market in recent weeks. Despite the expected slide in performance for the quarter, AMC shares were up 2% early trading Tuesday amid the broader market upswing.
Sapan told analysts that the company’s focus at present is investing in distinctive content and finding new routes for monetization, on and off of AMC’s own airwaves. He promised to be “surgical about where we spend money on linear TV” and cited advanced advertising initiatives designed to boost sales “in conventional and novel ways so our core enterprise remains profitable.”
(Pictured: “The Walking Dead”)