AMC Networks hopes to mark a new beginning in the coming year as it prepares for some very big goodbyes.
AMC is preparing to leverage the marketing platform provided by three buzzy series finales — AMC’s “The Walking Dead” and “Better Call Saul” and BBC America’s “Killing Eve” — to drive awareness and subscribers to its growing suite of streaming services, from drama-centric AMC Plus and SundanceNow to the niche-targeted Acorn TV, ALLBLK and Shudder.
The company aims to gradually remake itself from a cable TV programmer to a content producer and platform operator, supplying its streaming services with high-end shows. The sunsetting of the company’s three biggest series franchises in the same year is a turn-the-page moment at a time of massive transformation in the broader industry. AMC has no choice but to try to capitalize on the farewells of its linear tentpoles.
Matt Blank, the industry veteran who joined AMC Networks as interim CEO in August, aims to harness the financial foundation provided by AMC Networks’ core legacy linear cable channels — AMC, SundanceTV, BBC America, IFC and WeTV – to invest in direct-to-consumer streaming and original content production.
The linear pay TV market has been transformed by cord-cutting and the rise of direct-to-consumer options for TV services. But for the foreseeable future, widely distributed channels such as AMC, SundanceTV and BBC America will still deliver solid, if slowly diminishing, returns, from contractually guaranteed affiliate fees from MVPDs and advertising revenue.
“It’s not rocket science. This is a company that is still delivering a great performance,” Blank told Variety in his first interview since taking the reins from Josh Sapan, who segued to the vice chairman role after more than 25 years at the helm.
Blank was part of the team that build HBO in the 1970s and ‘80,s and then he did the same at Showtime over 30 years, including 20 as CEO. His startup experience from an earlier generation of new media has come in handy in his work as a board member of such outfits as CuriosityStream and Cumulus Media and in his previous role as an advisor to Raine Group.
Blank said he’s spent a lot of time looking at media from the “30,000-foot level” in recent years. “We need to try to kind of bring it down to reality a bit,” he said. “Streaming is the future for us. We know that. But we have a very strong traditional business model that is still working really well.”
AMC Networks has been seen as a prime acquisition target for years because of its modest size and market cap in comparison to Big Media and Big Tech competitors. Sapan’s move out of the C-suite was seen as a signal that the company, with roots in the Dolan family’s cable empire, was ready to begin a sale process. Blank says flatly that he had no interest in serving as a caretaker for a transaction.
“I’m here to create more shareholder value. The way to do that is take advantage of our strong traditional businesses, keep them going to super-charge our streaming strategy,” Blank said. “If we create more shareholder value, we’ll have the ability to do more to attract the best people to come work for us.”
Blank conceded that AMC is caught in a speculatory swirl, but he recalled from his early Showtime days how important it was to tune out the what-ifs and focus on the programming, marketing and distribution tasks at hand.
“I can’t come to work every morning and say, ‘Are we going to sell this company?’ I can come in and say, ‘How do we drive streaming subs up next month? How do we get our shows on the air earlier?’ When people would ask me, ‘How can you compete with HBO?’ I’d say, ‘I can’t control what they do, I can only control what we do.'”
Blank credited Sapan and his team with focusing AMC’s content of the future on distinct verticals with fervent fan bases, like horror, fantasy, Black audiences and British drama buffs. AMC can’t afford to spend tens of billions of dollars on content like its larger rivals, but in Blank’s view, it doesn’t have to.
“We’re not trying to play the game that all the other big players are playing,” Blank said. “We’ve got a targeted business with a lower cost structure and a more loyal customer base. It gives us an opportunity to curate a product directly for the needs of those users.”
The streaming wars is being fought among giants, but Blank is not the only one who thinks AMC Networks has a shot. The company raised its full-year revenue guidance after reporting third-quarter earnings last month. MoffettNathanson Research, which had been bearish on AMC Networks’ chances, was supportive of Blank’s vision in a research note.
“Taken together with the company’s laser-focus on unit economics and building a sustainable business, we see a clear (and realistic) path forward for AMC Networks,” MoffettNathanson analyst Robert Fishman wrote. “And while the company may not be able to achieve the same margins in its end state as it once did at the height of the cable networks business, AMC Networks was under-earning by so much relative to its peers that it seems well-positioned to make a successful streaming pivot.”
AMC Networks shares (not to be confused with exhibitor AMC Entertainment) have mostly been on the downside in the second half of this year. Shares were down 3% at the close of trading Thursday to $38.84.
AMC is now tracking carefully the ROI on every dollar spent on original programming for its digital and linear platforms, which are increasingly sharing content assets.
“Small additions to our portfolio of [original streaming] content make a big difference to our user base. We don’t have to spend what others spend on an episodic basis,” Blank said. “That model has not been decimated the way a lot of others have.”
Building out the streaming eco-system within AMC Networks’ is a top priority for Blank. The COVID-induced delays in production in 2020 and 2021 have added up to a blockbuster 2022 for AMC Networks, like many others in entertainment.
“Next year we’ll have more new stuff on the air than we’ve ever had, as well as some massive finales,” Blank said.
There’s no word yet on finale dates for “Killing Eve” or “Better Call Saul.” “Walking Dead” will see another batch of final season episodes begin on Feb. 20, but AMC has not specified when the final batch of eight episodes will debut.
The AMC Networks team is plotting marketing and programming strategies for making the most of the final season episodes coming to AMC and BBC America.
“There is a discipline to our thinking that connects these consumer groups we target,” Blank said. “How we go to market with it allows us to play our game.”
(Pictured: Matt Blank)