Industry Insider: The Evolution AMC Networks In The Q2 Earnings Call
AMC Networks held their 2nd Quarter Earnings Call on August 4th, 2023. In consideration to this date, all other information post call will not be included in the debrief of Q2’s assessment. With Kristin Dolan’s recently taking on the mantle of CEO, she follows the introductions with the prepared remarks on AMC’s current status in the industry. AMC has a progressive 2023 thus far, and Q2 has prompted considerable change for the company as a whole.
This transformation most notably came during the Disney & Hulu agreement made with AMC.
This arrangement allowed for accelerated future cash payments that were originally expected to be paid later in 2023. So, with this advancement, AMC saw an approximate $90 million net benefit for the second quarter’s free cash flow. To compare, the previous year’s net benefit of free cash flow resulted in $50 million for the full year.
Explicitly, the terms of this agreement were to assist AMC in re-securing their streaming rights for a multitude of titles such as: Fear the Walking Dead, Killing Eve, Brockmire, The Terror, The Son, Preacher, Lodge 49, among others. The streaming platform AMC+ has served as a breeding ground of opportunity. Currently, AMC+ has launched on all major MVPD platforms and is now available to Spectrum TV customers. With this accessibility, AMC+ subscribers will not only be able to the past catalog but also the exclusive content upon release.
The Walking Dead: Dead City had a successful run in its first season delivering over two million linear viewers for the season. Kirstin also mentioned that the series was named the number one new cable drama premier for 2023 in the genre’s key demographic. The spin-off was also the number one season premier in all of AMC’s television history. The entire Walking Dead franchise has had a chance to revolutionize AMC’s content with the introduction of The Walking Dead: Daryl Dixon and The Walking Dead: The Ones Who Live. As the franchise received immense support, both the Daryl and Dead City spinoffs have been renewed for a second season during San Diego’s Comic Con. AMC+ will continue to prioritize their commercial partners by beginning the implementation of an ad- supported subscription model in October.
The corporation saw prominent academy support and praise with 8 Emmy nominations for the series Better Call Saul. This series along with Interview with the Vampire, Lucky Hank, and Documentary Now! were nominated for 12 Hollywood Critics Association nominations. AMC has seen success with their subsidiaries in IFC Films with the film Blackberry and We TV network, with series such as Mama June: Not to Hot and the Love After Lockup franchise.
Similarly to the rest of the entertainment industry, AMC has also seen the effects of both the SAG-AFTRA and WGA strikes. However, Kristin Dolan reassures during this call that, “We completed production of these three Walking Dead extensions before the recent Screen Actor Guild strike and work stoppage.” AMC Networks claims to have a plethora of completed series that will be issued out for public consumption via the corporation’s platforms throughout the remainder of this year and “well into 2024”. Although AMC’s commercial success in 2023 has been undeniable, it is hard for the current state of the industry and economy to hold zero effect. The overall,
As expected, advertising revenue decreased by 6 percent to $20 million as a reflection of the cancellation of content from AMC’s 25/7 Media and other unprofitable channels. Patrick O’Connell, AMC’s CFO, emphasizes that those aspects also have an impact on the international segment. The international segment also saw a decrease in revenue by 21 percent, which amounts to around $99 million. Yet, total cash content broke into the $1.1 billion barrier, facilitating a new expectation for AMC’s investment to continue to reach these heights year over year.
Patrick simplifies the corporation's financial approach to three principal factors, with the primary goal of maximizing the shareholder value in order to promote consistency during these transition phases at the company.
Maximizing the monetization of all content across all available platforms and avenues.
Operating efficiently, poignantly highlighting investments to support the business.
Being carefully and highly disciplined in allocating the company’s capital.
Of course, these are all relative to the preservation of the brand’s value and affinity. As it is presented to be an essential part of AMC’s structure, it fosters relationships with fandoms within the AMC’s community by prioritizing exclusive content. As highlighted by Kristin when she shared the current scope of media, “...we see the impact of generations of new viewers discovering and being entertained by shows years or even decades after they first appear. More and more today, a premier is what happens when someone decides to watch something for the first time, not when it first appears.” Accumulating each of these perspectives brings about the potential of AMC’s trajectory for 2024. 2024, according to the corporation, will be bigger and better with time and adjustment to new leadership, the soft ad market, and union strikes.
