Advertising Downturn Keeps AMC Networks From Hitting Q2 Revenue Target
AMC Networks posted a 17% decrease in domestic advertising revenue in the second quarter, preventing the company from meeting Wall Street revenue expectations.
Total revenue slipped 8% from the same quarter a year ago, coming in at $679 million. The company blamed the ad downturn as well as lower affiliate and 25/7 Media production services revenue.
The drop in advertising revenue resulted from “anticipated linear ratings declines, softness in the ad market and fewer original programming episodes within the quarter, partly offset by digital and advanced advertising revenue growth,” the company said in its earnings release.
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Streaming revenue increased 13% as the total number of subscribers climbed 6% year-over-year to 11 million. That tally declined by 200,000 from the first quarter, however, a drop the company chalked up to “our continued focus on higher value subscribers and promotional roll-off.” Another 300,000 subscribers were dropped from the total because of a change during the quarter to the way the company defines a streaming subscriber. It said it no longer includes “estimated subscriber conversions” in the total.
Unlike media rivals trying to mount general entertainment services at scale, AMC Networks operates a portfolio of niche services like AMC+, AcornTV, Shudder and Allblk.
Wall Street analysts had expected total quarterly revenue of $706.5 million and earnings of $1.60.
The company has been overhauling its operations over the past year-plus as cord-cutting, ad market softness and uncertainty about streaming economics have all created major challenges. Kristin Dolan, a member of the media family that controls the shares in AMC Networks, was appointed CEO earlier this year after a two-year period when former Showtime chief Matt Blank ran the company on an interim basis and former CFO Christina Spade held the top job for just three months. About 20% of U.S. employees were laid off as Dolan took the helm.
“Six months into my tenure as CEO, I am impressed with our team’s ability to do what this company has
always done best: produce high-quality content and make it available to viewers across an expanding array of platforms,” Dolan said in the earnings release. “Even during a period of industrywide uncertainty and change, we are seeing the benefits of our strategy play out in our financial results.”
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