AMC Networks, the cable networks and streaming company that operates the likes of AMC, AMC+, IFC, BBC America, Acorn TV and Shudder, reported a 5 percent drop in U.S. advertising revenue in the second quarter, but said it grew its streaming subscribers in the period to end June with 10.8 million, up from 9.5 million as of the end of March and ahead of its forecast.
Earlier in the year, it had projected it would add 400,000-500,000 streaming subscribers during the second quarter. Early on Friday, the company said the better-than-expected growth was “driven by the AMC+ premium streaming bundle launch in Spain and strong content offerings.”
AMC’s streaming strategy focuses on AMC+ and niche services, which it says come with lower content costs than broad-based entertainment services, but attract loyal subscribers. In May, the company mentioned plans to increase prices of its AcornTV and ALLBLK streaming services by $1.
Among the company’s key content launches in the second quarter were the final season of Better Call Saul and the second half of season 7 of Fear the Walking Dead.
U.S. ad revenue fell to $202 million amid “lower linear ratings,” partially offset by higher “AMC Originals impressions, pricing and digital growth.”
AMC Networks’ total second-quarter revenue fell 4 percent to $738 million despite a 20 percent gain in streaming revenue, or 36 percent on a normalized basis, which was more than offset by “several timing impacts in the quarter, including expected lower affiliate, content licensing and advertising revenues, and unfavorable foreign exchange translation.”
Quarterly operating income jumped 125 percent to $153 million after the prior-year quarter included impairment and other charges of $143 million “associated with a one-time litigation-related settlement payment.” Adjusted operating income decreased 22 percent to $196 million though “due to the timing of increased investments in content and marketing to drive subscriber and streaming revenue growth.”
AMC is led by interim CEO Matt Blank, but the company said early on Friday that current COO and CFO Christina Spade would take over the CEO role in early September.
“AMC Networks delivered a solid second quarter, benefiting from strong subscriber growth for our differentiated streaming services as we execute on our strategy to super-serve passionate audiences with a curated, targeted content experience,” Blank said. “As we leverage our strong linear business, we are seeing increasing demand for our digital and advanced advertising opportunities. And our content creation strengths were on full display in the quarter, with viewership records, widespread critical acclaim for new and returning series including for Better Call Saul and Dark Winds, and Emmy Award nominations across major categories. We are building our business in a steady, disciplined and sustainable fashion, positioning ourselves for future growth and delivering shareholder value.”