AMC Networks CEO: Early ‘Rectify’ Access Driving Sundance Channel Monetization9 May, 2013 By: Erik Gruenwedel
AMC Networks has been airing episodes of Sundance Channel’s original series in select movie theaters, cable VOD services and Netflix Canada since its March 14 broadcast premiere — a strategy the premium TV platform intends to expand, said CEO Josh Sapan.
Speaking May 9 in a fiscal call, Sapan said that with the success of “Top of the Lake” and “Rectify,” steps are being taken to better monetize original programming than through a conventional ad-supported business model.
“Rectify” is about a man, Daniel, who is released from death row after 19 years following an apparent wrongful conviction. As he struggles to adapt to his new life, Daniel’s homecoming reignites the fears of a small town and threatens to shatter his family’s fragile peace.
Netflix is streaming separate episodes (no full-season availability) following the domestic TV broadcast in Canada only.
“We tried to get people to watch and refer their friends and others to it and we think there’s been some success,” Sapan said. “We sort of ran that SVOD playbook in advance of season 1.”
Meanwhile, AMC reported first-quarter (ended March 31) net income of $62 million, compared with $43 million in the first quarter of 2012. Revenue increased 17% to $382 million.
AMC, which includes premium TV channels AMC (original series “The Walking Dead,” “Breaking Bad,” “Portlandia”), WE.tv, Sundance Channel (“Top of the Lake,” and “Rectify”) and IFC, said the revenue growth was due in part to the increase in digital distribution associated with the SVOD release of IFC programming on Netflix, as well as electronic sellthrough principally related to AMC's scripted originals.
Interestingly, Sapan said AMC doesn’t have the international scale to justify acquiring its own programming for digital distribution on its own platforms.
“We don't have enough breadth to be necessarily be the buyer of our own shows and the prices are too good to pass up the sale to a third-party [i.e. Netflix],” Sapan said. “So we think that content investment is key, and we think it is truly important over the near and mid and long term.”
Separately, AMC reported a $175 million payment as part of $700 million legal settlement with Dish Network regarding the failed Voom HD platform. AMC expected to realize another $133 million payment during the current second quarter.
AMC lost 200,000 subscribers during the period to finish with 98.7 million. Meanwhile, WE.tv gained 300,000 subs to close at 81.8 million; IFC gained 700,000 subs to close at 70.3 million, and Sundance gained 100,000 subs to close at 50.3 million, according to Nielsen data.