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AMC Networks Ups Q3 Digital Distribution Growing Pains

2 Nov, 2017 By: Erik Gruenwedel

AMC Networks Nov. 2 reported third-quarter (ended Sept. 30) “international and other” segment operating loss of $19 million, up $2 million from operating loss of $17 million during the previous-year period. Revenue decreased $1 million to $113 million.

AMC Networks, which includes AMC, WE.tv, BBC America, IFC, Sundance TV and television production business AMC Studios, may largely be known for Zombie hit “The Walking Dead,” now in its eighth season.

The multichannel distributor is also involved in several over-the-top video services, including Sundance Now, horror service Shudder, Acorn TV, Urban Movie Channel (through equity stake in RLJ Entertainment), BritBox and AMC Premiere — all part of the “international and other” accounting segment.

Speaking on the fiscal call, CEO Josh Sapan said OTT video remains a worthy work in progress. He said distribution business models ranging in price from $4.99 (OTT) to part of a pay-TV bundle “influence the manner and approach” AMC takes toward content production and distribution to consumers. 

“We like them all,” Sapan said. “They're growing well. People are signing up. We're managing those businesses and getting better at that. And so, we see that as a very significant part of our future potentially, not only domestically but globally, as our reservoir of content increases and increases.

The “international and other” segment also includes AMC Networks International, the company’s international programming business, and independent film distribution business IFC Films.

Segment revenue for nine months ended Sept. 30 decreased $11 million to $330 million, and operating loss increased $36 million to a loss of $69 million, compared with the prior-year period.

In addition to “Waking Dead” and spin-off “Fear the Walking Dead,” other original content includes “Hap and Leonard,” “Lodge 49,” “Growing Up Hip Hop” and “Brockmire.”

Meanwhile, overall AMC Networks revenue increased 2.1% to $648 million, with operating income ballooning 31% to $153 million from a year ago.

“AMC Networks is better positioned than ever to successfully navigate evolving changes in consumer viewing habits,” Sapan said. “One of our biggest strengths relates to what we think is a preferred position we hold within the evolving and diversifying cable ecosystem.”

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