AMC Networks CEO: SVOD Generates Higher Network Viewership

4 Dec, 2012 By: Erik Gruenwedel

AMC Networks is heralding subscription video-on-demand for something other than its deep pockets: viewers.

Despite the burgeoning bandwagon of media companies eager to license content to subscription video-on-demand services such as Netflix, Hulu Plus and Amazon Prime Instant Video, AMC Networks has remained on the sidelines — only inking a deal with Netflix last October.

AMC Networks, which includes AMC, IFC, Sundance Channel and WE tv, is best known for original zombie series “The Walking Dead,” in addition to “Portlandia,” “Breaking Bad,” “Hell on Wheels” and “Mad Men,” among others.

With consumers increasingly opting to time-shift television viewing, AMC CEO Josh Sapan Dec. 4 told an investor group that types of content determine whether viewers watch live or tape-delayed.

Speaking at the UBS Global Media and Communications Conference in New York, Sapan said movies are typically watched during their initial broadcast, while up to 40% of original TV series programming is viewed at a later time on demand.

“The sense of urgency and [licensing content to SVOD] more quickly, and doing it with more original programming, is greater today than it was five years ago,” Sapan said.

AMC, as policy, does not offer original content to SVOD until at least a year after its initial viewing.

“We chose to very selectively sell the content … into digital SVOD window. We think that decision seems to have been pretty good because it seems to have held up well in the tougher circumstances,” Sapan said, referring to the recent carriage fee dispute between AMC and satellite TV operator Dish Network.

Sapan said delayed SVOD access to programming has led consumers to sample content on Netflix and then return to the network through their cable, satellite or telecommunications provider in greater numbers. Characterizing SVOD license revenue as incremental and new, the CEO said that migration of online viewers to the linear channel has led viewers to discovering AMC’s other content (notably reality TV) and developing fan bases.

“Importantly, we’ve reached new audiences we otherwise wouldn’t have,” he said. “Who knew that $8 a month would be a price for this whole abundance of television on digital distribution? I think there will be a lot more of that to come.”

Sapan said transactional VOD and electronic sellthrough of AMC programming remain AMC’s largest revenue growth potentials going forward. He said that revenue could be impacted going forward with the influx of additional players and greater adoption of TV Everywhere platforms launched by multichannel video distributors.

“We think TV Everywhere is the wonderful evolution of what cable TV used to be,” the CEO said, adding that it would require a bit of a balancing act with SVOD. “We will support it. We have been contemplating it for sometime.”