- AMC Network’s advertising revenue fell 23% in the fourth quarter, resulting in a 30% drop in total revenue to $679 million.
- Streaming revenue increased 4% to $145 million, driven by a stronger subscriber base and a 3% increase in streaming subscribers.
- Dip in ad revenues was attributed to anticipated linear ratings declines, a challenging ad market, and fewer original programming episodes.
- Total operating losses narrowed to $11 million, and free cash flow decreased to $66 million.
- Domestic distribution and other revenues decreased 35% to $423 million.
- Content licensing revenues fell 68% to $96 million due to timing and availability of deliveries.
- Subscription revenues were down 8% due to declines in the linear subscriber universe, partially offset by streaming revenue growth.
- Affiliate revenues declined 16% due to basic subscriber declines.
- AMC Networks CEO, Kristen Dolan, expressed optimism about the company’s progress and growth in streaming revenue and subscriber base.
AMC Networks, the popular entertainment company, reported a 23% drop in advertising revenue for the fourth quarter, resulting in a 30% decrease in total revenue. The company’s stock is down over 8% in pre-market trade after the disappointing numbers. However, AMC Networks also saw growth in streaming revenue and an increase in streaming subscribers, indicating a shift in consumer preferences towards digital content.
Advertising Revenues Decline
The decline in ad revenues can be attributed to several factors. Firstly, AMC Networks anticipated a decline in linear ratings, which led to lower demand for advertising slots. Secondly, the company faced a challenging ad market, with advertisers cutting back on spending due to economic uncertainties. Lastly, there were fewer original programming episodes aired during the quarter, which impacted ad revenue. However, the dip in ad revenues was partly offset by growth in digital and advanced advertising revenue.
Growth in Streaming Revenue
Despite the decline in ad revenues, AMC Networks experienced a 4% increase in streaming revenue. This growth was driven by a stronger subscriber base and a 3% increase in streaming subscribers from the previous quarter. The company’s streaming platform continues to attract viewers who prefer to consume content on-demand, highlighting the shift in consumer behavior towards digital streaming services.
AMC Networks reported total operating losses of $11 million, narrowing the losses compared to the previous year. However, free cash flow decreased sharply to $66 million from $134 million in the 2022 fourth quarter. The domestic business recorded a $42 million impairment charge for the BBCA joint venture. Additionally, domestic distribution and other revenues decreased by 35% to $423 million.
Challenges in Content Licensing and Subscription Revenues
Content licensing revenues fell significantly by 68% to $96 million. This decline was primarily due to the timing and availability of deliveries in the period. The previous year included deliveries of AMC Studios-produced series and early delivery of certain episodes of popular shows like “The Walking Dead” and “Fear the Walking Dead.” Subscription revenues were also down by 8% due to declines in the linear subscriber universe, although this was partially offset by growth in streaming revenue.
Despite the challenges faced in ad revenues and content licensing, AMC Networks remains optimistic about its growth prospects. The company’s focus on programming, partnerships, and profitability has resulted in increased streaming revenue and a stronger subscriber base. CEO Kristen Dolan expressed her pride in the progress made by the company in a fast-changing environment. With the continued expansion of its streaming platform and innovative engagement strategies, AMC Networks aims to position itself as a frontrunner in the evolving entertainment industry.