With Wall Street fretting about mounting indications that pay TV is losing subscribers, AMC Networks CEO Josh Sapan urged analysts today to look at his company as a content producer — as well as an owner of channels.
Exhibit A is the recent deal AMC Studios made to produce new content to be shown exclusively in the U.S. to Charter Communication’s Spectrum cable customers.
“That’s good business for us,” Sapan said in a quarterly call following AMC’s earnings release this morning.
He acknowledges, though, that it’s still early for unconventional deals such as the one with Charter. “I don’t know where that whole subject will end up,” he says. Platforms in the UK and Europe offer proprietary content “to distinguish themselves from their competition…Charter is probably thinking the same thing.”
AMC’s expansion into studio and TV production “will make us important for the ecosystem,” Sapan adds. “Our diversification with a focus on key content is ultimately the way for us to grow, and grow sustainably.”
The company also wants to grow by having its channels appear on new, live streaming services. AMC’s on YouTube TV, Sling TV, DirecTV Now, and Sony’s PlayStation Vue — but didn’t make the initial cut for Hulu With Live TV, unveiled yesterday.
“Deals have a few key components: They have term, they have positioning, and they have rate,” Sapan says. “We did not come to terms with Hulu as of yesterday.”
He seems to hope that will change: “You want to have the best stuff, and you want to have the best stuff as subscribers connect and disconnect and as you compete.” Hulu has “wonderful back libraries of a select number of our shows, and they don’t have the new shows, and the shows that will premiere. It’s not a complete portfolio.” Noting that “we enjoy a great relationship with Hulu,” he says that “the next phase will come.”
The CEO would not confirm a Reuters report that AMC is planning an ad-free streaming service to be made available to traditional pay TV subscribers.
Describing the news report as a “rumor,” Sapan says that “we have nothing to announce, so there is no information and there is nothing hard related to that.”
But the “speculation,” he says, is something he treats “positively” because it reflects on “the desirability of AMC TV shows.”
Although there are “pressures on linear consumption, ratings, and advertising — and we’re working through all that — there is also extraordinary demand for our TV shows.”
Sapan also remains flexible about licensing shows to subscription VOD services such as Netflix: HBO and Viacom are cutting back noting that the deals complicate relationships with traditional distributors and new live streaming services.
“SVOD does provide an opportunity for sampling,” he says. “If the quality of the material is good, it can create talk, subsequent buzz and referral. A friend will say ‘watch this show,’ and if you like it you’ll watch the new season.”
He likes to keep the option open because “we receive revenue from the syndication of our shows.” And some SVOD platforms, including Hulu, are “good to be allied with.”