AMC Networks Chief Matt Blank Finds It “Funny” That Netflix And Large Rivals Think Advertising “Solves All Problems” In Streaming

Matt Blank, interim CEO of AMC Networks, said the company has “no plans” for ad-supported tiers of its family of targeted streaming services including Shudder, Acorn TV and AMC+.

“If the business changes,” he said during the company’s quarterly conference call with Wall Street analysts, “we believe we do have the opportunity to be nimble and adapt.”

In its first-quarter report, AMC Networks said it reached 9.5 million total streaming subscribers by the end of the quarter on March 31, up a half-million from the previous quarter.

Blank did not mention Netflix by name, but he was asked about AMC Networks exploring cheaper, ad-supported versions of its services, which are on track to reach internal forecasts for 20 million to 25 million cumulative subscribers by 2025. That’s the playbook followed by HBO Max and Disney+, and Netflix Co-CEO Reed Hastings dropped the bombshell last month that the company would finally pursue advertising after steadfastly rejecting it for years. The revelation was offered as a ray of hope for investors during a disastrous quarterly report. Netflix posted its first loss of subscribers since 2011 and issued a bleak outlook suggesting its long-dominant global streaming machine has hit a wall, at least for the time being.

“It’s funny,” Blank said. “When you hear of one other large player having trouble  … all of a sudden an ad tier is going to solve all problems. We don’t think that’s true, but we’ll certainly monitor it.”

Analysts also asked about profitability, given that Netflix’s recent loss of two-thirds of its market value has raised urgent questions about the viability and profitability of the overall streaming business. AMC Networks, which is an exponent of the cable business controlled by the Dolan family, stewards of Cablevision, has said streaming will be its leading source of revenue by 2025. Cord-cutting has been eroding linear results across the entire media landscape, and indications are that 2022 will see an acceleration in those traditional subscriber losses, and with it distribution and ad proceeds.

CFO and COO Christina Spade declined to offer any specific guidance as to streaming profits and said the company makes decisions on programming with its entire operation in mind. “We’re really looking at the holistic monetization cycle,” she said, “and that includes streaming, linear, international distribution and licensing.”

As the company looks to ramp up its streaming operation, “that will continue to build and help go against the headwinds we’re seeing on the linear side. … We feel very bullish on the future as streaming momentum continues and the linear situation settles out.”

Spade highlighted pricing power as an important lever for AMC Networks, which is starting to phase in price hikes on some of its services. The move is based on “what we’re seeing in our content communities,” the exec said. Subscribers are “loyal to us, they love the content.”

A splashy recent move to favor the company’s own streaming outlets came when IFC Films shifted its pay-1 window to AMC+. Plans for one original movie release every Friday night are due to start this week with the debut of Clean, starring Adrian Brody and RZA. Films will either segue from theatrical runs after 90 days or, in some cases, premiere day-and-date in theaters and on AMC+. (IFC was a pioneer of day-and-date in the pre-streaming days of pay-TV on-demand.)

“We have a gem there with IFC, in my view,” Spade said. Asked about the impact on the overall balance sheet of the output shift, she replied, “Relative to profitability mix, that’s at a size or scale where it doesn’t have a material impact.” Instead, she added, the goal is the “subscriber growth we’re able to get” for AMC+.

Blank said “the No. 1 objective” of the company is “to get proprietary and compelling programming in front of our streaming subscribers.”

Because they are rigorously targeted at specific audiences, Spade noted, “We’re not trying to be everything to everyone, we’re trying to be everything to someone.”

Blank also agreed with a sentiment raised by one analyst on the call, who noted that AMC Networks is playing a different game in terms of its budget for programming. While players at the top end of streaming have all tried to step up to Netflix’s level of spending — $18 billion in 2021 and a projected $20 billion this year — the results haven’t been commensurate with that outlay. And one of Netflix’s many mea culpas in its quarterly report was about its lack of financial discipline.

“I think rather than focus on spend, we like to focus on new content that we’re delivering,” Blank said. “We know we can be more efficient on the spend side and, you know, it’s a hard measurement at the moment because we’ve seen that you can spend $18 billion on content and that doesn’t necessarily make you a better business.”