Touting his company’s forays into ad-free and virtual MVPD deals, AMC Networks chief financial officer Sean Sullivan says the programmer currently has no plans to bypass traditional distributors with its own direct-to-consumer offering.
Sullivan, speaking at the Deutsche Bank Media, Telecom & Business Services conference in Palm Beach, Fla., Tuesday (March 6), said AMC has been actively addressing the changing distribution landscape by offering AMC Premiere – an ad-free version of AMC – to distributors and has struck subscription video-on-demand deals with streaming services like Netflix, Hulu and Amazon.
But as other programmers are venturing into the direct-to-consumer space – The Walt Disney Co. plans to offer an ESPN-branded direct-to-consumer offering in the spring and an entertainment-focused product in 2019 – AMC is sitting this one out.
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“Am I going to offer an AMC linear viewing experience direct-to-consumer? That’s not something we’re looking to do,” Sullivan said. “What we are trying to do is be responsive. We’re in an ecosystem where a significant portion of our economics comes from our distribution partners, so why not come up with a better consumer-viewing, ad-free option for their passionate viewers, and I think AMC Premier is a perfect vessel to do that.”
“Hopefully we’ll get more distribution coverage across the United States, but in terms of a direct-to-consumer over-the-top offering, that’s not something we’re comfortable with,” he added.
Sullivan also addressed declining viewership of its perennial hit The Walking Dead, which still is the most-watched scripted series on ad-supported television, but has seen its viewer numbers decline over the years. The show is in the second half of its eighth season, and Sullivan said the company’s strategy to continue to maximize the value of the franchise through spin-offs and other means is paying off.
“What the team has done with The Walking Dead is nothing short of spectacular,” Sullivan said. “There is no question the delivery of the show has moderated, and AMC Networks has continued to grow both revenue and AOI [adjusted operating income] even in the context of the show’s moderation to its high-point. We’re thinking about The Walking Dead in almost a live-plus 365-days context.”
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Sullivan noted that AMC has partnered with Next Games for a Walking Dead mobile video game, has done live events, struck theme park partnerships, licensing merchandising relationships, and has fan clubs where fans can subscribe to collector’s boxes on a quarterly basis.
“I think that we’ve got to recalibrate people’s view of The Walking Dead beyond just linear television and the benefits it accrues to the shareholders of AMC,” he said. “I think people do underappreciate it, but we are being thoughtful and disciplined in terms of the exploitation of it.”