May 5, 2020
AMC Networks May 5 said it expects to generate 3.5 million to 4 million combined paid subscribers for its four SVOD services — Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel) — by the end of the year, two years ahead of the company’s original target.
AMC acquired home entertainment distributor RLJ Entertainment in 2018 for $65 million largely for British-centric programming service Acorn TV and UMC. Notably, Acorn TV launched in the United Kingdom in Q1 — nine years after bowing in the United States as an alternative to Netflix and Amazon Prime Video.
Separately, AMC, whose signature original programming includes “The Walking Dead,” “Killing Eve,” and “Breaking Bad” spin-off “Better Call Saul,” inked a distribution deal with ViacomCBS ad-supported streaming VOD platform Pluto TV.
“We continue to make significant progress on our digital initiatives … is enabling us to navigate this challenging time and will continue to serve us well when this [coronavirus] environment stabilizes,” CEO Josh Sapan said in a statement.
Indeed, as it is worldwide, the impact of COVID-19 and measures to prevent its spread significantly affected AMC Networks’ ad revenue and pay-TV business in the quarter and going forward.
Revenue in the quarter dropped 6.4% to $735 million, while operating profit plummeted nearly 30% to $173 million compared to the previous-year period. Beginning in mid-March, the company experienced adverse advertising sales impacts and suspended content production, which has led to delays in the creation and availability of some of its television programming.
Operationally, nearly all AMC Networks employees are working remotely, and the company has restricted business travel. AMC expects current second quarter revenue to fall 30%.
“In what has been a unique operating environment, [we] continue to generate significant levels of free cash flow and remain well capitalized with a strong balance sheet and strong liquidity,” Sapan said.