AMC streaming strategy not only focused on subscriber adds: CEO

As AMC Networks continues to steadily increase its subscriber base, the company will focus on “very deliberate” growth with regards to streaming strategy, interim CEO Matt Blank said Thursday.

“From a scale standpoint, we do not have to grow 2 million subs a quarter,” Blank said at a MoffettNathanson's Media & Communications Summit conference. “We’re very deliberate in growing this business, we have great target audiences that we serve, and we keep our content costs dramatically lower.”

He pointed out AMC original programming costs, on average, less than $1 million per hour to produce, compared to how other streaming services produce content.

AMC closed Q1 2022 with a total of around 9.5 million subscribers. The company said on its recent earnings call it hopes to have between 20 million to 25 million streaming customers including AMC+ and Acorn TV – its foreign content focused subscription service – by 2025.

But Blank noted AMC is taking a more holistic approach to its streaming business, not just focusing on subscription metrics.

“The whole streaming business is washed with the same cloth. There’s so much noise out there,” he said. “I think the good news from some of this noise is that everyone’s going to start looking more carefully at the business side of streaming.”

Driving onto his earlier point about deliberate growth, Blank said he is focusing on “the voice” of AMC’s content offering.

“We want to make great shows that people feel are unique to us,” he said, pointing towards Acorn’s offering of British mystery series as an example, as well as AMC’s Shudder service – featuring horror and thriller titles and Allblk subscription service, which targets African American audiences.

AMC is still milking its more well-known content titles. The final season of “Better Call Saul” – the prequel series to “Breaking Bad” – is currently airing, and AMC’s long-running series “The Walking Dead” is set to release the third part of its eleventh season sometime this year.

Blank also noted AMC’s purchase in January of Sentai Filmworks, an anime licensor that has “tremendous potential” in serving the growing anime audience – another target group AMC has in mind.

Looking at AMC’s performance across linear and SVOD, Blank thinks the linear TV business isn’t going to remain in a vacuum, but rather converge with streaming. AMC is focusing on how to take advantage of both methods.

“When you have these FAST channels, what are they really? They’re built on the backs of the linear business,” he said. “They’re driven by strong relationships with our commercial partners and advertisers.” He added connected TV platforms will also grow rapidly within the next few years, which will also help AMC’s FAST channel growth.

“Everyone seems to be obsessed with linear versus streaming and I don’t think that’s the relevant question,” stated Blank. The more relevant question, he explained, is how to take advantage of those continuously evolving technologies while bolstering intellectual property.

Blank also touched upon comments he made during the earnings call on whether AMC will ever introduce ads to its premium channels.

“All we’re saying is we don’t have plans at the moment, we’re not saying we won’t do that” he said. “We’re going to evaluate the market and the opportunities.”

Blank mentioned AMC’s services are priced “relatively low” and there may be more pricing advantages for AMC down the road as it focuses on its target audiences. Right now, AMC is making “a lot of money” in advertising and while the opportunity to gain more subscribers at a lower-priced service “may be there for some [streaming services],” that currently isn’t AMC’s priority.

“Our services aren’t high priced,” said Blank. “There’s a lot of value there already. It’s a lot different when you’ve got an average consumer paying $16 per month versus a consumer paying $7 per month.”