- AMC Networks (AMCX +0.9%) CEO Josh Sapan pointed to history in describing the company's continuing strategy at the Communacopia Conference: The company spun out from Cablevision in 2011 with about $1B in revenue and EBITDA around $450M; since then, run-rate revenue has tripled and EBITDA about doubled.
- The competitive environment is more cluttered, Sapan admits, and while there was some question about how the company would respond after the ends of hits Mad Men and Breaking Bad, "Cable dramas, of the top 10, we have five of them. So that's a pretty good place to be ... all of them new entrants, in the past 24 months."
- AMC gets flexibility from dependence on not two, but three revenue streams: Advertising, affiliate fees, and the sale of shows. "When we begin a series, pick a number, say $3M/hour ... we are able to, with certainty, bring the reliance on U.S. variable dollars like advertising way down if it's been sold to international SVOD (subscription video on demand) ... it allows us to increase our volume."
- He contrasted the company's approach to SVOD with that of rivals in terms of friendliness to pay TV. "We do sell to SVOD domestically; Netflix, notably, and Hulu. We are more deliberate and more careful and more restrained than some," with shows appearing on AMC (or IFC, SundanceTV, BBC America) and then "about a year later will go to U.S. domestic SVOD ... that's a long delay.
- "Others put them on very quickly. We've been pretty consistent in trying to provide real value to MVPDs (multichannel video programming distributors) who ... pay our license fees and brought us to the dance. That yearlong advance window we think is pretty important to them." Sapan says vs. competitors, AMC's channels are "dramatically underpriced" compared to what's delivered.
- Ads may hiccup this quarter but rebound in Q4, he says. "We just finished a very good upfront ... advertisers are trying to reach our demo." The company's seeing "increasing CPM, very very high demand, on a very good trajectory ... in Q3 we saw a hiccup, but any given show, any given 90 days you're going to see those things. Q4 should be a good quarter."