Q3 2021 AMC Networks Inc Earnings Call

November 5, 2021

[music].

Good day, ladies and gentlemen, and welcome to the AMC networks third quarter 2021 earnings conference call. At this time all participant lines are in a listen only mode.

As a reminder, today's call is being recorded.

Now I'd like to turn the call over to your host Nick Siebert. Please go ahead.

Thank you good morning, and welcome to the AMC networks third quarter 2021 earnings conference call. Joining us. This morning are Matt blank interim Chief Executive Officer, and Christopher <unk>, Chief Financial Officer today, we will begin.

With prepared remarks, and then we will open the call for questions. If you do not have a copy of today's release. It is available on our website at AMC networks Dot com before we begin I would like to remind everyone that this call may include certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Any such forward looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ.

Please refer to AMC networks SEC filings for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward looking statements made on this call on.

On today's call, we will discuss certain non-GAAP financial measures.

Required definitions and reconciliations can be found at the end of the earnings press release issued today with that I'd like to turn the call over to Matt.

Thanks, Nick and good morning, everyone with nearly two months under my belt at AMC networks, it's great to be back in an environment with strong quality content at its core echoing my many years, leading Showtime.

And a quick thank you to my friend, Josh shaping Josh and I have known each other for decades and I'm grateful for his continued friendship guidance and counsel and I'm, most grateful to be working alongside the terrific team here at AMC networks.

It's also nice to be joined on this call by some longtime friends from the analyst community.

AMC networks had strong results in the third quarter, including revenue of $811 million.

<unk> quarterly revenue in the company's history.

We expect to have a strong finish to the year. So much so that we're updating our full year financial guidance with an increase in total company revenue growth in the mid single digits and total company a OE growth in the low single digits.

And we're on track to deliver on the 9 million paid streaming subscribers that we first referenced in February of this year across our streaming portfolio of AMC, plus Acorn TV Shudder Sundance now and all Black Chris will expand on all of this in her remarks shortly.

With our focus on targeted streaming we're well on our way to our projected $20 million to $25 million paid streaming subscribers in 2025.

With all the attention around the large streaming services that seems to dominate the news.

It's clear to me that we are building a sustainable and long term profitable business here with our unique approach to the market and how we're serving subscribers.

As the new Guy on the block I thought I'd share some initial observations about the company.

Before turning this call over to Chris.

AMC networks is in a great position with several notable strategic advantages.

We benefit from what I like to refer to as the beauty of small numbers and a very specific and carefully constructed approach to serving subscribers with targeted offerings that complement the larger streamers and our purchases companion to the offerings that have something for everyone.

We have great IP and strong international content licensing revenue performance, which we are now transitioning to our streaming platforms revenue as we expand these outs and these efforts outside the United States.

And we have an enhanced content pipeline in 2022 and beyond and beyond.

Blocking untapped opportunities in both streaming and linear and driven by our strong brands.

I'd like to take a few moments to expand on each of these.

The 9 million paid streaming subscribers, we expect to have by year end and the 20 to 25 million subscribers. We project for 2025 may seem small when set against the large streamers.

However, it will be absolutely transformational for US 20 to 25 million subscribers will make streaming potentially the biggest contributor to our business.

And these goals are very attainable with our targeted strategy, we don't compete with the other streamers and this puts us in a very solid advantageous position as we navigate the streaming future.

And again when I referenced the beauty of small numbers I'm also referring to the content costs for our targeted portfolio.

These costs vary but on average are about six figures per episode across our various brands.

Rational and sustainable content spend for what we are trying to achieve spending tens of billions on content. Each year is just not the business. We're in today or we intend to be in in the future.

With our passionate superfan approach to streaming we're focused on three important things that are core to our strategy and our success.

Content category depth cures.

Curation.

And community.

Let's take our horror service Shudder for example.

No one super serves the horror fan better than shutter and our smart and sophisticated human curation ensures that we have the content that speaks to the true fans of this genre.

Recently with titles like creep show and slasher flesh and blood.

This is a huge strategic advantage that is not going unnoticed just a few weeks ago. The Wall Street Journal wrote about shutters, non algorithmic and personalized fan approach to curation.

The idea of curation in our fans discovering something new in the category that they love is something we hear about from a subscriber communities.

For example, while you may not know titles like acorns Whitstable Pearl the heart Guy and Mrs. Fischer's Modern murder Mysteries are all blacks monogamy double crossed and the last fall Super fans of this programming do and these are shows that drove subscriber growth to these services in the quarter and our.

Among the most popular on Acorn in all black.

Our current depth curation in community are important differentiators from the mass streaming offerings, leading to lower churn and higher overall engagement.

Continued investment in brands will remain key for us going forward.

As a former marketing guy.

Brand building has always been in my blood and I spent most of my career in the membership and subscription businesses.

One thing I've learned is that it's a privilege to be invited into our paying customers home and it's critical to ensure our connection with these consumers is meaningful enough that they'll pay for us month after month year after year in.

In a world where you can cancel with just one click ensuring your brand has a voice and your brand stands for something is more important than ever.

AMC networks is always pursued a strategy of targeting audiences with compelling content and powerful brands and we've done a great job adapting this expertise to streaming.

People associate shutter with being the place for horror and suspense.

They identify Acorn TV is the go to service for British and International Mysteries.

The AMC brand and by extension, our AMC plus offering is best known for two things character driven dramas, a legacy that started with Mad men and.

Breaking bad and now includes the likes of Kevin can F himself gangs of London, and killing Eve and the epic worlds of the walking dead, a discovery of witches and the forthcoming interview with the vampire.

I do think there is more opportunity to continue to build the voice of these brands, particularly as we expand our streaming services into the overseas markets.

The company has strong IP and franchises and deep library of TV and film properties is another big strategic advantage and frankly, an area I think is somewhat under recognized and undervalued.

Empty networks wholly owned or majority controlled library includes more than 6000 series episodes in 1300 films.

As well as more than 20000 episodes of highly localized unscripted lifestyle content from our AMC networks International business.

In addition, we have some of the biggest titles and brands known to a global global audience, such as the walking dead and.

Rights catalog and the Agatha Christie Library.

There is great long term value in this broad collection of IP and we're very focused on increasing increasing production of our proprietary content.

Not only as we create new hits, but importantly, as we leverage our library of titles to enrich the content mix on our targeted streaming platforms as our current deals with Netflix and Hulu will expire we will have hundreds of hours of high quality shows and films coming back to us such as critical hits like halt and catch fire.

Here turn and rectify as well as all 11 seasons of the walking dead a few years out from now great AMC content to be discovered and rediscovered by fans driving growth and driving value across our portfolio. We see this as a huge area of opportunity that the company is only <unk>.

Now beginning to fully leverage.

So we're pursuing a streaming playbook that is very different from the large services that are trying to appeal to everybody. We're all about having targeted services with powerful brands, creating communities of fans around our content and services and doing so in a way that puts us in an entirely different arena when it comes to content costs.

It's an investment.

One of the impacts of the COVID-19 pandemic over the past 18 months or so is that accelerated what was to have been a far more orderly transition to streaming perhaps by as much as four or five years.

The massive growth of the big players. During this period of time brings them much closer to some level of market saturation at an earlier point in time, and we would have otherwise anticipated as consumers become more accustomed to streaming.

Also looking to go deeper and different content areas and targeted services like ours are well suited to provide this content deaths.

We're projecting to more than double our size in just a few years. So in short there's a lot of subscriber growth runway ahead of us to take advantage of once again the beauty of small numbers are.

Our channels business remains sizable and continues to provide steady cash flow and it's a powerful platform. We're utilizing to promote streaming subscriber acquisition elevate content and strengthen new and continuing partnerships with this with distributors, who we continue to be in close harmony with across both linear and streaming.

Our channel business also provides us with a rich opportunity to grow our relationship with advertisers to.

To expand on advertising for a moment, our third quarter AD revenue benefited from our continuing robust markets and strong execution by our commercial revenue team.

We had a great upfront with some of the highest price increases we've seen across our linear channels and increasing demand for our digital inventory.

Within the programming, we're making available across a bot and free AD supported streaming platforms and our terrific commercial revenue team continues to be aggressive in taking advantage of new advanced advertising technologies to help grow our business now and in the future.

Before closing, let me touch on a few of the third quarter content highlights a.

AMC plus premiered the 11th and final season of the walking dead and expanded 24 episodes season that will run through the end of next year and launched Kevin can F himself, which became an instant streaming hit bringing a high volume of young female viewers to the platform.

And it has already been renewed for a second season.

Acorn TV had the biggest quarter in its history in terms of streams delivered driven by top titles like mine life is murder, starring Lucy Lawless and Midsummer murders shutter just cap the biggest month in its history in October with its original film VHS 94, becoming its most watched and one of its most critically it.

Claimed movie premieres.

All black had another successful quarter driven by established original series as well as weekly talk show Social Society. We continue to increase the collaboration between all Black and we TV, which has historically been the number one cable network for Black women on Thursday nights and is now also the number one.

Network with Black women and adults on Friday nights, we Tv's Friday night success is largely result.

Of the strength of the love after lockup franchise, which continues to perform extremely well in both viewership and social conversation and will expand to a third series early next year.

I'll also add that Sundance now recently secured exclusive North American rights to the English language UK remake of the hit French series French series call My agent, which has been a buzzy success for Netflix and one of my favorites.

This new version will Premier on our platform next year.

As I mentioned earlier 2022 will be the biggest year for content in the company's history.

With many COVID-19 delayed production state viewing, including the highly anticipated returns of better call Saul and killing Eve the kickoff of the <unk> franchise with interview with the Vampire. The continuing final season of the walking dead flagship series and the expansion of the walking dead universe with the new Fios series called <unk>.

Of the walking dead.

I'll also note the upcoming original series 61st Street, a great courtroom drama courtroom drama with Courtney be Vance dark wins based on the Tony Hillerman best selling novel and Moon Haven, an incredibly timely show about a group that leaves earth to Colonise space.

These are just a few of the key content drivers that we believe will underpin our growth over the next year and for years to come.

Throughout these remarks Ive referred several times to the beauty of small numbers well the real beauty of these numbers is that they smell large long term growth for AMC networks going forward with that I will turn the call over to my former and Thankfully current colleague Chris Spade.

Thank you, Matt and good morning, everyone.

First I will start by providing some additional details regarding our updated 2021 financial expectations, which Matt just mentioned at a high level.

Outlook for the full year of 2021.

For a strong 2022 and continued proven execution toward our long term subscriber goal of $20 million to $25 million by year end 2025.

We are reinforcing our plan to grow to at least 9 million aggregate paid streaming subscribers by the end of 2021.

We have experienced ongoing subscriber growth momentum consistently every quarter and we are on track to achieve our aggregate year end subscriber goals for 2021.

Streaming subscriber growth continues to be driven by our curated programming investments and supported by strategic subscriber acquisition and retention marketing investment.

We will continue to invest to drive future streaming growth, particularly in new original programming efficient subscriber acquisition marketing and platform enhancements.

As we discussed on our last call.

We expect streaming growth investments to be more heavily weighted towards the back half of the year and continue into 2022, and which we will have our strongest full year original programming slate ever.

On the heels of our third quarter streaming performance, we anticipate accelerating streaming investments in the fourth quarter of 2021 and 2022.

We continue to see that streaming growth is supported by the combination of strong content and coinciding awareness and performance marketing.

Going into 2022 for AMC.

We will have 22 original series premiers, including three series to.

The walking dead better call Saul.

Our series offerings in 2020 to comprise our strongest slate ever.

Today, we are raising our full year 2021 outlook for total company revenue and for adjusted operating income year over year growth.

We expect full year 2021, total company revenue growth to be in the mid single digits.

Driven by our strong results year to date continued advertising and streaming revenue growth, partly offset by well understood linear market dynamics.

Regarding full year 2021, adjusted operating income, we now expect growth in the low single digits, reflecting our strong revenue performance.

Ongoing expense management and the continuation of strategic streaming investments that I just outlined.

We continue to expect full year 2021 free cash flow to be approximately breakeven our free cash flow outlook contemplates continued content investments to drive our strong 2022 slate as well as the previously mentioned one time cash payments associated with the July settlement.

Since this onetime payment or prior free cash flow outlook of approximately $200 million would have remained unchanged.

We are on track to achieve our updated full year goals and we expect to enter 2022 with momentum.

Next year will include our most robust content slate and performance will be driven by the continued execution of our transformational streaming strategy and the optimization of our linear business performance.

We anticipate continued investment in streaming growth and digital platforms.

Our continued investment in owned and controlled content.

Of course, our brands and is meaningful to our passionate audiences.

Will be supported by strategic ROI based subscriber acquisition and retention marketing.

Moving to our third quarter 2021 performance.

Company revenues were $811 million.

Representing a 24% increase from the prior year, driven by higher content licensing streaming and advertising revenues.

By anticipated affiliate revenue decline.

Adjusted operating income was $225 million, representing 21% growth from higher revenue offset by additional programming and marketing investments.

Adjusted earnings per share was $2 68.

Regarding our third quarter streaming performance, we are pleased with the trajectory of our streaming businesses.

Streaming subscribers in streaming revenue increased 74% and 83% respectively versus the prior year third quarter.

We are seeing healthy retention rate and subscriber engagement metrics across every service in our portfolio.

The third quarter retention rates improved across all of our streaming services compared to the prior year.

For our operating segments third quarter performance domestic.

Operations revenue of $683 million increased 25% from the prior year adjusted operating income was $231 million for the quarter, representing 12% growth as compared to the prior year.

Domestic operations distribution revenue increased 26% to $483 million.

So there's continued subscription revenue momentum and higher content licensing revenue in the quarter.

Content licensing revenue increased 60% in the third quarter.

<unk> revenue benefited from an increase in the number of originals, we distributed in the quarter, including the walking dead fear the walking dead will beyond and others as the timing impacts of pandemic related production delays started to normalize.

Subscription revenue increased 14% in the quarter driven by streaming revenue growth attributable to an increase in subscribers.

<unk> revenue growth was partly offset by a low single digit decrease in the affiliate revenue.

Similarly attributable to linear subscriber universe declines.

Domestic operations advertising revenue of $200 million increased 22% compared to last year. This was fueled by healthy pricing for a strong quarter of original content, including the walking dead, Kevin Jeff himself or discuss.

Every of witches creep show and more.

Advertising revenue in the quarter also reflected continued growth and monetization of our digital audience.

Partly offset by lower ratings.

Domestic operations adjusted operating income performance for the quarter reflects higher distribution and advertising revenues as well as increased strategic screaming investments.

Currently in original programming and subscriber acquisition and retention marketing.

Moving to the international and other segment revenue increased by 17% to $130 million.

International and other third quarter revenue trends continued to demonstrate the recovery at AMC networks International and $25 seven media.

Advertising revenue increased 34% to $25 million.

Related to higher pricing and an increase in ratings as a result of strong performance across our international channel portfolio with continued strong performance in the U K.

Distribution and other revenue increased 13% to $105 million, primarily due to increased production revenue at 25, seven media as well as increased subscription revenue at AMC networks International.

Adjusted operating income increased 148% to $22 million, reflecting an increase in revenues and continued expense management.

Turning to free cash flow and the balance sheet free.

Free cash flow for the third quarter of 2021 represented an outflow of $101 million, primarily reflecting the timing of increased programming investment and the previously disclosed one time litigation related cash payment, which was paid in July of 2021.

Our net debt and finance leases at the end of the third quarter were approximately $2 billion as compared to $1 $9 billion in the prior year period.

Our consolidated net leverage ratio was two four times at the end of the quarter and we remain comfortable with our balance sheet and current leverage ratio.

There were no repurchases of AMC networks common stock in the quarter, we will continue to evaluate share repurchases on an opportunistic basis.

Our capital allocation policy continues to remain unchanged first we will look to invest organically on projects that provide attractive returns to our shareholders. This includes return based investments in the growth of our streaming services.

Second we will maintain leverage that is appropriate for our business outlook third disciplined and opportunistic strategic M&A and fourth opportunistic return of capital to our shareholders.

In summary, as you can see from our year to date performance and subscriber growth momentum.

We are extremely well positioned to achieve our updated full year 2021 goal.

Setting a strong starting point going into 2022 and beyond for future long term growth and stakeholder value creation.

With that operator, please open the line for questions.

Thank you.

To ask a question you will need to press Star then one on your telephone to withdraw your question. Please press the pound key.

Please standby, while we compile the Q&A roster.

Our first question comes from the line of John <unk> with Wolfe Research. Your line is open.

Thank you good morning, Matt.

<unk> forecast, how important are incremental distribution agreements like the Verizon deal reached their targets.

Understanding it's early what does engagement look like from the Verizon cohort relative to the legacy subs and then overseas expansion can you give us an update on the.

Hey, thanks.

Sure.

Sean Good question.

Obviously any engagements on the marketing promotional fronts, if we can.

Developed in coming years will help us reach those goals or go beyond the Gulf, but but our plan is in place for getting to those numbers over the next several several years.

We're very excited about the Verizon deal.

They are one of the great marketing organizations, great brands, and it's great to be associated with them. It is early in that.

And that promotion for us to really be talking about what it's going to mean.

In terms of sub growth for us I am sorry, what was the second part of your call your question overseas.

These distributions.

Yes, we are.

Not as well penetrated overseas as a lot of others are so again, that's just runway.

We look all over the world, we see huge runway for Amc's brands and obviously, we plan to take advantage of those as as we rollout our streaming plans.

Hi, John.

Hey, John It's Chris Thanks for the question. The other thing I would also add to Verizon as I Echo what Matt says that it is important in our long term strategy of growth as we look at how we're going to build out and expand AMC plus.

A wide variety of areas that the growth will come from so we have our core organic growth and if you can recall AMC plus only recently launched last year.

Phil.

A year plus into it but it's still early days compared to some of the other services that are out there. So as we look ahead, we do see strong international opportunity for AMC, plus and our targeted streaming services and we have for AMC recently launched in Canada, there will be more countries to come and also for Acorn wheat.

And a couple of countries as well and there will be more to come there. So global distribution is a big opportunity for us and we're excited about what the future what the future hold for that.

Okay.

If I could sneak in a second one you talked about the enhanced content pipeline and not the bureau of small numbers what are your expectations for growth in content investment with the market saturation for the larger players that you talked about does that change how you think about programming investment or the size of your opportunity.

Our model is different and.

One of the things I mentioned, there, we're just not going to play the cost game.

Others are playing and.

That strategy is not going to change we are very confident about our ability to program. These services aggressively.

And frankly based on my background, we're going to step on the gas pedal here.

And.

That's going to benefit not just the current user experience, but also the IP that we own we own in the future. So.

We're not going to play others game, others games, we're going to continue to invest and in all of the franchises up here and that's important as we rollout. These these targeted strategies.

Yeah.

Thank you.

Our next question comes from the line of Tim Nolan with Macquarie. Your line is now open.

Oh, great. Thanks, very much can I follow up on the international.

I think you said.

The prepared remarks that you've got some Hulu and Netflix deals.

Expiring you can put some of that content on your platforms your own DTC platform I just want to make sure how that plays out in Europe as well because I know you've had some decent content deals.

In Europe, I think also with Amazon. So question is what.

Content can you put onto your own platforms and then a second question would be I saw the announcement.

Weeks ago about this partnership with the trade desk and magnate on targeted programmatic linear advertising I wonder if you could speak a little bit more about that I think it's not completely new <unk> been doing this for a little while already just curious about more details on this partnership.

Thanks, Tim.

First on the international front, we are in this.

This period, where we will continue to optimize our linear performance relative to content licensing deals that we have in place.

Not a long term plan for us in terms of continuing to renew these types of licensing deals. So over time, we will we will take back some of that licensed content for ourselves in markets, where we are significantly out there with our streaming distribution given the IP that we have that Matt outlined we actually do have strong IP.

That we can put in place in the screening products today internationally in select countries. So we will continue to go through this dance of.

Optimizing and enjoying the current licensing revenue we have in place that will fuel the growth for the future, but for the long term, we really feel it's important that we have exclusivity in our content and so wherever those deals will come to expire and countries that we are significantly investing in streaming.

We'll look to have that product be exclusive.

Then relative to the targeted programmatic linear advertising, we're very excited about what Tim Kelleher and our advertising team are putting in place across the board with advanced advertising their paving away a new frontier and I think because of the nature of our strong content and the innovation that we're bringing.

Selling our advertising inventory, we're doing it in a way that's exciting to our advertisers and we can focus on <unk>.

The addressable market.

Thanks.

Yeah.

Our next question comes from the line of Michael Nathanson with Moffett Nathan Your line is now open.

Hey, Matt I have a couple here.

First is given your experience in short time.

All you have done even before that I wonder what do you think of the unit economics.

Midstream business when you look at the ROI or the lifetime cost.

From a value and anything you can share with us on kind of the comparable unit economics of this model versus the models you need before and then second is last night, you probably know that Lions gate announced they wanted to do something with stars.

You know opportunities.

How do you feel about the need for maybe further scale and do you think this is eventually I know you're playing a niche game were there any benefits actually even anymore.

Services and platforms, even though your niche become stronger relative to distributors in other gatekeepers.

Sure.

Question.

First of all the Showtime experience versus the AMC experience.

When Showtime went into the streaming world.

It was really the same business.

In terms of in terms of the consumer experience.

Consumers are used to paying for a premium network.

Most of the other.

Companies that have entered screaming with traditional businesses that wasn't really the case no. One is paid directly for ESPN before nobody is paid directly for discovery before so its a totally different model.

Here, we look at our business model and say this is a great incremental and sustainable business plan, where we can generate strong margins.

And continue to grow our business around the world. So it's a really a very very different enterprise and we feel really good about the plan about the plan here and only better about it going forward.

In terms of the Lionsgate and Starz.

Transactions, there's nothing really new here.

These conversations have been in the marketplace for a long time, we'll see if they go anywhere.

We don't feel that.

That is necessary for us to scale.

Necessary for us to scale by acquisition in any way shape or form the model is working it's going to continue to work. We think it's a sustainable model. We think it's a model that can grow and it's a model that really fits how we define this company's future.

Okay. Thanks, Matt welcome.

Thank you.

Our next question comes from the line of Michael Morris with Guggenheim. Your line is now open.

Thank you good morning, guys I have two questions first for Matt.

Curious any additional insight you can give us on sort of changes either strategically or operationally with the management change I know it's early.

And.

That meant to be sort of like a criticism in the past, but really a bit more specificity about your vision for the future of the company and where we may see some some changes in.

And my second question is for Chris.

Really trying to get some frame of reference for this content slate into next year I think you referenced 22 season premieres, which sounds like a pretty big number.

Can you help us with how that compares to maybe the sort of Covid impacted 21, but also.

Sort of like pre Covid kind of peak levels of production is this bigger than you've ever been is it how does it compared to say 2019 or something like that thank you.

Great. Thanks, Mike nice to be chatting with you again after a bunch of years.

First <unk>.

One of the things that impressed me right out of the box here.

Incredible group of leaders, we have in this company across the board and.

No.

I'm already getting too.

Adjust to the pace of how this company works, which is very quick and smart to the people around me.

What it means for my strategy the strategy in terms might be and here I am a fan of the strategy.

They're doing a great job, it's a sustainable strategy.

I don't want to spend too much time, repeating what we said in the earlier part of the call, but whether it's the IP we own whether it's the targeted services, we have out there whether it's the acceleration of our content plans, whether it's the strength that we still see in the traditional business.

We think there's tremendous opportunity to keep growing growing this company and.

I Love the management of the company and I think they're the right people in the right places to help us keep people and strategy.

Mike It's Chris for your second question. It's a great question actually when you look at our pipeline of content and where we've been historically, we've had strong franchises strong strong series in place.

On the linear side that has helped fuel our screaming success in streaming growth and even people that haven't watched.

Some of the franchise shows have found them on streaming and now theyre coming back to US better call. Saul is a great example, and even I myself as a consumer I got hooked on better call Saul during the pandemic and now I can't wait for the next step of soda and they haven't even read the script because I wont be surprised.

Relative to how we think about 'twenty one it is our strongest slate ever and now we have more ways than ever to monetize our content. If you think about where we werent 18, and 19, we didn't even really have AMC plus so although we had rights we didn't have the service in place. So now we're at a place where we can maximize our monetization and also.

Reap the benefits of that not just in 'twenty, two but for years to come having said that it is really important that we look at.

Angie.

Where are we.

Sorry, I didn't know can you hear me, Mike because it looks like I can.

I hear you.

We lost you about 20 seconds ago at least from my side.

To talk about looking forward.

Okay.

Did you hear me talk about my love of better call Saul or you missed that part yes, no. We got we got we got that.

Say it again.

Either way either way, it's not talk about better calls because the walking dead is my favorite show, but looking better call Saul for the point so.

But anyway.

We really have our content as a monetization engine across all platforms linear streaming et cetera, and so when we look at the end of 'twenty. One we are making a strategic decision to invest more in our content marketing and really unfold our powerful slate that we have next year to make the most.

Going into next year and the years beyond.

Great. Thank you both appreciate it.

Thank you as a reminder to ask a question you will need to press Star then one on your telephone.

Okay.

Our next question comes from the line of Thomas <unk> with Morgan Stanley. Your line is now open.

Great. Thanks for taking my question, Matt following up on Michael's question on going after scale on the OTT side are there other genre or cohorts of Super fans, where do you think you can expand on the suite of targeted offerings that you have now even organically do you see that as an opportunity to kind of build scale in that way and then.

Chris you cited ROI based subscriber acquisition and retention marketing is an area of focus can you give us any color on what youre seeing on the trends around the effectiveness of performance versus brand marketing and how you see that mix evolving over time. Thanks, so much.

Thanks Thomas.

We're constantly evaluating ways, we can expand on the strategy.

And why wouldn't that makes it makes it makes sense for us and.

Certainly organically if we saw pieces of our business that we thought lend themselves to expansion, we would we would chase that we chase it aggressively.

<unk>.

We're we're being approached regularly.

With other targeted ideas in the marketplace and.

We're ready to move when.

We think there is an appropriate target in terms of genre and target audience and the economics. So so yes on that front. Thank you.

Hi, Thomas it's Chris Thanks for the question.

I like that Youre focused on the metrics because for us. It really is all about the metrics, it's really important to us that we're seeing strong lifetime value and lifetime revenue relative to our subscribers.

And for US our performance our performance metrics are different for each of our services and Theyre all very favorable in relation to the lifetime revenue and the value of a subscriber the sac costs that we're seeing today are consistent with our view that we can continue to expand our subscriber growth investments, including an added focus on retention marketing.

And in regard to churn, we're seeing healthy retention rates across all of our services.

And for AMC plus in particular as I said, we're only a year past the initial year plus past the initial launch of the premium service, but we've grown significantly in the course of the 12 months in our containers are pacing continues to be strong.

And there is there is a belief that we have the COVID-19 driven push of consumers to streaming that did benefit us along with other streamers, but what we're seeing with AMC plus and the targeted services is that because we're super serving fans, we have seemingly more stupid sticking power.

And also given that we have attractive price points in place.

As we look to 'twenty two the strong content slate will continue to drive momentum along with.

Targeted and specific awareness marketing and performance marketing with an increased focus on retention marketing.

And we're doing this all to try to support a lower churn and a more satisfied consumer.

Okay.

Thank you.

As a reminder to ask a question you will need to press Star then one on your telephone one moment for questions.

There are no further questions ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect.

Okay.

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Good day, ladies and gentlemen, and welcome to the AMC networks third quarter 2021 earnings conference call. At this time all participant lines are in a listen only mode.

As a reminder, today's call is being recorded I would now like to turn the call over to your host Nick Siebert. Please go ahead.

Thank you good morning, and welcome to the AMC networks third quarter 2021 earnings conference call. Joining us. This morning are Matt blank interim Chief Executive Officer, and Kris <unk> Chief Financial Officer today, we will begin.

Any such forward looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ.

Please refer to AMC networks SD.

SEC filings for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward looking statements made on this call on.

On today's call, we'll discuss certain non-GAAP financial measures.

Required definitions and reconciliations can be found at the end of the earnings press release issued today with that I'd like to turn the call over to Matt.

And a quick thank you to my friend, Josh Safe and Josh and I have known each other for decades and I'm grateful for his continued friendship guidance and counsel and I'm, most grateful to be working alongside the terrific team here at AMC networks. It.

It's also nice to be joined on this call by some longtime friends from the analyst community.

AMC networks had strong results in the third quarter, including revenue of $811 million, the highest quarterly revenue in the company's history.

With our focus on targeted streaming we're well on our way to our projected 20% to $25 million paid streaming subscribers in 2025.

With all the attention around the large streaming services that seems to dominate the news. It's clear to me that we are building a sustainable and long term profitable business here with our unique approach to the market and how we're serving subscribers.

As the new Guy on the block I thought I'd share some initial observations about the company.

Turning this call over to Chris.

AMC networks is in a great position with several notable strategic advantages.

We have great IP and strong international content licensing revenue performance, which we are now transitioning to our streaming platforms revenue as we expand these apps and these efforts outside the United States.

And we have an enhanced content pipeline in 2022 and beyond and beyond <unk>.

Unlocking untapped opportunities in both streaming and linear and driven by our strong brands.

I'd like to take a few moments to expand on each of these.

First the 9 million paid streaming subscribers, we expect to have by year end and the 20 to 25 million subscribers. We project for 2025 may seem small when set against the large streamers.

However, it will be absolutely transformational for us, 20% to 25 million subscribers will make streaming potentially the biggest contributor to our business.

And these goals are very attainable with our targeted strategy, we don't compete with the other streamers and this puts us in a very solid advantageous position as we navigate the streaming future.

And again when I referenced the beauty of small numbers I'm also referring to the content costs for our targeted portfolio.

These costs vary but on average are about six figures per episode across our various brands.

Rational and sustainable content spend for what we are trying to achieve spending tens of billions on content. Each year is just not the business. We're in today, where we intend to be in in the future.

With our passionate superfan approach to streaming we're focused on three important things that are core to our strategy and our success.

Content category depth.

Curation.

And community.

Let's take our horror service Shudder for example.

No one super serves the hierophant better than shutter and our smart and sophisticated human curation ensures that we have the content that speaks to the true fans of this genre.

Most recently with titles like creep show and slasher flesh and blood.

This is a huge strategic advantage that is not going unnoticed just a few weeks ago. The Wall Street Journal wrote about Shudder is non algorithmic and personalized fan approach to curation.

The idea of curation in our fans discovering something new in the category that they loved is something we hear about from our subscriber communities.

For example, while you may not know titles like acorns Whitstable Pearl the heart Guy and MS. Fisher's modern murder Mysteries are all blacks monogamy double cross and the last fall Super fans of this programming do and these are shows that drove subscriber growth to these services in the quarter and our.

Among the most popular on Acorn in all black.

Our current depth curation in community are important differentiators from the Max streaming offerings, leading to lower churn and higher overall engagement.

Continued investment in brands will remain key for us going forward.

As a former marketing Guy <unk>.

Brand building has always been in my blood and I spent most of my career in the membership and subscription businesses.

One thing I've learned is that it's a privilege to be invited into our paying customers home.

And it is critical to ensure our connection with these consumers as meaningful enough that they'll pay for us month after month year after year.

In a world where you can cancel with just one click ensuring your brand has a voice and your brand stands for something is more important than ever.

AMC networks is always pursued a strategy of targeting audiences with compelling content and powerful brands and we've done a great job adapting this expertise to streaming.

People associate shutter with being the place for horror and suspense.

They identify Acorn TV is the go to service for British and International Mysteries.

The AMC brand and by extension, our AMC plus offering is best known for two things character driven dramas, a legacy that started with Mad men and.

I do think there is more opportunity to continue to build the voice of these brands, particularly as we expand our streaming services into the overseas markets.

The company's strong IP and franchises and deep library of TV and film properties is another big strategic advantage and frankly, an area I think is somewhat under recognized and undervalued.

AMC networks wholly owned or majority controlled library includes more than 6000 series episodes in 1300 films as.

As well as more than 20000 episodes of highly localized unscripted lifestyle content from our AMC networks International business and.

In addition, we have some of the biggest titles and brands known to our global global audience, such as the walking dead and.

<unk> catalog and the Agatha Christie Library.

There is great long term value in this broad collection of IP and we're very focused on increasing increasing production of our proprietary content.

Not only as we create new hits, but importantly, as we leverage our library of titles to enrich the content mix on our targeted streaming platforms as our current deals with Netflix and Hulu expire we will have hundreds of hours of high quality shows and films coming back to us such as critical hits like halt and catch fire.

Our turn and rectify as well as all 11 seasons of the walking dead a few years out from now great AMC content to be discovered and rediscovered by fans driving growth and driving value across our portfolio. We see this as a huge area of opportunity that the company is only <unk>.

Now beginning to fully leverage.

So we're pursuing a streaming playbook that is very different from the large services that theyre trying to appeal to everybody. We're all about having targeted services with powerful brands, creating communities of fans around our content and services and doing so in a way that puts us in an entirely different arena when it comes to content cost.

It's an investment.

Also looking to go deeper and different content areas and targeted services like ours are well suited to provide this content depth.

We're projecting to more than double our size in just a few years. So in short there's a lot of subscriber growth runway ahead of us to take advantage of once again the beauty of small numbers are.

Our channels business remains sizable and continues to provide steady cash flow and it's a powerful platform. We're utilizing to promote streaming subscriber acquisition elevate content and strengthen new and continuing partnerships with the split distributors, who we continue to be in close harmony with across both linear and streaming.

Our channel business also provides us with a rich opportunity to grow our relationship with advertisers to expand on advertising for a moment, our third quarter AD revenue benefited from our continuing robust market and strong execution by our commercial revenue team.

We had a great upfront with some of the highest price increases we've seen across our linear channels.

An increasing demand for our digital inventory within.

Before closing, let me touch on a few of the third quarter content highlights.

<unk> plus premiered the 11th and final season of the walking dead and expanded 24 episodes season that will run through the end of next year and launched Kevin can F himself, which became an instant streaming hit bringing a high volume of young female viewers to the platform.

And it's already been renewed for a second season.

Acorn TV had the biggest quarter in its history in terms of streams delivered driven by top titles like Miami licenses murder, starring Lucy Lawless and Midsummer murders shutter just cap the biggest month in its history in October with its original film VHS 94, becoming its most watched and one of its most critically acclaim.

And movie premieres, all black had another successful quarter driven by established original series as well as weekly talk show Social Society. We continue to increase the collaboration between all Black and we TV, which has historically been the number one cable network for black women on Thursday nights.

And it's now also the number one network with black women and adults on Friday nights, We Tv's Friday night success is largely result of the strength of the love after lockup franchise, which continues to perform extremely well in both viewership and social conversation and will expand to a third series early.

Next year.

This new version will premiere on our platform next year.

As I mentioned earlier 2022 will be the biggest year for content in the company's history.

Of the walking dead.

I'll also note the upcoming original series 61st Street, a great core around DRAM courtroom drama with Courtney Vance dark wins based on the Tony Hillerman best selling novel and Moon Haven, an incredibly timely show about a group that leaves earth to Colonise space.

These are just a few of the key content drivers that we believe will underpin our growth over the next year and for years to come.

Throughout these remarks I have referred several times to the beauty of small numbers, while the real beauty of these numbers is that they smell large long term growth for AMC networks going forward with that I will turn the call over to my former and Thankfully current colleague Chris Spade.

Thank you, Matt and good morning, everyone.

First I will start by providing some additional details regarding our updated 2021 financial expectations, which Matt just mentioned at a high level.

Our new outlook for the full year of 2021 sets the stage for a strong 2022 and continued proven execution toward our long term subscriber goal of $20 million to $25 million by year end 2025.

Reinforcing our plan to grow to at least 9 million aggregate paid streaming subscribers by the end of 2021.

We have experienced ongoing subscriber growth momentum consistently every quarter and we are on track to achieve our aggregate year end subscriber goals for 2021.

Streaming subscriber growth continues to be driven by our curated programming investments and supported by strategic subscriber acquisition and retention marketing investments.

We will continue to invest to drive future streaming growth, particularly in new original programming efficient subscriber acquisition marketing and platform enhancements.

As we discussed on our last call, we expect streaming growth investments to be more heavily weighted toward the back half of the year and continue into 2022, and which we will have our strongest full year original programming slate ever.

On the heels of our third quarter streaming performance, we anticipate accelerating streaming investments in the fourth quarter of 2021 and into 2022.

We continue to see that streaming growth is supported by the combination of strong content and coinciding awareness and performance marketing.

Going into 2022 for AMC, plus we will have 22 original series premiers, including three series finales, and the walking dead better call Saul killing Eve.

Our series offerings in 2020 to comprise our strongest slate ever.

Today, we are raising our full year 2021 outlook for total company revenue and for adjusted operating income year over year growth.

We expect full year 2021 total company revenue growth to be in the mid single digits driven by our strong results year to date continued advertising and streaming revenue growth.

We offset by well understood linear market dynamic.

Regarding full year 2021, adjusted operating income, we now expect growth in the low single digits, reflecting our strong revenue performance could be ongoing expense management and the continuation of strategic streaming investments that I just outlined.

Absent this onetime payment or prior free cash flow outlook of approximately $200 million.

Would have remained unchanged.

We are on track to achieve our updated full year goals and we expect to enter 2022 with momentum.

We anticipate continued investment in streaming growth and digital platforms.

Our continued investment in owned and controlled content that supports our brands and is meaningful to our passionate audiences.

We will be supported by strategic ROI based subscriber acquisition and retention marketing.

Moving to our third quarter 2021 performance total company revenues were $811 million.

Presenting a 24% increase from the prior year, driven by higher content licensing streaming and advertising revenues offset by anticipated affiliate revenue decline.

Adjusted operating income was $225 million, representing 21% growth from higher revenue offset by additional programming and marketing investments.

Adjusted earnings per share was $2 68.

Regarding our third quarter streaming performance, we are pleased with the trajectory of our streaming businesses.

Streaming subscribers in streaming revenue increased 74% and 83% respectively versus the prior year third quarter.

We are seeing healthy retention rate and subscriber engagement metrics across every service in our portfolio.

In the third quarter retention rates improved across all of our streaming services compared to the prior year.

For our operating segments third quarter performance.

Domestic operations revenue of $683 million increased 25% from the prior year adjusted operating income was $231 million for the quarter, representing 12% growth as compared to the prior year.

Domestic operations distribution revenue increased 26% to $483 million.

The result of continued subscription revenue momentum and higher content licensing revenue in the quarter.

Content licensing revenue increased 60% in the third quarter licensing revenue benefited from an increase in the number of original redistributed in the quarter, including the walking dead fear the walking dead will be on and others as the timing impacts of pandemic related production delays start to normalize.

Subscription revenue increased 14% in the quarter driven by streaming revenue growth attributable to an increase in subscribers.

Streaming revenue growth was partly offset by a low single digit decrease in the affiliate revenue primarily attributable to linear subscriber universe declines.

Domestic operations advertising revenue of $200 million increased 22% compared to last year.

This was fueled by healthy pricing for a strong quarter of original content, including the walking dead, Kevin Jeff himself, a discovery of witches creep show and more.

Advertising revenue in the quarter also reflected continued growth and monetization of our digital audience.

Offset by lower ratings.

Domestic operations adjusted operating income performance for the quarter reflects higher distribution and advertising revenues as well as increased strategic streaming investments specifically in original programming and subscriber acquisition and retention marketing.

Moving to the international and other segment revenue increased by 17% to $130 million.

International and other third quarter revenue trends continued to demonstrate the recovery at AMC networks International and $25 seven media.

Advertising revenue increased 34% to $25 million largely related to higher pricing and an increase in ratings as a result of strong performance across our international channel portfolio with continued strong performance in the UK.

Distribution and other revenue increased 13% to $105 million, primarily due to increased production revenue at $25 seven media as well as increased subscription revenue at AMC networks International.

Adjusted operating income increased 148% to $22 million, reflecting an increase in revenues and continued expense management.

Turning to free cash flow and the balance sheet free.

Our net debt and finance leases at the end of the third quarter were approximately $2 billion as compared to $1 9 billion in the prior year period.

Our consolidated net leverage ratio was two four times at the end of the quarter and we remain comfortable with our balance sheet and current leverage ratio.

There were no repurchases of AMC networks common stock in the quarter, we will continue to evaluate share repurchases on an opportunistic basis.

Second we will maintain leverage that is appropriate for our business outlook third disciplined and opportunistic strategic M&A and fourth opportunistic return of capital to our shareholders.

In summary, as you can see from our year to date performance and subscriber growth momentum.

We are extremely well positioned to achieve our updated full year 2021 goals.

Setting a strong starting point going into 2022 and beyond for future long term growth and stakeholder value creation.

With that operator, please open the line for questions.

Thank you.

To ask a question you will need to press Star then one on your telephone to withdraw your question. Please press the pound key.

Please standby, while we compile the Q&A roster.

Our first question comes from the line of John <unk> with Wolfe Research. Your line is open.

Thank you good morning, Matt within your extremely forecast.

How important are incremental distribution agreements like the Verizon deal reached their targets.

Understanding it's early what does engagement look like from the Verizon cohort relative to the legacy and then the overseas expansion can you give us an update on.

Hey, thanks.

Sure.

Thanks, John good questions.

Obviously any engagements on the marketing promotional fronts, if we can.

Developed in coming years will help us reach those goals or go beyond the Gulf, but but our plan is in place for getting to those numbers over the next several several years.

We're very excited about the Verizon deal.

They are one of the great marketing organizations, great brands, and it's great to be associated with them. It is early in that.

And that promotion for us to really be talking about what it's going to mean.

In terms of sub growth for us I am sorry, what was the second part of your call your question overseas.

Versus distributions.

We are.

Not as well penetrated overseas.

A lot of others are so again thats just runway.

We look all over the world, we see huge runway for Amc's brands and obviously, we plan to take advantage of those as as we rollout our streaming plans.

Hi, John.

Hey, John It's Chris Thanks for the question. The other thing I would also add to horizon as I Echo what Matt says that it is important in our long term strategy of growth as we look at how we're going to build out and expand AMC plus.

A wide variety of areas that the growth will come from so we have our core organic growth and if you can recall AMC plus only recently launched last year.

Phil.

Launched in a couple of countries as well and there will be more to come there. So global distribution is a big opportunity for us and we're excited about what the future what the future holds for that thank you okay.

Separately I could sneak in a second one you talked about the enhanced content pipeline and that the bureau of small numbers what are your expectations for growth in content investment with the market saturation for the larger players that you talked about does that change how you think about programming investments or the size of your opportunity.

Our model is different and.

One of the things I mentioned, there, we're just not going to play the cost game.

Others are playing in.

That strategy is not going to change we are very confident about our ability to program. These services aggressively.

Frankly based on my background, we're going to step on the gas pedal here.

And.

That's going to benefit not just the current user experience, but also the IP that we own we own in the future. So.

We're not going to play others game, others games, we're going to continue to invest and in all of the franchises up here and that's important as we rollout these targeted strategies.

Thank you.

Our next question comes from the line of Tim Nolan with Macquarie. Your line is now open.

Oh, great. Thanks, very much can I follow up on the international.

You said in the prepared remarks that you've got.

And Hulu or Netflix deals.

Expiring you can put some of that content on your platforms your own DTC platform I just want to make sure how that plays out in Europe as well because I know you've had some decent content deals.

In Europe, I think also with Amazon. So question is what.

Content can you put onto your own platforms and then a second question would be I saw the announcement a few weeks ago about this partnership with the trade desk and magnate.

On targeted programmatic linear advertising I wonder if you could speak a little bit more about that I think it's not completely new <unk> been doing this for a little while already just curious about more details on this partnership.

Thanks, Tim So first on the international front, we are in this.

This period, where we will continue to optimize our linear performance relative to content licensing deals that we have in place.

Our long term plan for us in terms of continuing to renew these types of licensing deals. So over time, we will we will take back some of that license content for ourselves in markets, where we are significantly out there with our streaming distribution given the IP that we have that Matt outlined we actually do have strong IP.

That we can put in place in the screening products today internationally in select countries. So we will continue to go through this dance of.

Have that product be exclusive and then relative to the targeted programmatic linear advertising, we're very excited about what Tim Kelleher and our advertising team are putting in place across the board with advanced advertising their paving away a new frontier and I think because of the nature of our strong content.

And the innovation that we're bringing to selling our advertising inventory we're viewing it in a way that's exciting to our advertisers and we can focus on.

The addressable market.

Thanks.

Our next question comes from the line of Michael Nathanson with Moffett Nathan Your line is now open.

Hey, Matt I have a couple here.

First is given your experience in Showtime.

All you've done even before that I wonder what do you think of the unit economics.

This new streaming because when you look at the ROI or the lifetime customer value and anything you can share with us on kind of the comparable unit economics of this model versus the models you need before and then second is last night, you probably know that Lions gate announced they want to come with stars.

Opportunities.

How do you feel about the need for maybe further scale and do you think this is eventually I know youre playing a niche game were there any benefits actually even adding more.

Servicing platforms, even though your niche.

Stronger relative to distributors in other gatekeepers.

Sure Good question.

First of all the Showtime experience versus the AMC experience.

When Showtime went into the streaming world.

It was really the same business.

In term in terms of the consumer experience.

We are used to paying for a premium network.

Most of the other comp.

Companies that have entered streaming with traditional businesses that wasn't really the case no. One is paid directly for ESPN before nobody is paid directly for discovery before so its a totally different model.

Here, we look at our business model and say this is a great incremental and sustainable business plan, where we can generate strong margins.

In terms of the Lionsgate and Starz.

Transactions, there's nothing really new here.

These conversations have been in the marketplace for a long time, we'll see if they go anywhere.

We don't feel that.

That is necessary for us to scale.

Thanks, Matt welcome.

Thank you.

Our next question comes from the line of Michael Morris with Guggenheim. Your line is now open.

Thank you good morning, guys I have two questions first for Matt.

Curious any additional insight you can give us on sort of changes either strategically or operationally with the management change I know it's early.

And the <unk>.

That meant to be sort of like a criticism in the past, but really a bit more specificity about your vision for the future of the company and where we may see some some changes in.

And my second question is for Chris.

Really trying to get some frame of reference for this content slate into next year I think you referenced 22 season premieres, which sounds like a pretty big number can.

Can you help us with how that compares to maybe the sort of.

Covid impacted 21, but also.

Sort of like pre Covid kind of peak levels of production is this bigger than you've ever been is it how does it compare to say 2019 or something like that thank you.

Great. Thanks, Mike nice to be chatting with you again after a bunch of years.

First <unk>.

One of the things that impressed me right out of the box here.

Incredible group of leaders, we have in this company across the board and.

No.

I am already getting too.

Adjust to the pace of how this company works, which is very quick and smart to the people around me.

What it means for Mike the strategy in terms might be and here I am a fan of the strategy.

They are doing a great job, it's a sustainable strategy.

I don't want to spend too much time, repeating what we said on the earlier part of the call, but whether it's the IP we own whether it's the targeted services, we have out there whether it's the acceleration of our content plans, whether it's the strength that we still see in the traditional business.

We think there's tremendous opportunity to keep growing growing this company and.

I loved the management of the company and I think they're the right people in the right places to help us keep on strategy.

On the linear side that has helped fuel our screaming success in streaming growth and even people that haven't watched.

Some of the franchise shows have found them on streaming and now theyre coming back to US better call. Saul is a great example, and even I myself as a consumer I got hooked on better call Saul during the pandemic and now I can't wait for the next step is <unk> and I haven't even read the script because I wont be surprised.

Relative to how we think about 'twenty one it is our strongest slate ever and now we have more ways than ever to monetize our content. If you think about where we werent 18, and 19, we didn't even really have AMC plus so although we had rates we didn't have the service in place. So now we're at a place where we can maximize our monetization and also.

Reap the benefits of that not just in 'twenty, two but for years to come having said that it is really important that we look at.

Angie.

Where are we.

Sorry, I didn't know can you hear me, Mike because it looks like I can hear you.

We lost you about 20 seconds ago at least from my side.

You started to talk about looking forward.

Okay.

Did you hear me talk about my love of better call Saul or you missed that part you have note we got.

Got that.

Yes sure.

Either way either way, it's not talk about better cost because the walking dead is my favorite show, but looking better call Saul for the point so.

But anyway.

Beyond.

Great. Thank you both appreciate it.

Thank you as a reminder to ask a question you will need to press Star then one on your telephone.

Our next question comes from the line of Thomas <unk> with Morgan Stanley. Your line is now open.

Great. Thanks for taking my question, Matt following up on Michael's question on going after scale on the OTT side are there other genres that are cohorts of superfan, where you think you can expand on the suite of targeted offerings that you have now even organically do you see that as an opportunity to kind of build scale in that way and then.

Thanks Thomas.

We're constantly evaluating ways, we can expand on the strategy.

And why wouldn't that makes it makes it makes sense for us and.

Certainly organically if we saw pieces of our business that we thought lend themselves to expansion, we would we would chase that we chase it aggressively.

<unk>.

We're we're being approached regularly.

With other targeted ideas in the marketplace and.

We're ready to move when.

We think there is an appropriate target in terms of genre and target audience and the economics. So so yes on that front. Thank you.

Hi, Thomas it's Chris Thanks for the question.

I like that you are focused on the metrics because for us. It really is all about the metrics, it's really important to us that we're seeing strong lifetime value and lifetime revenue relative to our subscribers.

And in regard to churn, we're seeing healthy retention great rates across all of our services.

And there is there is a belief that we have that the COVID-19 driven push of consumers to streaming that did benefit us along with other streamers, but what we're seeing with AMC plus and the targeted services is that because we're super serving fans, we have seemingly more sticking power.

And also given that we have attractive price points in place. So as we look to 'twenty two the strong content slate will continue to drive momentum along with.

The targeted and specific awareness marketing and performance marketing with an increased focus on retention marketing.

And we're doing this all to try to support a lower churn and a more satisfied consumer.

Thank you.

As a reminder to ask a question you will need to press Star then one on your telephone one moment for questions.

There are no further questions ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect.

Q3 2021 AMC Networks Inc Earnings Call

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