Q1 2024 AMC Networks Inc Earnings Call
Good day and thank you for standing by welcome to the AMC networks first quarter 2024 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Don you wouldn't hear an automated message advising that your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to turn the conference over to your Speaker Nicholas D. Burke VP of corporate development and Investor Relations. Please go ahead.
Thank you good morning, and welcome to the AMC networks first quarter 2024 earnings conference call. Joining us. This morning are Christian Dolan, Chief Executive Officer, Patrick O'connell, Chief Financial Officer, Tim Kelleher, Chief Commercial officer.
Dan Mcdermott's, President Entertainment and AMC Studios.
Today's press release is available on our website at AMC networks Dot Com, we will begin with prepared remarks, and then we'll open the call for questions.
Today's call May include certain forward looking statements within the meaning of the private Securities Litigation Reform Act 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 as the SEC filings for a discussion of risks and uncertainties.
The company disclaims any obligation to update any forward looking statements made on this call today.
We will discuss certain non-GAAP financial measures the required definitions and reconciliations can be found in today's press release with that I'd like to turn the call over to Kristin.
Okay.
Thanks, Nick and good morning, everyone.
In the first quarter, we continued to execute on our strategic priorities, including the ongoing delivery of healthy free cash flow.
New technologies are transforming the media industry, providing consumers with more entertainment options than ever before for AMC networks, taking advantage of these new opportunities addressing how when and where consumers watch our programming is at the heart of our strategy.
Last month, we joined with our most important commercial and creative partners for 'twenty to 'twenty four upfront.
I'd like to spend a few minutes on some of the key messages, we delivered to our commercial partners, which underscore our strengths and how these strengths to connect to our strategy, which is to produce great content and make it available to viewers whenever and wherever they want to watch.
We engage with viewers through a wide variety of endpoints and monetize our content wherever possible. We serve an aggregated audience of more than 91 million across our linear networks targeted streaming services and more than 100 channel fees on third party C T V and <unk> platforms.
As an independent programmer not tied to a broadcast network our distribution platform AMC networks has the freedom to presents our content in all of these places in whatever format, our partners and viewers enjoy it.
Our options are not limited or constrained in this fast changing world in fact, we're seeing them go out.
Our partners understand that we have the ability to be everywhere and importantly that we add value wherever we are.
In addition to our priority of engaging viewers with premium content. We also focus heavily on nurturing and expanding our commercial relationships, we aimed to create content that resonates in the marketplace and we work hard to ensure that our partners also benefit from that success.
As part of our upfront, we announced that we plan to launch AD supported version of our targeted streaming services by the end of next year our.
Our popular streaming brands, such as Acorn TV shutter, all black anhydride wells for the first time have AD supported versions available on a standalone basis. This will allow us to deliver an entire genres and highly engaged fan communities to our advertising partners with a greater level of targeting a performance outcomes than ever before.
Yeah.
We've often spoken about our technological leadership position in advertising and we're proud to continue to be at the forefront in this space.
To give you a sense of what this means in practice, 70% of our linear footprint. Today is enabled for addressable advertising. This includes addressable slots in every single hour of programming on each and every one of our networks.
The percent of that addressable linear footprint can be bought programmatically, which is by far the largest percentage of programmatic linear inventory in the industry.
Obviously, 100% of our digital inventory is also programmatic.
As media plans increasingly include sophisticated targeting utilizing both linear and digital inventory. This is a meaningful point of differentiation for us.
Well were meeting viewers across our brands and networks and streaming services. We're also strategically when doing our content across dozens of endpoints, enabling us to optimize our programming investments at the same time, we're aggressively pursuing attractive international content licensing arrangements in parts of the world beyond our own distribution footprint.
These opportunities continue to be available to us because AMC networks is upholding and delivering on its commitment to quality content I'll touch on a few of our first quarter programming highlights and provide a brief look at the strong slate we have for the year ahead.
On AMC and AMC, plus we brought viewers the latest series in our expanding walking dead universe and it was the biggest one yet.
The walking dead the ones, who live became the most viewed series in the history of AMC plus so I mean, the biggest single day of direct to consumer sign ups in the history of the service it.
It was a hit on linear cable as well with 3 million viewers tuning in for the Premier night telecasts.
The series was critically acclaimed and attracted significant social media attention during each Sunday night Premier.
This success reflects the continued strength of the walking dead universe, and the ability of its characters and stories to command attention and engage fans.
It also underscores our ability to build and grow franchise, driven fandoms, which we think we do as well as anyone.
This core competency will again be on display this Sunday night with a highly anticipated premier of the second season of Anne Rice's interview with the vampire on AMC and AMC plus and next month, we're excited to introduce a new series in the popular orphan Black universe orphan black echoes on AMC, AMC and BBC America.
Uh huh.
Our film business has the rights to more than 1500 titles across our portfolio and continues to carve out a leadership position in the horror genre.
Latest example of this is a film called late night with the Devil, which had the biggest opening weekend and IFC films. This history, and 1400 screens and significantly outperformed box office projections.
The film recently moved to our shutter horror service, where it quickly became the number one film and shutter history, while achieving 1 million stream is faster than any other title on the service.
We continue to super serve passionate anime audiences with our streaming service high Dot, which recently launched a new and improved consumer App and this summer we'll premiere a new season of the biggest series in its history <unk> co.
Our popular Acorn TV streaming service, just unveiled a smart and expansive brand refresh and has a great lineup of shows coming over the next few months as is the case with all of our targeted streaming services, we see a real opportunity to lean aggressively into the unique experience and a feeling of community that Acorn offers its fans over there.
The next few months Acorn subscribers will have access to new seasons of Harry Wild starring James C. Moore My life is murder, starring Lucy Lawless as well as perennial favorites in Europe, I'll pay and under the bond.
We see V is strategically focusing its original strategy on Friday nights with new series like jobs House in the barn sponge and a new season of the popular love after lockup franchise.
Friday is our strongest night of the week, particularly with women viewers. We think this represents a real opportunity that will be aided even further by the highly anticipated return of the Braxton family. This summer.
Our programming defines our company and our relationships with viewers, but it also drives the engaged audiences and value we're able to deliver to our commercial partners. We continue to see strength in our affiliate relationships driven by the low wholesale price of our networks compared to the value we bring with our popular content.
We continue to bring high quality scripted dramas on Sunday nights on AMC and to test and innovate with our distribution partners. We recently renewed the carriage of our portfolio of linear networks as well as our streaming services with one of our longstanding partners horizon.
During the quarter, we successfully launched BBC news on leading CTV and fast platforms at a time when reliable and impartial news is more important than ever.
We're also pleased to see momentum continue to build with new Internet delivered skinny bundles, including charters, new spectrum TV stream package and Comcast now TV both of which include all five of our linear networks as well as BBC news.
In terms of our international business.
Last month in the U K, we launched a new streaming offering on ITV ex the British AD supported streaming service operated by ITV called AMC stories.
Second branded offering AMC reality will launch later this month.
In the quarter, we saw strong audience performance in our southern central and Northern European divisions, the walking dead the ones, who lives became the number one show in the history of the AMC plus in Spain, and just recently premiered in Latin America as well.
As we continue to focus on building our brands expanding our partner relationships and serving viewers. We're very confident in our ability to weather. The changes that are happening in what remains a dynamic operating environment.
Patrick will discuss our financials in detail in just a moment I'll note that we recently strengthened our balance sheet by completing a series of financing transactions that meaningfully extended our debt maturities. This allows us to continue to leverage our core strengths.
We're generating significant free cash flow and have a strong balance sheet that allows us to focus on deliberate execution of our multiyear strategies, we're taking advantage of our unique position and strengths and we continue to produce quality content and make it available to viewers across a range of platforms.
As the world changes around us were successfully reorienting, our business and our prospects around the consumer driven changes that are happening across the industry with that I'll turn the call over to Patrick.
Thank you Kristen we are pleased with our first quarter results and we remain on track to achieve our financial outlook for the year.
This includes year over year free cash flow growth for 2024, and approximately half of $1 billion of cumulative free cash flow by the end of 2025 <unk>.
I'll start with a high level review of our results for the quarter, then I'll provide a summary of the recent actions we took to strengthen our balance sheet. Then I'll briefly discuss our outlook and then we'll move to Q&A.
We've made significant progress and we arent seeing our business in a tough environment. Our endemic strengths have allowed us to act quickly and decisively to achieve an equilibrium balancing investments in our most important asset our content with the generation of significant free cash flow to maintain our healthy balance sheet.
While we remain vigilant we are pleased with the results we see today.
This is more than just the strong performance of the walking dead. The once you live or the diverse and exciting slate, we have teed up for the rest of the year, which Christian just highlighted but also the meaningful free cash flow, we delivered in the first quarter and our expectation of continued cash generation going forward.
Onto our first quarter consolidated results.
Consolidated revenue decreased 17% to $596 million in the quarter.
Excluding nonrecurring revenue from silo to AMC studio series, we produced for Apple TV and $25 seven media in the prior period revenue decreased 6%.
Adjusted operating income was $149 million.
Representing a 25% margin and we generated $144 million of free cash flow in the quarter.
Free cash flow in the quarter increased meaningfully as compared to the prior year period and reflected our prudent content investment strategy as well as the timing of productions and certain tax items.
Touching on our segment financials domestic operations revenue decreased 14% to $524 million in the first quarter exclude.
Excluding silo revenue decreased 6%.
Content licensing revenue decreased 40% to $62 million due to revenue related to the delivery of episodes of silo in the prior year period, which was partly offset by the sale of killing Eve as well as the timing and availability of deliveries in the current period.
Excluding the impact of silo licensing revenue increased 31% year over year.
On our last call I discussed, how the walking dead and fear the walking dead at historically been top performers.
Thankfully for us our studio produces a broad array of high quality content for us to monetize across Windows territories.
So while those two titles may be important to us in 2024, we expect those titles to represent a modest fraction less than 20% of our domestic operations content licensing revenue.
Moving to subscription revenue.
Subscription revenue decreased 7% due to a 14% decline in affiliate revenue, which was primarily driven by linear subscriber declines and was partially offset by streaming revenue growth of 3%.
Sort of a rate event, that's shutter strong growth at <unk> and an increase in total subscribers to $11 5 million at the end of the quarter.
Advertising revenue declined 13% due to lower than that your ratings.
With acquired programming underperforming relative to our original programming as well as a difficult AD environment, which was partially offset by continued digital growth.
In terms of marketplace dynamics, we've seen scatter show signs of improvement across linear and digital as the year progresses.
As we look forward to this year's upfront one.
One thing we hear consistently is that buyers want more flexibility in how they transact and we feel well positioned to meet their needs as a market leader with robust buying capabilities to support this market need.
Domestic operations.
<unk> was $162 million for the quarter with a healthy margin of 31%.
The year over year decrease in NOI was largely driven by the revenue decline was partially offset by continued cost discipline.
Moving onto our international segment, which as a reminder, no longer includes the results of $25 seven media.
First quarter revenue was $76 million, representing a decrease of 3% excluding the contribution from <unk> media in the prior year period.
Adjusted operating income was $13 million for the quarter with a margin of 18%.
Moving to the balance sheet and.
In April we completed a series of financing transactions to proactively address upcoming maturities.
This included tapping the market to issue $875 million of New 2029, senior secured notes retiring all $775 million of our existing senior unsecured notes due 2025 and extending the maturity of our credit facility to 2028.
Adjusted for the closing of these transactions we ended the quarter with net debt of approximately $1 7 billion and our consolidated net leverage ratio of two eight times.
Adjusted for the closing of these transactions. We currently have approximately $775 million of total liquidity.
<unk> approximately $600 million of cash on the balance sheet, and our undrawn $175 million revolver.
Yeah.
Since the third quarter of 2023, we've paid down more than $500 million of gross debt.
The proactive and prudent management of our balance sheet affords us a valuable flexibility as well as the ability to fully focus on the evolution of our business as the new video landscape continues to take shape.
We appreciate the flexibility and optionality that our current cash balance affords us.
Additionally, we believe that our current capital structure or is that potential opportunities for us to deploy our cash flow in a value accretive manner overtime.
On the topic of capital allocation, our philosophy remains prudent and opportunistic.
Wed like to support the business by creating and acquiring compelling programming that resonates with our audiences, while maintaining healthy levels of profitability and cash flow generation.
Second we look to improve our balance sheet by reducing gross debt and optimizing our capital structure.
Third strategic M&A and returning capital to shareholders remain further down our current priority list.
I'll now summarize and reiterate our outlook.
We are pleased to reiterate that we expect to grow free cash flow year over year in 2024 and that by 2025, we expect to have generated cumulative free cash flow of approximately half a billion dollars.
Regarding revenue we continue to expect total revenue of approximately $2 4 billion for the full year.
Moving to AOE for 2024, we continue to expect consolidated <unk> of 550 million to $575 million.
Continued screaming in digital advertising growth as well as disciplined expense management remained a focus despite revenue headwinds and all of your business.
We also continue to expect programming amortization to be similar to 2023 levels and cash programming spend to be approximately $1 billion in 2024.
Before we open it up for Q&A I would like to reiterate what I've said before in the past regarding our overarching financial approach.
AMC networks is employing a back to basics approach that emphasizes broad distribution of our content across platforms and prioritizes near term monetization while at the same time, taking advantage of our unique position as a nimble and innovative premium programmer.
We will continue to allocate our capital wisely to ensure we maintain a healthy balance sheet remained extremely disciplined on expenses and balance appropriate levels of programming investment against available monetization opportunities.
We are pleased with the progress we've made on these fronts and look forward to delivering one of the strongest content slates AMC networks has had in recent memory.
Operator, please open the line for questions.
Certainly as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
One moment for our first question.
Will come from David Joyce with Seaport Research partners. Your line is open.
Thank you on the distribution side of things I was wondering what are you seeing in terms of the incremental cord cutters from here is it the effect.
Is it a factor of older demographics love being replaced by the younger cord Nevers.
Or are you still seeing the people who are looking for some price differential and if it is the pricing what do you think it'll take to get the industry.
And I think that you are maybe further along thematic lievens than some other entities, but.
In terms of making our programming available.
Whatever platform, but what's it going to take for the whole industry to be agnostic as to where subscribers are watching thanks.
Hey, David It's Christian.
Long run good morning.
Across the board I think we're seeing you saw we had some growth in our streaming subscriptions this quarter and which is interesting for us because we haven't actually scraped or linear programming to support our streaming services. So for us we're somewhat agnostic to the platform on which we deliver the content because we gave everybody.
All of our best stuff.
Our list of where they want to watch, but I do think the skinny bundles will probably help.
As you know is more distributors focus on that opportunity and then saying things like unlimited broadband from Comcast.
And different approaches to just distribution of broadband capabilities will probably help kind of smooth this out going forward, but Neil for US again, our motto has always been to deliver everything we can.
Whoever wants to view it in whatever format. They want to view it. So that's really our focus, particularly since we're not tied to a distributor.
Okay.
Do you still have more of those agreements.
To come or have you already are you already set.
Hey, David It's Patrick I'll take it.
Yeah listen we've got fantastic relationships with our existing distributors, obviously, we just recently.
Announced the renewal of our deal with Verizon.
You should assume that at even at any given point, we're sitting in front of between 25% to 50% of our of our distribution footprint. As you. All know these are long standing highly symbiotic relationships that are multi dimensional in terms of their economics, we add tremendous value into these.
<unk>.
To these distributors and also obviously to the to the end consumer given that our programming punches way above its weight from a kind of price too.
Two.
Chuck on the audience delivery perspective, so we like those dynamics that are appreciated by our distributors.
We continue to have sort of very open constructive and frankly innovative conversations with these distributors as the world continues to evolve here in terms of having to distribute streaming products, having them participate on the advertising side of the business et cetera. So it's really more the evolution that Kristin described so we feel well such way.
In that regard given how much value we add into the traditional bundle and we think that carries over as the perfect analogue as this sort of bundling of streaming products comes to the fore as well so.
We like the cards that we hold in that respect.
Alright, thank you.
One moment for our next question.
Our next question will be coming from Thomas year of Morgan Stanley. Your line is open.
Thanks, So much I wanted to ask about churn management opportunities on the streaming side you cited some strong customer acquisition, but I think the net add decelerated a little bit in the quarter relative to fourth Q. The programming schedule ahead or any other mechanism you see have an opportunity to.
Joel a little bit for churn from show to show and maybe talk a bit about.
The overall programming slate and how that helps with the managing the churn over time.
Great. Thanks, Christian I'll speak to the <unk>.
The churn and then I'll, let Dan speak a little bit about our programming.
Our goal in all of the streaming services as we've talked about over the past few years is to provide a really good price value equation and given that we're significantly less expensive.
On our targeted streaming services, we see lower churn, particularly on products like Acorn and high Jive and so both of those services have undergone in the last quarter right events rate increases, where we saw minimal impact to our subscriptions and then we're also seeing increased engagement on each of those services.
As well as on Shudder, which we mentioned before so we feel pretty confident very confident actually that the services provide a robust platform of programming for very specific segments of people and then you know as we look at the programming slate. We're also identifying opportunities to share content amongst the different streaming services because the.
Audiences are somewhat unique so we're monetizing what we have in a variety of places and then really super serving the fans of the niche services that we offer at a competitive price. So Dan I don't know if you want to add on the content slate I'll just reiterate.
Our services Super serve passionate fan communities and engaged distinct audiences and were designed to operate efficiently at a much more reasonable level of subscribers compared to larger general Entertainment services and this drives lower levels of churn and win backs. We have as you know we have five streaming platform linear five linear platform.
Seven streaming platforms as well as 18 SaaS channels multiple Ava platforms. So consequently, our ability to efficiently window content throughout our ecosystem.
Allows for maximum audience exposure in aggregation and importantly revenue generation and this is one of the things that makes us really distinct and compelling.
Got it Kristen you sounded excited about the AD supported streaming opportunity we've heard about elevated inventory driving some pressure on premium CPM as more entrants come into the space is there any color on just market dynamics around <unk> and <unk> and what you expect out of the opportunity to.
Maybe replicate the RFP that youre seeing on that side.
I'm glad you picked up on that Thomas we are very excited about AD supported version of AMC, plus we can speak to that a little bit and then as well as our announcement about launching AD supported versions of our other streaming services in the next 12 months and beyond so Kim you want to just spend a minute on the CPM. This stuff gets a little a little heady, but sure.
Sure I actually.
Time for the question so little early for upfront predictions right now, but we feel affinity is solid upfront and we think that we are pricing our premium.
Content and.
A very thoughtful way, we're not looking to out prices. So we'll leave it to others to compete in that space. We're looking to actually serve impressions across all of our distributions and and continue to put together a solution for our marketers and advertisers need to reach as many of their targeted.
Subscribers as possible across the entire media ecosystem, but we're not looking to out price ourselves and feel we are in a competitive place right now.
Understood. Thank you.
One moment for our next question.
Our next question will be coming from Robert Fishman of Moffett Nathanson. Your line is open.
Robert Fishman: Hey, good morning, everyone.
I'm wondering if you can talk more about your bundling strategy for AMC plus and your other streaming services curious how should we think about the opportunity for the company to participate in a broader industry re aggregating of streaming services.
Maybe for your direct company partnerships like the recently announced Disney Parks, Hulu and Max deal or do you see the aggregation path more just through the typical standard aggregators like Amazon are okay, and maybe just add if theres any way to share like what percent of your streaming today direct or through third parties.
Thank you.
Hey, Robert It's Christian Unfortunately, we can't answer the last question on the D to C versus partners, but I will say that.
We see great opportunity in bundles are.
The work that we did last summer with Max was really positive for us and in garnering insights and also helping us understand the ability to put the AMC brand.
Robert Fishman: In its own space amongst other content that that people can subscribe to so we're actually we were excited to hear about the Disney plus Hulu Max bundle, we think.
In a way it is sort of recreating family cable and putting all the entertainment products together and we as evidenced last summer fill we sit quite nicely along along the same lines with our content from AMC AMC plus and all of our other services. So we expect to see more streaming bundles, we are more than happy as we've said to participate in.
In them and we have quite a few conversations going on right now that we hope to share some insights on going forward you wont have anything yeah, I'd love to we've been an early adopter of bundles being one of the first two bundle on Verizon plus play with Netflix and then we have current bundles right now with both MGM and stars that are.
Are performing very well and we continue to pursue opportunities with other programmers in this space both on the DTC and partner side.
Absolutely.
Sorry, Robert the one thing I was going to add is the AD supported versions of the targeted services now offer us additional opportunities because we can we can bundle with people that are also AD supported so it really doubles and allows us to double down on opportunities in this area. So we feel really well positioned.
Perfect. Thank you.
As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press Star One again, our next question will be coming from Charles Wilbur of Guggenheim Securities. Your line is open.
Hi, Good morning. Thank you two if I may.
First on content licensing you noted excluding the silo comp that that was up about 31% I wondered if you could share any color on what drove that underlying growth and kind of how to think about the puts and takes in the balance of the year. I know there was some impact from accelerating the Hulu agreement last year.
Robert Fishman: And then secondly on the affiliate trends I believe you've now lapped the <unk> non renewal there and so it appears that underlying affiliate trends may have accelerated a bit sequentially in the first quarter here. So just any color on the drivers here rate versus volume or anything.
Whether there's any updates to the full year outlook.
The 10% decline.
Given that you didn't reiterate that in the prepared remarks there. Thank you.
Hey, Charles it's Patrick Thanks for the question I'll take them in turn.
Patrick: First on content licensing I think as we said consistently yes, theres always a robust market for premium programming.
And I think we saw that in Q1 that we called out the sale of killing Eve in particular.
So we feel very good about the.
The remainder of the year, we obviously got back a bunch of content as we unwound. The Hulu deal last year. So that is content that is sitting on the shelf.
Patrick: Got it okay lines of sight across both international and domestic markets.
And there is some interesting opportunities percolating, there I would say so.
More to come but we feel very good about that on the affiliate side I'd reiterate what I said at the at the top of the call which is these relationships are very healthy very dynamic.
We're in conversations with partners continuously here.
Hear you on the 14% in Q1.
But I think as we've said before as well, we're taking deliberate actions here.
Proactive with many of our partners.
And the durations of our deals.
So what's the cord cutting it's minus 7% or so our universe looks a little bit different than that so it's kind of high single digits on our affiliated universe. So I'd just kind of put that on the table for you is water.
Incorporated into your into your thinking, but we are very much focused on duration here and we'll trade a little bit of duration for a little bit of rate as the as the deals come up so I would think about that as well, but now we are holding.
On the on the guidance broadly both in terms of total revenue and the components for now thanks.
Yeah.
Great. Thank you.
And our next question will be coming from Steven Cahill.
Of Wells Fargo.
Steven Cahill: Steven Your line is open.
Thank you.
Three for me, maybe so first Patrick thank.
Thank you for the two year free cash flow guide really big free cash flow in the quarter should we think of any of the half a billion being more heavily weighted to 2024 versus 2025.
Or was this kind of some timing of spend in Q1.
And then secondly, just on your licensing philosophy overall I think you got steer back from Hulu late last year I think you have international rights for the walking dead, maybe coming back this year in domestic isn't isn't too far off.
Is that kind of philosophy here that you want to put all this together and then you can re license for a bigger some or do you think more about keeping it.
<unk> on your own streaming services to drive value and then just lastly, how do you think about AMC as a studio for third parties I know you've kind of walked away from silo, which is very capital intensive focus more on programming of your own assets. It does seem like there is still a pretty strong demand for projects.
And the and the broader streaming community. So how do you think about kind of AMC as a studio versus.
Our network or a platform at this point thank you.
Hey, Stephen It's Patrick will take these in turn I'll start with number one on the free cash flow.
Really helped the quarter.
As you noted it was more timing than anything else in terms of just production.
We also had a couple of tax items and they're both on just tax credits.
As well as <unk>.
Reasonably kind of modest.
Kind of tax event that gave us a sort of low tens of millions of dollars in the quarter to the good.
In terms of <unk> 24 versus 25, I think we'll stick with what we've been saying consistently which is we're going to grow over the run rate free cash flow out of 2023, which is $231 million. So we feel really good about growing that into 'twenty four and continue to feel very good about the $1 billion over 24%.
25, but but this was a really heavy quarter recognize that so it'll be not.
Not quite exactly going forward, you're obviously given that.
Given the guide there thats the free cash flow piece.
Hey, Steve It's Tim I'm going to jump in on the licensing and I would say it's.
We're really thoughtful about it when you have franchises leg fear the walking dead coming that are Reits coming back our way we look at each of these franchises very carefully.
Considered way, especially internationally, it's more region by region, where can we monetize it most effectively and make sure we're reaching the largest number of fans. So it's not a one size fits all we're very very careful and thoughtful about how we how we license these franchises.
Steven Cahill: So if it makes sense in one territory to roll everything up.
Steven Cahill: Into a larger walking dead package, we will consider that and and are having those conversations and where it makes sense to hold it back we will hold it back based on based on our own.
Steven Cahill: Streaming plans.
It is Kristen I, just want to reiterate to.
Kristen: So your question Steven re licensing for a bigger some are keeping it we really do bolt depending on the area. So.
That's I think what's allowed us to continue to optimize our growth in the content distribution revenue line. So.
Dan do you want Steve This is Dan I'll take the video piece. So AMC studios is a vibrant and productive group that produces for every one of our platforms.
And these shows enable us to build a library, which accrues real value over time for the company and it allows us to execute on the monetization of this content and long tail monetization monetization now and over time and so the studio is really important to us and asked for producing for outside platforms our production capabilities.
Abilities in the volume of programming that we produce at AMC Studios gives us the opportunity to be highly tactical and selected and we have shows like silo that.
Don't fit for us with fit for other platforms, we're going to take advantage of those opportunities. It's not our primary business, but we certainly envision producing more shows for outside platforms. As we proceed forward.
Thank you.
Okay.
And I'm showing no further callers I would now like to turn the conference back to Nicolas for closing remarks.
Thank you all for joining US today. This concludes the call have a nice day.
Thank you for participating you may now disconnect.
Kristen: Okay.
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Kristen: Okay.
Okay.