Q4 2024 AMC Networks Inc Earnings Call
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Speaker Change: Good day, and welcome to AMC Networks, Inc.'s fourth quarter 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. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Nick Seward, VP of Corporate Development and Investor Relations.
Speaker Change: Thank you Nick and good morning, everyone. We appreciate you joining us today before I get into the call I wanted to say that we've been focused on supporting our employees and creative partners in Los Angeles. During the recent devastating fires we're thankful for the heroic efforts of firefighters and first responders and recognized a long term period of recovery and rebuilding that.
Speaker Change: Lies ahead for our people in the entire city.
Speaker Change: I also wanted to acknowledge the recent passing of our founder and long time, Chairman Charles Dolan.
Visionary an industry icon, who created businesses like cable vision, H B O and AMC networks, Mr. John always took a long range view and business building companies and shaping industries with a clear strategic vision we.
Speaker Change: Had the privilege and responsibility of continuing that approach today and into the future as we execute on our core strengths and advantages and navigate the changing world of media.
Speaker Change: Now to our results.
Speaker Change: As we look back on the fourth quarter and full year 2024, I'm encouraged by our progress.
Speaker Change: Patrick will report on our financial results and outlook in greater detail, but I'm pleased to report that even in this uncertain and shifting environment, we achieved our full year guidance for 2020 for.
Speaker Change: This includes consolidated revenue of 2.4 billion consolidated ally of 563 million and most importantly free cash flow of 331 million free cash flow generation has been strong and today, we are increasing our outlook to approximately $550 million of cumulative free cash.
Speaker Change: Cash flow over the 'twenty four 'twenty five period.
Speaker Change: At a time when all media companies are facing challenges our size nimbleness and independence allow us to move quickly to create new opportunities for ourselves and for our partners. Our innovative mentality is driving our approach to content creation distribution advertising and new partnerships this freedom and ability to.
Speaker Change: Take a more imaginative approach to our business played out in a number of ways over the past year.
Speaker Change: We ended 2023 with an unconventional experiments and put some of our shows on the Max streaming service, where they quickly became top titles in 2024, we built on the success with an expansive branded licensing agreement with Netflix that featured prior seasons of more than it does a number of shows including some of our most important franchises.
Speaker Change: We believe the exposure on this massive platform with Bruce fewer awareness and interest in our titles and that's exactly what happens the exclusive availability of currencies on AMC plus drove viewership and acquisition on our own platform.
Speaker Change: The walking dead. The once you live was added to Netflix last month and appeared on the platforms U S. Top 10 lists the following day and remain there for weeks rising as high as number two ahead of squid game and other titles.
Speaker Change: As we prepare for the return of the U S streaming rights to the original the walking dead series in less than two years, it's great to see continued strong interest in this very active and vibrant universe.
Speaker Change: Our partnership and bundling activity continued in the fourth quarter, we launched a two month constant exchange with MGM class she promotes sampling and drive subscriptions on our respective platforms.
Speaker Change: Subscribers on both sides of the exchange reacted positively we saw double digit gains in engagement and acquisition on the AMC plus led by the SIFI horror series from and the walking dead Gerald Thanks, Tim was the top performer for M. G M plus spending multiple weeks and its top 10 list and peaking at number two.
Speaker Change: We expanded access to the M C plus and stars bundle by making it available through Vizio, we offered new bundles through Verizon and brought AMC plus to platforms like silo with a very positive consumer response. These arrangements helped drive healthy streaming subscriber additions in the fourth quarter. They also underscore the strength of our <unk>.
Speaker Change: These studios IP and ability to partner and reach viewers in new ways.
Speaker Change: As audiences continue to fragment our number one goal as a company is to produce incur a great chosen films and make that content as easy as possible for viewers to find in a very crowded and noisy world.
Speaker Change: This strategy requires management of our own platforms and strong relationships with our distribution partners.
Speaker Change: 2024, we renewed agreements representing about half of our U S linear footprint, including multiyear deals with charter Cox, Verizon and cable one among others.
Speaker Change: And a reminder, that our charter deal will make AMC plus available at no additional cost to all spectrum customers, who received the AMC as part of their TV package.
Speaker Change: This is in keeping with charters broader strategy to bundle streaming value Intuit's video service and will significantly expand the universe of people who have access to AMC plus.
Speaker Change: And the last 24 months, we renewed the vast majority of our Canadian distribution footprint with agreements that include easy access to AMC plus for our partners' video and broadband customers.
Speaker Change: We also saw a significant expansion of our fast channel distribution with major launches on platforms like Roku and Prime video and we closed a long term renewals Amazon Prime video channels for the distribution of our streaming services.
Speaker Change: We kicked off our 'twenty five 'twenty six upfront last week hosting some of our most important long standing commercial partners at an event spotlighting our technological leadership in advertising.
Speaker Change: Building upon previous advances and addressable and programmatic buying through our audience plus platform. We unveiled the groundbreaking attribution product called M. C. N outcomes, we now give our advertising partners real time insights into purchasing decisions that are driven by consumers' exposure to our partners' marketing messages another meeting.
Speaker Change: Full first for AMC networks.
And later this year as previously announced we will launch an AD supported version of our popular shatter streaming service.
Speaker Change: Let me share a few programming highlights across our linear networks targeted streaming services and film business.
Speaker Change: The fourth quarter included our two biggest annual programming events on AMC and AMC, plus fear first and best Christmas ever on linear TV AMC finished the quarter at the top 10 Entertainment network with adults 25 to 54 with fear first and best Christmas ever driving that network to its highest rated months of the year in October.
Speaker Change: In December P. C. Also attracted a record number of sponsors and advertising partners. This year.
Speaker Change: On streaming fear first drove AMC plus to record movie viewership with best Christmas ever also showing double digit year over year growth in film viewership.
Speaker Change: We TV remains the number one entertainment network on Friday nights among women in the 25 to 54 demo in 2024, we TV had two of the top three cable originals on Friday nights among women 25 to 54, including Mama June and Love After Lockup, which is also the number one Friday.
Speaker Change: Original among black women 25 to 54, followed by the Braxton at number two.
Speaker Change: The Brac since finished its first season as we Tv's highest rated new reality series in more than three years.
Speaker Change: BBC America, which we now fully just premiered the most recent BBC natural history Tentpole series, the stunning planet Earth Asia again narrated by Sir David Attenborough.
Speaker Change: We are excited to kick off 2025, with a robust slate of highly anticipated new original programming, including the second season of Anne Rice's Mayfair witches and the highly anticipated third season of dark wins exclusively on AMC and AMC plus we are excited for the return of dark wins on March 9th after the series' first too.
Speaker Change: <unk> spent an uninterrupted month on the Netflix top 10 list last summer.
Speaker Change: This year, we'll see the return of the walking dead that city.
Speaker Change: Thrilling new series called Nautilus, the third season of the walking dead Darryl Dixon set in Spain, and a new series and our growing and rice Immortal universe called Anne Rice's talent Masker the secret order.
Our targeted streaming services continued its a light viewers with the depth of content and distinct categories that are not available anywhere else shutter had an incredible year, releasing six of the top 10 horror films of 2024 as ranked by Rotten Tomatoes.
Speaker Change: Acorn TV brought fans another season of Jane Seymour and Harry Wild Sharon D Clark and Inspector Ellis and we'll premiere a new series called Irish Blood starring Alicia Silverstone later this year.
Speaker Change: This is a sample of the depth and appeal our targeted streaming services offer as research shows streaming subscribers continue to seek out special and distinctive as opposed to more of the same.
Speaker Change: IFC films had a fantastic year its diverse slate included critically acclaimed titles like Nomura of a snail, ghostlike the taste of things and late night with the Devil, which set an opening weekend box office record for the company.
Speaker Change: Want to congratulate everyone at IFC films for the recent Oscar nomination for memoir of US now and the best animated feature category. We're all incredibly proud of the film and grateful for this recognition.
Speaker Change: We've consistently emphasized programming partnerships and profitability as our key priorities and running this business and moving the company forward.
As we look back on our 2024 results and look forward to a productive year ahead I'd like to also recognize our people.
Speaker Change: This is not an easier straightforward time to be working in media, but as they see our progress I'm thankful for our collective ability to adapt evolve and lean into the advantages and strengths, we bring to this dynamic and changing marketplace.
Patrick: Now I'd like to turn the call over to Patrick for a detailed look at our financial results.
Thank you Kristen.
Patrick: I am pleased to report today that 2024 landed right, where we said it would.
Patrick: As a nimble and innovative premium programmer we've maintained focus on what is within our control despite challenging linear environment, where.
Patrick: We are proud of the progress we've made over the last two years, including Reorienting, our business around free cash flow investing in valuable World class IP and remaining focused on our balance sheet.
We achieved our full year guidance for 2024.
Patrick: <unk> related revenue was $2 4 billion.
Patrick: On an apples to apples basis, excluding 2023 revenue from $25 seven media.
Patrick: Silo to Hulu return of rights in 2020 for revenue related to the onetime advertising revenue adjustments at AMC Ni consolidated revenue decreased 6%.
Patrick: Consolidated operating loss was $40 million and included impairment and other charges of $400 million and restructuring charges of 49 million.
Patrick: Consolidated adjusted operating income was $563 million and most importantly, we delivered significant year over year free cash flow growth with free cash flow of $331 million.
Patrick: For the fourth quarter consolidated revenue was $599 million.
Patrick: Consolidated operating loss was 254 million and included impairment and other charges of $303 million and restructuring charges of $43 million.
Patrick: Adjusted operating income was $129 million and we generated free cash flow of $38 million.
Patrick: I will now discuss our segment results.
Domestic operations revenues decreased 9% to $2 1 billion for the full year and decreased 11% to $520 million for the fourth quarter.
Patrick: Subscription revenue decreased 5% for the full year and 4% for the fourth quarter.
Patrick: The decrease was primarily due to linear subscriber declines, resulting in a 13% decline in affiliate revenue for both the year and the quarter.
Patrick: This was partially offset by streaming revenue growth of 7% for the year and 8% for the quarter.
Patrick: We ended the year with $12 4 million streaming subs representing year over year increase of 8%.
Domestic operations advertising revenue decreased 11% for the year and 12% for the fourth quarter.
Patrick: The decrease was primarily due to lower linear ratings and a challenging AD market for entertainment and was partially offset by continued digital growth.
Patrick: Digital advertising revenue, including addressable and revenue from our fast and <unk> offerings continues to grow at a double digit rate.
Patrick: And in 2024.
Patrick: Revenue represented approximately a quarter of our overall domestic operations ad revenue.
Patrick: Yeah.
Patrick: Content licensing revenue was $277 million for the full year and $67 million for the fourth quarter.
Patrick: There are a couple of items in 2023 that impacted the comparability of our 2024 results, including the final delivery of AMC Studios produced episodes of Siloed to Apple and the early return of rights from Hulu, which resulted in $56 million and $20 million of onetime revenue in 2023, respectively.
Patrick: Excluding these items, our full year licensing revenue increased 4%.
Patrick: As our library grows every year, we have more skus to sell and while some of our bigger ticket shows like fear the walking dead contributed less meaningfully towards 2024 results as compared to 2023. This was more than offset by new business, including Netflix sky in the UK and increased licensing volume from our targeted services.
Patrick: Domestic operations AOI was $620 million for the full year and $152 million for the quarter.
Patrick: Margins for both the full year and fourth quarter were 29%.
Patrick: The year over year decrease in NOI for the full year was largely driven by continued linear revenue headwinds for.
Patrick: For the fourth quarter the increase in NOI is primarily driven by lower expenses and streaming revenue growth, partly offset by linear revenue headwinds.
Patrick: Moving to our international segment.
Patrick: International revenue included advertising revenue related to retroactive onetime adjustments reported by a third party of $21 million for the full year and $7 million for the fourth quarter.
Patrick: Excluding $25 seven media, which we divested a year ago and the onetime adjustments I just mentioned international revenues decreased 3% for the full year and increased 2% for the quarter.
Patrick: On an apples to apples basis advertising revenues grew 16% and 12% for the full year and fourth quarter respectively.
Patrick: This was largely the result of the strong performance of our <unk> offerings on the ITV X in the U K as well as increased ratings and growth across our central and northern European advertising markets.
Patrick: Subscription revenues declined 11% for the full year and 5% for the quarter.
Patrick: For the full year the decrease in subscription revenue was attributable to the non renewal of a distribution agreement in the U K that occurred in the prior year.
Patrick: For the quarter. The decrease was primarily driven by unfavorable FX.
Patrick: Moving to international excluding.
Patrick: Excluding the onetime adjustments to advertising revenue full year, AOI was $45 million with a 15% margin in fourth quarter was $1 million.
Patrick: Onto the balance sheet.
Patrick: We ended the year with net debt of $1 6 billion in.
Patrick: And our consolidated net leverage ratio of two eight times.
We remain focused on our balance sheet and we're pleased with the results of our efforts over the last 24 months.
Patrick: This includes gross debt reduction of approximately half a billion dollars.
Patrick: And the completion of a series of financings that extended our maturity profile now with no bond maturities until 2029.
Patrick: Additionally, we have maintained a healthy cash position and ended the year with approximately $1 billion in total liquidity.
Patrick: This includes $785 million of cash on the balance sheet, and our undrawn $175 million revolver.
Patrick: We appreciate the flexibility and optionality of our meaningful cash balance and continue to expect our capital structure will present attractive opportunities for us over time.
Patrick: Our capital allocation philosophy remains prudent and opportunistic.
Patrick: First we look to support the business by creating and acquiring compelling programming that resonates with our audiences, while maintaining healthy levels of cash flow generation.
Patrick: Second we remain focused on continually improving our balance sheet by reducing gross debt and optimizing our capital structure.
Patrick: Lastly, M&A share repurchases and dividends remain further down our priority list.
Patrick: Moving on to our outlook for 2025.
Patrick: Start with our most important metric free cash flow.
Patrick: Christian mentioned on the heels of strong cash generation. We delivered in 2024, we are pleased to update our outlook today for the two year period ending 2025.
Patrick: We now expect to generate cumulative free cash flow of approximately $550 million by the end of 2025.
Patrick: This implies approximately $220 million of free cash flow for the full year 2025.
Patrick: Our outlook contemplates increased cash interest payments, resulting from the recent refinancing activity as well as a year over year increase in cash taxes as we lap certain tax benefits recognized in 2024.
Patrick: Looking at revenue for 2025, we expect total consolidated revenue for the full year 2025 to decrease approximately 5% as compared to 2024.
Patrick: Implying total revenue of approximately $2 3 billion.
Patrick: As it is still early in the year, the geography of certain revenue and expense items may shift as the year unfolds.
Patrick: Notwithstanding that I'll unpack the current assumptions that underpin our outlook.
Patrick: First regarding domestic operation subscription revenue, we expect 2025 subscription revenue to be flat as compared to 2024.
Patrick: We anticipate that linear subscriber headwinds will persist and will result in slightly worse year over year affiliate revenue growth as compared to 2024.
Patrick: This will be offset by accelerated streaming growth stream.
Patrick: Streaming revenue growth will be driven by price increases expanded distribution of our offerings and discretionary marketing investments.
Patrick: As such we expect streaming revenue growth in the low to mid teens percent area as compared to 2024.
Patrick: With respect to advertising revenue as I mentioned earlier digital advertising revenue growth remains robust and we're now growing off a more meaningful base.
Patrick: Notwithstanding that the linear ratings environment and entertainment AD marketplace continues to be challenging.
Patrick: Therefore, we expect 2025 domestic advertising revenue to decline approximately 10% as compared to 2024.
Patrick: Content licensing remains an important source of revenue for us and we continue to be innovative aggressive and disciplined regarding this important revenue stream.
Patrick: As you know licensing revenues are often deal dependent and it can be lumpy due to timing, we're shifting delivery schedules.
Today across the many desirable titles in our library, we anticipate approximately $250 million of domestic operations content licensing revenue for 2025.
Patrick: For AMC networks International we expect revenue in the range of $290 million to $300 million for the full year 2025.
As I discussed earlier, we recognized $21 million of one time adjustments that benefited advertising revenue in 2024.
Patrick: For 2025, excluding these 2024 adjustments, we expect year over year international advertising revenue growth.
Patrick: Additionally, we anticipate that subscription revenue will decrease year over year, largely owed to our recent nonreadable with Movistar in Spain.
Patrick: We expect that this non renewal will represent a $15 million headwind to both revenue and AOI in the segment.
Moving to expenses.
Patrick: For 2025, we expect consolidated technical and operating expenses to increase as compared to 2024.
Patrick: Driven by higher non amortization technical and operating expenses, including certain duplicate expenses related to our technology outsourcing transformation.
Patrick: This will be partly offset by year over year decrease in programming amortization related to our 2025 slate timing of competition and programming write offs that occurred in 2024.
Patrick: For SG&A, we anticipate a year over year increase in SG&A expense for 2025, primarily related to increased streaming related marketing investments focused on driving our retention, which we anticipate will drive profitable streaming growth.
Patrick: In terms of consolidated adjusted operating income, while we see strong streaming and digital advertising revenue growth and expect our portfolio of streaming services will contribute to our consolidated OE in 2025.
Patrick: The dynamics I, just discussed including continued linear revenue headwinds and year over year expense growth remained the primary factors in driving our outlook.
Patrick: As such we expect consolidated AOI for the full year to be in the range of $400 million to $420 million.
Patrick: Cash programming spend can vary quarter to quarter and year to year and for 2025, we expect a slight decrease in year over year cash programming spend due to the timing of our programming commitments.
Patrick: As Christian said earlier, we take a long range view of the business and we're managing AMC networks with a clear strategic plan centered around programming partnerships to profitability.
Christian: As we enter our third year since Reorienting. The business. This strategy continues to animate our market approach.
Christian: Our commitment to creating high quality content remains at the center of everything we do.
Christian: As an independent nimble and innovative premium programmer, we approached the marketplace a bit differently than others.
Christian: Including building out our library of powerful franchises monetizing our content across an evolving distribution ecosystem and driving profitable outcomes.
Christian: We'll continue to preserve capital with a focus on our balance sheet and cash flow generation and balance appropriate levels of programming investment against the available monetization opportunities.
Christian: Operator, please open the line for questions.
Christian: Thank you if you'd like to ask a question. Please press star one one.
Christian: If your question has been answered and you'd like to remove yourself from the queue. Please press star one again.
unknown: Our first question comes from Thomas <unk> with Morgan Stanley. Your line is open.
Christian: Thanks, so much.
Speaker Change: Wanted to ask about the free cash flow outlook in the context of your cash spending and comments.
Speaker Change: The $930 million of cash spend you put up and I think this year ended up being a little bit lower than the one billing you guided to and you still see further decreases in 2025, how much of that is timing versus just an increased focus on efficiency in your outlook updated in terms of how you see the.
Potential opportunity for.
Speaker Change: Putting new content to work in the system.
Speaker Change: Sure Hey, Thomas this is patrik. Thanks for the question.
Thomas: Our strategy remains the same right, which is balancing investments in our programming with driving profitability in the business, obviously programming as are our largest expense category.
Speaker Change: We're.
Speaker Change: Ordinarily focused on maintaining.
Speaker Change: A portfolio.
Speaker Change: Super high quality scripted programming.
Speaker Change: Linear streaming et cetera, we continue to do that even as others have pulled back from the market and frankly the differentiator.
Speaker Change: Many of our affiliate <unk>.
Speaker Change: <unk>. So our strategy has not changed in terms of the specifics are free.
Speaker Change: Free cash the cash programming spend came in a little bit lighter.
Speaker Change: <unk> thousand 24 than we had initially guided to.
Speaker Change: This is us just being prudent we're able to produce on a per episode basis.
Speaker Change: A little bit better than we expected we've got some fantastic people internally, who were taking an available or are taking advantage of all the tools available to produce efficiently. So we've been the beneficiary of that and we have also instituted a program, where we're sharing more content across channels platforms et cetera, that's allowed us to.
Program brought our company a bit more efficiently, but we obviously we remain committed to.
Speaker Change: <unk>.
Speaker Change: Similar levels of cash programming spend going forward, so I would say efficiency.
Speaker Change: Got it.
Speaker Change: The reason for the be quote unquote in 2020 for slight reductions in volume going forward, but not significant we are producing at similar volumes going forward into 2025.
Speaker Change: The slight decrease that I expect in cash programming for 2025.
Speaker Change: It has to do with sort of those two factors I would say one modest reductions in volume, but not not anything dramatic and then too.
Speaker Change: And you might appreciate this.
Speaker Change: There is a lag in our receipt of certain tax credit receivables and those are going to if there is a bunch of them theyre going to hit in 2025, So those net out against our cash programming expenses and that's that's driving part of that reduction in the year over year decline.
Speaker Change: Okay.
Speaker Change: Just wanted to just reiterate and we were pretty specific about it in the script.
Speaker Change: Quality of the content that Dan and team continue to produce is it's very reassuring to see essentially got a netflix the Oscar nod.
Speaker Change: For memoir, and just overall the response that we have an engagement that we have to this shows that we're producing.
Speaker Change: And we've really been able to capitalize when shows like Gerald take similar were filming in Spain or in France on tax efficiencies. We have some shows planned in Canada.
Speaker Change: We do a lot in Ireland, so we're really optimizing without in any way compromising the integrity and the quality of what's coming out of our shop.
Speaker Change: Okay understood Thats helpful.
Speaker Change: Some nice momentum in the streaming subscriber growth continued into <unk>. It sounded like bundled partnerships helped but also the Netflix licensing deal was a contributor as well can you maybe just tease out the balance of the contribution between those two and how we kind of see the outlook being supported in 'twenty five from volume perspective.
Patrick: They are an AMC plus and maybe the future of that targeted streaming services and then if I could just squeeze one last one in that same kind of context, just a clarification on the guide is the charter deal showing up in some allocated forum between affiliate and streaming in terms of the sub components. Patrick that you provided thank you yes sure.
Speaker Change: Great. Thanks.
Allison: Allison on the on the streaming subs.
Allison: We continue to have pretty good momentum across all of our services and when you look at it across the entire business.
Allison: We have the lowest churn or we had year over year declines in churn on a consolidated basis across the portfolio. So obviously retaining subscribers.
Allison: Helps helps helps drive the numbers.
Allison: We've also as you pointed out being the beneficiary of some fantastic.
Christian: Arrangements as Christian has talked about.
Christian: A lot we are very nimble very flexible we love to partner with others, who are highly complementary we think it adds value into the ecosystem. It's great for consumers. It's obviously, great for us in terms of being able to distribute product.
Christian: With a little bit less.
Christian: Kind of hard marketing dollars. So those are very efficient.
Christian: Go to market.
Christian: Channel for us.
Christian: As we look forward into 2025.
Christian: We're expecting really helps the streaming revenue growth that'll be driven by a lot of price action.
Christian: But also kind of a unit volume as well.
Christian: So we're really excited about this momentum and I'd point out for folks.
Christian: If you unpack the guide you'll notice that we've called out sort of flat subscription revenue year over year. So.
Christian: That implies almost $100 million of incremental revenue here, which is going to essentially offset some of the secular declines in the business. So super excited about that in terms of the specific geography on the guide in terms of revenue you should assume that that charter deal.
Christian: Baked into the.
Christian: The specific revenue line items that we gave more to come on.
Christian: Importantly that deal doesn't kick in until Q1, So we'll have more to say in terms of the details in terms of subscribers, but you should just take the guide at face value at this point Carter real estate debt and just to add on the streaming equation. The partnerships that we're engaging in for bundles are important but also our relationships with our wholesalers.
Christian: So Amazon Roku phyllo other folks that we participate within tradition. In addition to the traditional mvpds are really critical and they are great partners, and giving us data and insights around our subscribers and our utilization. So we're getting smarter and better at really identifying in a privacy compliant way who's watching.
Christian: What and how to engage with them. In addition to the communications that are coming from there.
Christian: There are subscription provider. So if Amazon is talking to a customer we know, but then we can supplement that conversation with specific.
Christian: Sort of nonsense.
Christian: Suggestions to keep the engagement level high and then I'm, particularly proud here.
Christian: I am really learning and taking a page from sort of the cablevision playbook on triple play and retention marketing that we're getting really sophisticated and smarter about retaining customers as opposed to just going after and spending subscriber acquisition money to bring them on board. So we're learning a lot and heavily heavily focused on retention with <unk>.
Christian: Obviously, we will pay for itself in the long run.
Christian: I appreciate it thank you so much.
Thomas: Thanks Thomas.
Speaker Change: Thank you as a reminder, if you'd like to ask a question. Please press star one one.
Speaker Change: Our next question comes from David Joyce with Seaport Research Partners. Your line is open.
Thank you could you. Please provide some more color on what kind of lift in viewership and linear ad revenue.
Speaker Change: Our interpolating is probably coming from licensing your content to Netflix.
Speaker Change: And given you did say there is double digit growth of digital advertising just was wondering what it'll take to get that OBL segment, including linear to get closer to matching the connected TV ad growth. Thanks.
Kim Kelleher: Sure David This is Kim Kelleher.
Kim Kelleher: Thanks for your question and just clarify the Netflix partnership is not AD supported on platform, even though our shows are distributed on both their AD tier and on their AD free tier if they are distributed and then no add way.
Speaker Change: So there is well I just want to clarify that one point, but to your to your next question I do believe we are making great progress.
Speaker Change: The innovation, we're doing in advertising, which is really focused on three areas.
To make our inventory more available to buy seamlessly to use data as Christian just talked about and targeting to make our inventory more valuable and then last packaging our inventory in a cross platform way so that marketers can access our full scale of viewership.
Speaker Change: At once regardless of how they watch TV so.
Speaker Change: We've mentioned on past calls, we've innovated with making our.
Speaker Change: Debut with industry first biddable programmatic buying capabilities embedded across our linear networks. We have added AMC plus AD supported inventory to our cross platform solutions and that's been incredibly well received by the marketplace, we're adding a shutter added tier as Pat just talked about in Q.
Speaker Change: One so that will add.
Speaker Change: Inventory as well alright.
Speaker Change: To say in fall.
Speaker Change: And then it's that way, we package that inventory like really delivering boson Russ to advertisers that are looking for targeted.
Speaker Change: Cohorts and audiences really engaged fan communities.
Speaker Change: And it's working incredibly well.
Speaker Change: Most recently as Christian talked about in her remarks at the top we launched outcomes, our new performance product, that's built into our audience plus insights and data targeting platform and this allows advertisers to see campaign outcomes and optimize delivery in real time.
Speaker Change: So what I'm, saying is cumulatively, we are making tracks towards.
Speaker Change: Leveling out.
Speaker Change: The differential between the declining linear environment and the growth in our digital environment.
Speaker Change: Just going to take a little bit of time.
Speaker Change: I appreciate that what I was.
Speaker Change: I'm looking for I guess was how.
Speaker Change: How are you interpolating your.
Speaker Change: Licensing to Netflix into what.
Speaker Change: What kind of incremental viewership youre attracting on your linear properties.
Speaker Change: Do you like the new seasons of what you've put onto to Netflix for example.
Speaker Change: I think it's not so much I guess, the direct correlation with linear but I would say what we are.
Speaker Change: We're thrilled about is as we are launching the new seasons of these shows that we're on Netflix prior we're seeing significant increases in AMC plus acquisition.
Speaker Change: Based on people watching the earlier seasons on Netflix So we definitely see a strong correlation between debuted on the massive platform that is Netflix and then they are hungry for more so they come back to us and purchase AMC plus to see the latest which is exactly why we it's the Netflix effect that we talked about on the last call and Thats definitely.
Speaker Change: <unk> has worked really well for us.
Speaker Change: Understood and just one final thing if I could please on the content licensing are there specific projects that are being sold to third parties like you did with the silo or is everything is still going to be.
Speaker Change: For your.
Speaker Change: For your services.
Speaker Change: Yes, David This is Dan Mcdermott.
Speaker Change: From the studio side currently we are producing pretty much exclusively for our AMC owned platforms right. Now we do have a studio we are able to produce for third parties, when it's beneficial to us and it makes financial sense.
Speaker Change: We do have a lot of interest in our studio content. So we're going to be strategic and opportunistic as we go forward and when it makes sense and we can generate revenue and to be clear.
Speaker Change: To the business, we'll explore those opportunities.
David: David I think Patrick.
Speaker Change: Yeah from the finance side Youll recall the guide last year for 2024 was $225 million of run rate content licensing revenue that was based on our current level of production.
Speaker Change: At $2 50, this year right. So I just wanted to get that helps sort of contextualize. The fact that one we continue to produce at very healthy levels and to the market continues to be extraordinarily receptive to the programming that we are producing so it's.
Speaker Change: It was a net growth driver in 2024.
Speaker Change: Think it is going to continue to be a tailwind.
Speaker Change: Hi.
Speaker Change: Great. Thank you.
Speaker Change: Thank you again, if you'd like to ask a question. Please press star one one.
Speaker Change: There are no further questions at this time I'd like to turn the call back over to Nick Seaberg for any closing remarks.
Nick Seaberg: Thank you all for joining us today have a good day.
Speaker Change: Okay.
Speaker Change: Thank you for your participation. This does conclude the program you may now disconnect good day.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.