Q1 2025 AMC Networks Inc Earnings Call
Good day and thank you for standing by welcome to the AMC networks first quarter 2025 earnings Conference 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 you will then hear an audit.
Speaker Change: Made it 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 hand, the conference over to your first speaker today, Nick Seaberg Senior Vice President of corporate development and Investor Relations. Please go ahead.
Speaker Change: Thank you good morning, and welcome to the AMC networks first quarter 2025 earnings conference call joining.
Joining us this morning are Christian born Chief Executive Officer, Patrick O'connell, Chief Financial Officer, Tim Kelleher, Chief Commercial Officer, and Dan Mcdermott, President of Entertainment and AMC Studios.
Speaker Change: 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.
Speaker Change: Today's call May include certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Speaker Change: Such forward looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ.
Speaker Change: Please refer to AMC networks as E SEC filings for a discussion of risks and uncertainties the company.
Speaker Change: <unk> disclaims any obligation to update any forward looking statements made on this call today.
Speaker Change: We will discuss certain non-GAAP financial measures.
Speaker Change: The required definitions and reconciliations can be found in today's press release and with that I'd like to turn the call over to Kristin.
Kristin: Thanks, Nick Good morning, everyone. It was 18 months ago on this call that we first talked about programming partnerships and profitability as our three major areas of focus in running this business.
Kristin: Since then I've been proud of our performance overall and particularly in these three categories, especially in a time of uncertainty and change.
Kristin: Every media company today is trying to find its own path forward in a world that is increasingly complex.
Kristin: Our path is focused on the clear advantages we have in this moment and in the future. We make great shows, we're nimble and independent with the freedom to experiment and evolve and our strong distinct brands are home to some of the most passionate fans and entertainment.
Kristin: Our continued focus on profitability is driven by the strategic and disciplined steps we've taken to re imagine this company, while prioritizing the generation of free cash flow as a reminder, last quarter, we revised our two year cumulative free cash flow guidance upward to $550 million over the 'twenty four 'twenty five period.
Kristin: He used to report that we're off to a strong start this year generating $94 million in free cash flow in the quarter.
Kristin: In terms of distribution, we believe our strategic advantages in this or any environment are that we are fast moving opportunistic and able to deliver products that create value for our company as well as for our partners. For example, we developed an AD supported version of AMC plus in part to give our partners additional flexibility in how their customer.
Kristin: Connect to our high quality programming that product is now part of our long term affiliation agreement with charter serving both their desire to bundle streaming value into their existing video service and our uncle of expanding access to our shows and films. We're already seeing an excellent response to AMC plus from charter subscribers as we did.
Kristin: When we launched an integrated version of AMC plus on silo last year.
Kristin: We continue to meet advertiser demand for our programming and brands, while also making our services available to the broadest possible audience.
world's best service for horror fans.
Kristin: We're also launching a new fast channel, ACORN TV mysteries, to drive interest and awareness in this beloved streaming service focused on thrilling mysteries and crime dramas from around the world. This fast channel will raise the visibility of the ACORN streaming service, promote sampling of our content, and, for the first time, give advertisers early access to ACORN's loyal and highly engaged audience.
Kristin: We've made significant progress in partnership with Comcast Technology Solutions to standardize and modernize the back-end support for our content distribution. This important and ongoing work will support our goal of meeting viewers wherever they are, while accelerating our time-to-market, enhancing cross-predictability, and ensuring we are supported by the most advanced efficient technologies available.
Kristin: On the topic of partnerships, I do want to mention our recent upfront content showcase in New York.
Kristin: This year, we expanded the event to include our most important partners across advertising, distribution, and technology, giving them exposure to the great slate of content we will be releasing in the coming months. It was a meaningful moment for the company and an approach we plan to continue in the years ahead.
Kristin: In our upfront conversations, we're seeing strong interest in the new AMC and outcomes attribution product and have added new data sources that expand the categories of advertisers who can benefit from this technology.
Kristin: We've also announced several exciting new integrated marketing offers, including an innovative branding opportunity with Sphere, as part of our annual Fear Fest programming event.
Kristin: I'll end with our high-quality premium programming and the vibrant franchises that drive everything we do, particularly as a company with a studio able to create lasting value by developing, owning and distributing distinctive IP.
Kristin: This quarter we saw the celebrated series Dark Winds return for a third season, once again earning high praise from critics and fans.
Kristin: The series delivered a premier night audience of approximately 2.2 million viewers would direct to consumer acquisition on AMC Plus up significantly from the prior season. The show has the incredibly rare distinction of a 100% score on rat and tomatoes for all three seasons.
Speaker Change: Darkwinds is currently in production on Season 4, and we see a very long life for this series that has become a franchise unto itself, led by Star and Executive Producers on McCartan, who is already generating Emmy buzz.
Speaker Change: Just last week, the Walking Dead Dead City returned for its second season with an international promotional push that generated significant attention and delighted the active and engaged fans of this franchise.
Speaker Change: AMC Plus saw its biggest single day of direct-to-consumer subscriber acquisition since last year's season 2 premiere of The Walking Dead Darryl Dixon. Later this year, Norman Reedus and Melissa McBride will return for a third season of Darryl.
Speaker Change: Also along the way this year is an important expansion of our Anne Rice Immortal Universe. A third series will feature the Talamasca, a secretive organization that has been present in both interview with the vampire and Mather Witches.
Speaker Change: Tala Masca, The Secret Order, will serve as a bit of a through line, connecting all three shows, while being bold and distinctive in its own right. Interview and Mayfair are preparing third seasons that will take the storytelling in exciting new directions next year.
Speaker Change: We recently announced a new franchise and development called Great American Stories. Each season of this anthology series will be devoted to a different classic novel, play, or moment in history that is distinctly American.
Speaker Change: We're planning a first season around the grapes of wrath, the John Steinbach classic that is as timely and relevant today as when it was published in 1939. More to come on this exciting concept, which has already generated strong interest in the creative community.
Speaker Change: We're currently in production on a new series called The Audacity from talented writer Jonathan Glatzer that will bring to viewers next year. This series Set in Silicon Valley has a stellar cast led by Billy Magnison and including Sarah Goldberg, Simon Helberg, Rob Cordray, and the unique talent that is Zach Galaphanakis.
Speaker Change: Our targeted streaming services, which are built to super serve fans of specific program genres for a reasonable price, remaining a strong differentiator for us.
Speaker Change: ACORN TV, the home of thrilling crime dramas and engaging mysteries, has news shows on the way from beloved stars Alicia Silverstone and Brooke Shields, along with an expanding slate of returning originals.
Speaker Change: Last week, we launched a new month-long programming event on ACORN called Murder Mystery May.
Speaker Change: Similar to AMC's popular and long-running peer fest, this event offers ACORN's loyal fans a packed month of news shows and continuing franchises like Harry Wilde, Murdoch Mysteries, the Broken Wood Mysteries, and many more.
Speaker Change: Shutter continues to cement its reputation as the premier service for horror fans. Later this year, we'll debut a new competition reality show from Greg Nicotero, called Guts and Glory. Shot on the set of the Walking Dead in the woods of Georgia.
Speaker Change: I also want to call out WTV, which continues to serve up some of the most entertaining and conversation-sparking franchises on television.
Speaker Change: The success of Love After Lockup helped make WTV a top cable network with women on Friday nights and is enormously popular on streaming in CTV and fast, everywhere we have aired this real life prison and relationship drama. [inaudible]
Speaker Change: Mama June delivers viewers season after season and relative new comertoria and Regine has also become a breakout hit, returning for its second season in the quarter and growing viewers in key demos from season one.
Speaker Change: Our film group, which is seeing significant success across theaters, EST, and our own streaming platforms, just rebranded under a new name, IFC Entertainment Group.
Speaker Change: This banner includes the independent film company IFC Center, RLJ, Films, and Shutter. Our newest release, Clown in a Cornfield, is already generating significant buzz from horror fans and premieres tonight in theaters.
Speaker Change: This is just a snapshot of what we're doing in programming, furthering the vibrant franchises we're building and level of creative talent with whom we work. We're proud of our continued strong commitment to quality and of the kinds of shows and stories we're bringing to fans even during a time of change and transformation in our industry.
Speaker Change: I want to thank you all for your time this morning and for your continued interest in AMC Networks Now I'll turn the call over to Patrick for a more detailed look at our financial results
Patrick: Thank you, Kristin. As a nimble and innovative premium programmer, we continue to focus on what is in our control amidst continuing linear headwinds and recent macroeconomic uncertainty.
Patrick: This includes the reorientation of our business around free cash with generation, investing in our valuable and sought after IP and franchise expansion, and maintaining flexibility across the operating business and the capital structure.
Patrick: We are pleased with our first quarter results, particularly regarding free cash flow, which was 94 million in a quarter. We remain solidly on track to achieve our outlook of approximately $220 million or free cash flow for the full year.
Patrick: Consolidated Net Revenue declined 7% year-over-year to 555 million. Consolidated AOI declined 30% to 104 million with a 19% margin. Adjusted EPS was 52 cents.
Patrick: I'll now discuss our segment results. Domestic operations revenue decreased 7% to 486 million. Subscription revenue decreased 3%, due to a 12% decline in affiliate revenue, and was partly offset by streaming revenue growth of 8%.
Patrick: With a launch of ad-supported AMC-plus on Charter at the end of March, we felt it was important to refine certain aspects of our streaming subscriber and subscription revenue definitions.
Patrick: Therefore, customers who receive our services as part of a video package that also includes our linear networks are no longer included in our streaming subscriber count.
Patrick: This includes charter spectrum TV select and filo customers who would have been counted as subscribers under our prior definition
Patrick: Well, these customers will no longer be included in our streaming subscriber count. They are important to us as we employ our partner-focused distribution strategy.
Patrick: We expect to provide further updates over time regarding the trending of these customers to ensure a holistic picture of AMC's programming distribution.
Patrick: We cast historical streaming subscribers can be found in the earnings release we issued today.
Patrick: Regarding revenue, to ensure consistency, we've made commensurate changes to our affiliate and streaming revenue definitions. Our affiliate revenue component now includes revenue from distributors that provide their customers access to our streaming services through a video package that also includes our linear networks.
Patrick: Our Streaming Revenue Component is now entirely composed of all our cards of Stryphsons streaming revenue.
Patrick: The impact of prior period streaming and affiliate revenue is not material [inaudible]
Patrick: These definitional refinements better reflect how our networks and services are typically sold to our affiliate partners on a package basis as part of an affiliation agreement. And more importantly, provide a clean apples-to-apples comparison of our high-value intent-driven streaming subscriber base to our reported streaming revenue.
Patrick: In terms of streaming subscribers for the quarter, under our new subscriber definition, we ended the quarter with 10.2 million streaming subscribers, flat as compared to the prior year.
Patrick: Subscribers declined slightly as compared to 10.4 million subscribers at the end of 2024.
Patrick: The sequential decrease reflects our continued focus on higher-quality subscribers, which was realized through the implementation of tighter credit standards for new startups across our D2C and partner acquisition funnels, as well as the timing and cadence of our contensely and subscriber acquisition marketing.
Patrick: We are already seeing the benefits of the further strengthening of our subscriber base with strong retention and engagement across the portfolio.
Patrick: In the first quarter, we saw a year-of-a-year improvement in retention, and in terms of engagement, we saw sequential double-digit increase in viewership, hours per subscriber.
Patrick: We're pleased with the diet that our services continue to offer and we successfully implemented rate initiatives that AMC plus and all black in the quarter.
Patrick: In April , we implemented a $2 rate of image shutter and will implement a $1 increase at both the T-Corn and High Dive in the second and third quarters respectively.
Patrick: We expect streaming revenue growth to accelerate as the year progresses and as the benefits of rate activity, new series of this day views and opportunistic acquisition and retention marketing compound.
Moving to Domestic Operations, Advertising Revenue
Patrick: Advertising revenue decreased 15% year-over-year, primarily due to lower linear ratings
Patrick: We are part of the same challenging ag markets as everyone else, but we remain encouraged by the strength of our programming and our significant advance in digital advertising capabilities.
Patrick: While there has been a recent uptick in macroeconomic uncertainty broadly, we remain highly engaged with our advertising partners, and we are not seeing meaningful indicators that suggest a material pullback.
Patrick: Content licensing revenue was 54 million for the quarter, reflecting the timing and availability of deliveries on the period.
Patrick: Licenseographies are often lumpy due to the timing of new deals and delivery schedules.
Patrick: As a reminder, we continue to anticipate approximately $250 million of domestic operations content licensing revenue for the full year.
Patrick: Domestic Operations AOI was $124 million for the quarter, representing a decrease of 24 percent.
Patrick: The decrease in ALI was largely driven by the continued linear revenue headwinds, increased S-T-N-A, including marketing expenses, and partly offset by lower programming expense.
Moving to our national segment.
First quarter, international revenue of 70 million decreased 7 percent.
Patrick: Subscription revenue decreased 12% due to the non-renewal with movie star and spain that occurred in the fourth quarter of 2024.
Patrick: Advertising revenue increased 5% through the increased ratings and digital and advanced advertising growth in the UK, partly offset by lower advertising revenues across our other European markets.
Patrick: International AOI for the first quarter decreased 26% to 10 million with a 14% margin.
Patrick: The decrease in AOI was largely attributable to lower subscription revenue.
Moving to the balance sheet
Patrick: Remain focused on our balance sheet, we ended the quarter with net debt of $1.5 billion and a consolidated net leverage ratio of 2.9 times.
Patrick: We have no bond maturities until 2029, a healthy cash position, and more than $1 billion of total liquidity.
Patrick: We appreciate the flexibility and optionality of our meaningful cash balance.
Patrick: We continue to believe that our securities will present attractive opportunities for us to deploy cash optimistically across the capital structure to create equity value.
Patrick: In April , we capitalized on volatility in the capital markets to open market repurchases of our 4.25% senior unsecured notes due to 2029.
Patrick: We repurchased $32 million a bond for approximately $23 million or roughly 71% of face value and captured approximately $9 million at discount.
Our Capital Application Philosophy remains prudent and opportunistic.
Patrick: First, we look to support the business by creating and acquiring compelling programming that resonates with our audiences.
or 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 Sherry purchases and dividends remain further down our priority list.
I'll now summarize and reiterate our 2025 outlook.
Patrick: We continue to expect free cash flow of approximately $220 million, consolidated revenue of approximately $2.3 billion, reflected continued linear headwinds, partially upset by profitable streaming and digital growth.
Patrick: and consolidated AOI in the range of $400 to $420 million.
Patrick: We continue to anticipate year-rear increase in technical and operating expenses, including approximately $10 million of expenses related to our technology, outsourcing transformation, as well as increase SG&A expenses given by streaming related marketing.
Patrick: We acknowledge that a lot has changed in the few four months since we issued our 2025 Outlook.
Patrick: It's still early in the year and the geography of certain revenue and expense items nayshift as the year progresses
Patrick: From where we sit, we haven't seen anything suggesting any meaningful impacts for our business, but we remain vigilant.
Patrick: We are well-capitalized with a large cast balance and no immediate financing needs.
Patrick: We continue to take a long-range view of the business and are managing AMC Networks with a clear strategic plan centered around programming, partnerships and profitability. At the same time, we are nimble and adaptable when and where we need to be. [inaudible]
With that operator, please up on the line for questions.
Speaker Change: Certainly. At this time, we will conduct a question and answer session. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by when we can power our Q&A roster.
Speaker Change: And our first question will be coming from Thomas Yeh of Morton Stanley, Thomas Yehlinus Open.
Thomas Yee: Thank you so much and good morning. Can you tell us a bit more about the streaming subscribers coming in through the bundled video packages? What's the update so far on Spectrum TV and are you seeing any risk of cannibalization on the all a cart side and it may be just a clarification on the affiliate revenues? Is it a variable? No, it's a variable.
Thomas Yee: A source of revenues based on sign-up, any color there that would be helpful.
I'll take the first one, Thomas. Good morning.
Thomas Yee: So on the streaming front, actually, we're very happy with the way things are going with Charter, and as we've spoken about in the past, our integration with Philo last year.
Thomas Yee: You know, Charter has a good sense of what they anticipate to take rates and, you know, importantly, the authentication for anybody that has access to the AM, that it streams services within their platform. And so we're tracking exactly where we wanted to be, so we're really happy with that as are they. Bye.
to your second question, Patrick, is there?
Speaker Change: Yes, or specifically on cannibalization, Thomas, you know, I would say listen, we are taking, you know, we are small and obviously we are taking a partner set of approach.
Speaker Change: to our distribution. That means through existing partners and new partners, obviously about long-standing relationships with charter, cost, disk, direct TV, etc., all of our traditional NPPD distributors.
Speaker Change: and we see incredible value and thus expanding the distribution of our content.
Speaker Change: We think this is going to create a much healthier video ecosystem.
Speaker Change: You could go so far as to say we're sort of, you know, kind of charter members of a charter's vision for an improved video ecosystem. We think this will one improve the video experience for customers broadly. We think it will help distribution partners as well in terms of packaging broadband or wireless with value enhanced.
video offerings.
Speaker Change: And we think it creates just a healthy or programming distribution ecosystem, kind of more broadly. We actually think that over time this is going to present additional revenue opportunities for the company in the form of upselling, you know, customers from an ad supported product to a premium product. We think it will generate additional viewership and engagement, off which we can drive additional advertising revenue.
Speaker Change: And we think it will also, again, in sort of success in healthier ecosystem and slightly reduced core cutting will create a more solid foundation of sort of a fully revered going forward as well. So we're taking a long-term view here, but we think there's a ton of upside in this strategy.
Thanks, Pat, on the third.
Speaker Change: Yeah, you've done the third part of your question there in terms of like the nature of the economics. I would say this is a really fluid. Um.
Speaker Change: environment we're operating in, right? We've signed a couple of these deals. Each one is a bit different, each one is a bit bespoke, so I don't think it's worth getting into sort of the
Speaker Change: of each specific deal. Suffice to say that we wanted to make sure that we were very clear in terms of, you know, streaming revenue being driven by our new streaming, you know, subscriber definition. And so that should make comparisons.
Speaker Change: I think more of the eyeball in terms of ARPU, CHURN, etc., so you have sort of clean numbers
Speaker Change: about it. That's helpful. And then maybe just the last one, Patrick, you mentioned no meaningful indicators yet on the macro related concerns for the at market. You may be just help us think through the year we are comparisons on ad declines to the balance of the year of their potential incremental tail in terms of the factors that you just mentioned as an offset some of the linear declines.
Yeah.
Patrick: Yeah, sure, I mean, Thomas, maybe what I'll do is I'll start with kind of our niche expectations for the year and sort of just to pose kind of Q1 performance versus that breakout sort of linear digital. I think that will be sort of a way to attack this. I think listen, the linear market remains challenged, right? That's sort of well understood. Our performance on linear almost entirely a function of the ratings environment. Yeah, that is very...
Patrick: It was a very similar dynamic to last year in terms of the split between ratings and what we call kind of marketplace or pricing. That's been consistent on the linear side year by year. In fact, in Q1, the near was frankly a little bit stronger than we had expected. It's been a little bit stronger than we had expected.
Patrick: You know, obviously overall domestic advertising revenue was down 15%. I would say the underperformance there was just to a softness on the digital side. You know, we're seeing the exact same friends as everyone else in terms of a lot more additional supply in the market, you know, kind of putting pressure on price, putting pressure on.
Patrick: on still rates as well. So that was sort of the underperformance that we noted in the quarter. As far as the balance of the year goes, listen, if the fluid market, these dollars, especially in the digital side, they can fast, they can come in, they can come out.
Patrick: You know, we're really pleased with the reception that our programming has received in the market, most recently at our upfront that continues to resonate with your partners.
Patrick: on a daily basis. And so we feel that with the tools that we've given to our partners in terms of an attribution and what not, we will be well positioned to kind of attack this market going forward.
Thank you.
Thank you, and our next question will be from David Joyce.
of Seaport Research Partners, your line is open.
Speaker Change: Thank you. I guess just a couple more add-ons there. It was just wondering how much of your advertising is coming from streaming at this point given that that's where some of the pressures are that's still in the like the low single digits portion of your advertising. And I was wondering on the international side when you wouldn't when you would be you know, lapping the the subscription revenue issues from the from the Spanish drop. Thank you. Thank you.
. . . .
Speaker Change: David, it's Kim. I'll take your first question on the streaming advertising. It delivers incremental
Speaker Change: Overall Revenue to our pool. However, it does give us because of our genre based services. It gives us a great opportunity on the sponsorship side for integrated partnerships and an opportunity for marketers to really actually
Speaker Change: Heavy hit the tip of the spear of the horror fans with the shutter launch and with our AMC franchises. So, it's part of an overall mix that drives actually significant dollars for the company
Speaker Change: It's Kristin. I'll take the international question. So with movie star, not to similar to BT in the UK a couple years ago, they've completely changed their strategy and as of last fall said they no longer wanted to carry any linear services. So similar to BT, we were probably one of the last ones that they had maintained.
Speaker Change: There's been some significant shifts in their senior leadership over the past month or so and we continue to speak with them but at the same time our growth in the Spanish market with other partners has been significant and so we anticipated this change we have plans in place to offset the revenue changes there and we're optimistic that we may have a different relationship with movies start going forward. [inaudible]
Speaker Change: And then just to add on that upon your financial question there, that happened at the end of the year 2024 so it's sort of a clean top in terms of if you're looking at a year of a year, number one, number two, this was built into our guidance so it's not a change in terms of how we're kind of attacking the year.
Speaker Change: Understood. And if I could just ask about the seasonality this year, any comparison challenges or benefits based on new originals coming on that impact the revenue or the cost side of things?
Speaker Change: Yeah, David, I'd call out one, I wouldn't call it seasonality, I'd call it more just, um...
Speaker Change: kind of cashflow dynamics in terms of the production schedule. You will have noted the very healthy free cashflow generation into one, I think the free cashflow generation is going to be kind of floated this year towards the first half, partly because we've got more production lined up in the back half.
Speaker Change: and in terms of the specific working capital dynamics, obviously there's some additional headwinds kind of below the line from increased interest expense, so we don't have to tax benefits.
Speaker Change: that we recognized in the first half of last year. Those have been mostly offset by working capital, kind of grab backs or good guys. We've been able to find this year, so that's the only, I think,
Speaker Change: No worthy seasonality aspect to the kind of the income statement that I think is worth calling out at this point.
Okay. Thank you.
Speaker Change: Again, as a reminder, if you would like to ask a question, please press star 1-1 on your telephone. Our next question will come from Steven Cahall, excuse me Cahall, of Wells Fargo. Your line is open Steven.
Stephen Cahill: Thank you. First, Patrick, maybe to just follow up on some of the seasonality questions. So I think revenue in Q1 was down a little bit more than what you've guided to for the year. Where do you expect that revenue acceleration to come from as we get through the balance of the year? Is that from streaming as you start to put through some of those price actions that you talked about? Is it some of the lumpiness to the content schedule for advertising? So just helping us maybe shape the year on revenue a little bit? And then I'd love to read.
Speaker Change: Visit the ad market. I think what we've heard kind of of.
Speaker Change: To sum up from the peer group this week is that there's definitely some of that digital weakness tough to tell what's going to happen in linear some caution but as you say kind of not downright challenges quite yet you
You know, I guess ...
Speaker Change: Following up, how much of the business do you think is exposed to some of these digital trends? And as you start to get into the upfront, do you think you can firm up some of the linear stuff to offset that would just love to kind of get a sense of how you broadly think about your advertising revenue growth expectations for the year versus maybe where you started last quarter. Thank you.
Speaker Change: Great, David. Patrick, I'll take the first and Kim, I'll take the second. In terms of the cadence of the revenue of the balance of the year, you've effectively answered your own question, which is with the price increases we put through on the streaming side in Q1 and we've got a couple more price actions to take in Q2 and Q3 as I mentioned in my prepared remarks. That's going to compound.
Speaker Change: Over time, and so you'll see an acceleration of pedestrian revenue growth.
throughout the year.
You know, the streaming revenue growth that we articulated.
as far as part of the guidance. [inaudible]
Speaker Change: was largely predicated on pricing as opposed to volume. Obviously, looking to grow both, but it was more pricing-heavy. And to date, the pricing actions you put through have taken extraordinarily well. So, in line with expectations, we feel really good about that. And then the second piece of the equation is obviously content licensing. It was a little bit lighter in this quarter. We had, frankly, a large...
Speaker Change: Deal, move from Q1 to Q2. So, you'll see that kind of rebound over the balance of the year. I wouldn't call it seasonality as much as I would just call it, so that the nature of the content licensing beast.
Speaker Change: But I think those are the two factors I call out in terms of the revenue acceleration over the balance of the year.
Hi, Steven.
Steven: I would definitely agree with our peer group in expressing that uncertainty in the marketplace.
Speaker Change: It is here, but it is not new. We've all been navigating these uncertain times since the pandemic. I feel like with specific to your questions, we have a highly trained sales organization at AMC that's in place to navigate these changes and fluctuations in an ongoing way. As Patrick mentioned, we're seeing real strength in our direct sales and our programmatic full business Q1 specifically, but that influx of supply is putting pressure on price for the marketplace overall. [inaudible]
Speaker Change: We're feeling very confident about our premium content, the shows that are coming, our advanced advertising capabilities that we've worked on for the last four years in earnest, and that continues to separate us from the crowded market, and it's delivering very unique value to our advertising customers. I think our goal is to focus on our viewers' first strategy.
Speaker Change: which is to make sure our viewers can watch our content wherever and whenever they want on any device at any time. So from this vantage point, I would say the increase in the inventory is actually a good thing showing viewership shifts into areas like fast and avod, areas that we fully embrace.
as a company from a distribution standpoint. I think the only other thing I just say is the impact of...
of what we're seeing.
Speaker Change: is something we're really trying to insulate ourselves against, and we're working very, very closely with our television distribution partners on making more and more of our linear inventory, D.A.I. enabled, which means digitally enabled, which actually this growth allows us to continue to let our content scale and digitally monetize against what has traditionally been a linear monetization environment.
Speaker Change: Streaming products are profitable and to Kim's point about digital you know we go through it a lot but people don't know as you remember we have 19 fast channels 136 feeds on 12 different platforms. So if you integrate that with the existing AD supported streaming services in AMC, plus and soon shudder and the others following behind that.
Speaker Change: Just keep expanding our capacity for digital advertising and then we couple that with the technological advances that we have to do both digital insertion on linear and then integrated selling of segments across all of these 136 instances of our of our products in a digital format. So it's all coming.
Speaker Change: Together, which helps us I think sustain our momentum when the marketplace gets a little a little chunky like it is right now.
Speaker Change: Thanks for all that and maybe just a quick follow up in case I missed this did you.
Speaker Change: Talk about what you expect content spend in content amortization to be this year that'd be helpful to understand through thanks.
Patrick: Hey, Stephen it's Patrick.
Patrick: Please report there is no change from kind of what we've been articulating in the past.
Patrick: Which is amortization is going to be probably slightly lower year over year cash content spend is also going to be down kind of slightly I would say, but important to note that the.
Patrick: The volume of productions are staying reasonably flat year over year in terms of the number of episodes that were producing across our platforms. We shifted the mix a little bit and we're trying to program the mess sufficiently as possible obviously.
Patrick: But theres been no change in the volume of production or the expectations around our cash content costs this year or in the quality I just wanted to reiterate a show like dark wins, which is extremely efficient in the amount of money that we spend per episode continues.
Patrick: So proud of the Rotten Tomatoes, 100% all three seasons the lift that we got on AMC plus this year for the season three premiere and just the overall awareness and interest in that series and then they continued interest in the walking dead and where we are.
Patrick: Excited for next quarter to give you some updates on how that city season to win and then we're looking forward to the next season of Daryl Dixon with the walking dead, but the unscripted also as we mentioned in the comments. The unscripted continues to perform really well in addition, and everybody knows that's less expensive programming too, but the edict from above.
Speaker Change: Which has been in place for Forever is we can never sacrifice the quality of what we create for any business situation and thanks, Lee Dan and the team continue to produce amazing content that is well received at a very reasonable price. So it's a big piece of our success.
Patrick: Great. Thank you thank.
Patrick: Thank you and I'm showing no further questions at this time I would like to turn the call back to Nick for closing remarks.
Patrick: Thank you for joining us today have a good day.
Patrick: Yeah.
Patrick: And thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Patrick: Okay.
Patrick: [music].
Patrick: Okay.
Patrick: [music].
Patrick: Okay.
Patrick: [music].
Patrick: Yeah.
Patrick: [music].