AMC Networks has revised the original subscriber growth targets for its streaming video services and now expects to hit those targets two years ahead of time.
The company said today that Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel) will have 3.5 million to 4 million paid subscribers in aggregate by the end of 2020. The company had previously said it expected to hit that target by the end of 2022.
AMC Networks also previously forecast that its streaming services will have 5 million to 7 million paid subscribers by 2024. The company didn’t update those numbers today, but it did suggest encouraging signs that its accelerated growth trend may extend forward.
AMC Networks has been pursuing a targeted subscription approach, which CEO Josh Sapan said is “quite different from going for big share – and this is not meant to be disparaging – and burning lots of cash along the way.” He said AMC has been balancing investment with performance and subscribers while being mindful of what his company thinks the total market opportunity is.
“It has been pleasing to see us surpass what we thought was a milestone that had some ambition, and diagnosing whether that’s early take up or whether that is a greater market opportunity than anybody anticipated is something that will have to wait at least some amount of time. But the trajectory is very good,” Sapan said.
He added that people aren’t “taking free trials blindly” right now but spending more time with the services.
Chief Operating Officer Ed Carroll said that when people sign up for the company’s SVODs, AMC is able to immediately discern what show or series they go to first, what their completion rate is, how quickly they go onto the next episode and what their total minutes streamed is in an average week or month.
“We’re seeing all those engagement levels in a very high place,” said Carroll. “When we pull back and look at the model, we certainly think we’ve pulled forward some subs due to the isolation. But based on engagement levels we’re tracking we anticipate that churn rate will not increase too much as the year goes on and we think we’ve significantly leapt the model forward for all our SVOD services for cumulative subs and revenue.”
Despite the faster growth for AMC Networks' SVODs, the company's International and Other revenues for the first quarter decreased 0.3% to $170 million while operating loss increased $6 million to a loss of $19 million and adjusted operating income decreased $2 million to $8 million.