AMC says Acorn TV may have lowest churn rate in the market

Acorn TV
AMC Networks' Acorn TV, which offers British dramas and mysteries like "Agatha Raisin," has more than one million subscribers. (Acorn TV)

AMC Networks has a collection of four subscription streaming services which it said focus on specific audiences, a strategy that has helped the company improve subscriber acquisition costs and churn.

During the company’s fourth quarter earnings call this week, CEO Josh Sapan said Acorn TV is now the company’s largest SVOD with more than one million subscribers. He also said the service, which offers British dramas and mysteries, may have the lowest churn rate of any service in the marketplace today.

“By focusing on specific segments and because we're not trying to be all things to all viewers, these businesses have an economic profile that is radically different than those of large general entertainment streamers. We are programming and marketing to a highly specific audience, and we can be very selective in our content and marketing investment, taking advantage of efficiencies versus spending all one needs to spend in general entertainment subscription video-on-demand,” Sapan said, according to a Seeking Alpha transcript.

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The company said it now has more than 2 million subscribers combined for its four core SVOD services: Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel). Those services could soon reach a wider audience thanks to a new distribution agreement AMC Networks set with Dish Network and Sling TV.

Both Dish’s satellite and streaming TV services will now offer AMC’s four SVOD services along with AMC Premiere (an ad-free version of the cable channel) and IFC Films.

“We’re pleased to expand on our successful longtime partnership with DISH with the launch of our diverse portfolio of growing ad-free and targeted on-demand services and continued carriage of our linear networks,” said Josh Reader, president of distribution and development for AMC Networks, in a statement. “Much like our linear channels, our ad-free services provide passionate audiences with exceptional content and new ways to innovate with valued distribution partners like DISH as our businesses evolve together.”

AMC is also planning international growth for its SVOD services. The company said it's developing overseas distribution on a direct basis and through deals with international MVPD partners.

Right now, AMC said its SVODs generate about $100 million in revenue on a run rate basis, and the company expects margins for the services will reach “healthy levels” by 2024. The company previously said it expects to between 5 million and 7 million streaming subscribers by 2024.

AMC Networks’ consolidated net revenues increased 1.6% to $785 million during the fourth quarter. However, operating income was down 69.6% to $42 million, which led to a net loss of $9 million during the quarter.