AMC Networks reported higher first-quarter net income as subscription revenues rose, but ad revenue declined.
AMC has been touting the growth of its streaming services. The company said it remained on track to meet its projection of having 9 million subscribers by the end of the year, but did not give a specific figure for the end of the quarter.
CEO Josh Sapan called streaming the company's "most significant growth area" and said paid subs could reach 20 million to 25 million by 2025. At that point, streaming would represent the company's largest revenue segment, he said.
First quarter net income was $87 million, or $2.02 a share, compared to $68.7 million, or $1.22 a share, a year ago. Operating income was down 1.9%.
Revenue fell 6% to $691.7 million.
Revenue for AMC’s domestic operations, which now include the company’s streaming service, fell 6% to $574 million and operating income decreased 4% to $216 million. Marketing expenses supporting AMC’s streaming services increased.
Subscription revenue was up 14%, driven by what the company called “robust” growth in streaming revenues, but offset by a low-single digit decrease in affiliate revenue. The drop was called by subscriber universe declines.
Advertising revenue fell 7% to $199 million. The company blamed the timing and availability of original programming caused by COVID-related production delays.
“AMC Networks had solid performance in the first quarter and we are on course to meet our 2021 financial and streaming targets, including reaching at least 9 million paid subscribers by year end. The transition of the company to be the worldwide leader in targeted streaming on the strength of our focused, strong content continues on track,” Sapan said.
“The support of our distribution partners for our streaming efforts and our advanced advertising strides are providing us with both stability and momentum. We believe the high viewer engagement, efficient economic model, and pricing power of our streaming offerings provide us with important strategic advantages which, when coupled with our valuable linear channel offerings, will fuel our growth and continue to position us very well over the near and long term,” he said.
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