AMC Networks Interim CEO Touts “Beauty of Small Numbers,” Sees No Need to “Scale by Acquisition” - Hollywood Reporter

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AMC Networks, the company behind the AMC, IFC and Sundance Channel networks, as well as niche streaming services like horror-centric Shudder, is in “a great position with several notable strategic advantages,” including its smaller size that allows it to benefit from the “beauty of small numbers,” interim CEO Matt Blank said on Friday.

On the company’s third-quarter earnings conference call, his first public appearance since he took on the role, he was questioned about AMC Networks’ appetite for mergers or acquisitions given that Wall Street has long seen it as a potential deal partner given its smaller scale. “We don’t feel that it is necessary for us to scale by acquisition in any way, shape or form,” Blank replied, adding that the company was doing well with its focus on niche networks and streaming services. “The model is working” and is “sustainable,” he argued.

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But he hinted that AMC Networks could expand its focused streamers in other ways on its own or via small, targeted purchases. Blank said the management team is “constantly” evaluating building out its strategy by exploring organic ways of launching new offerings. He said the company is also approached “regularly” about “targeted ideas in the marketplace, and we are ready to move when we think there is an appropriate target in terms of genre and target audience and the economics.”

One of the key themes he focused his prepared remarks on was the upside of not directly competing with entertainment and streaming giants. Blank said AMC Networks benefits from “what I like to refer to as the beauty of small numbers and a very specific and carefully constructed approach to serving subscribers with targeted offerings that complement the larger streamers” that focus on having “something for everyone.”

Blank added that “we have great intellectual property and strong international content licensing revenue performance, which we are now transitioning to our streaming platforms’ revenue as we expand these efforts outside the United States.” And the interim CEO touted an “enhanced” content pipeline for 2022 and beyond.

It was the company’s first earnings report since it named the former Showtime Networks chief its interim CEO, taking over from company veteran Josh Sapan, in late August. In late September, AMC Networks also said that COO Ed Carroll would leave his post at the end of the year, ending a 34-year tenure with the company.

Blank said the beauty of small numbers would mean strong long-term growth opportunities for AMC Networks. Reiterating a target of reaching 20-25 million streaming subs by 2025, he said that “may seem small when set against the large streamers, however will be absolutely transformational for us” as a smaller company. For example, if the user target is reached, streaming would be “potentially the biggest contributor to our business,” Blank emphasized.

Blank on Friday also promised continued investment in brands, emphasizing that as a former marketing executive “brand building has always been in my blood.” In that context, he highlighted that it was “critical” to ensure a “meaningful enough” connection of media brands with consumers so that they enjoy using and paying for them. Blank concluded that “ensuring your brand has a voice and your brand stands for something” was particularly important in an age where consumers can cancel subscriptions with a single click.

“We are going to step on the gas pedal,” while taking advantage of lower content costs compared with the biggest streamers, Blank added.

Blank also touted the “huge runway” in international markets for AMC Networks’ brands, particularly in streaming.

Some Wall Street observers wondered if an often-suggested potential sale of AMC Networks could materialize as Blank’s contract was for only one year. For example, Hal Vogel, CEO of Vogel Capital Management and a former entertainment industry analyst, highlighted at the time that AMC, controlled by the Dolan family, has for a long time been seen as a potential takeover subject because of its attractive content and brands, as well as its lack of size in a fast-consolidating media sector.

At Showtime, Blank was instrumental in the launch of a standalone streaming service, as well as its early adoption of digital technologies. His tenure, including 20 years as chairman and CEO, “included numerous award-winning original programs, including Homeland, Ray Donovan, Shameless, Billions, Dexter, Weeds and The Circus,” AMC Networks highlighted when it unveiled his appointment. Blank also spent more than a decade at HBO, departing it as senior vp, consumer marketing.

Asked about Lionsgate’s decision to consider a separation of Starz, Blank said “we’ll see if they go anywhere.

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AMC Networks Interim CEO Touts “Beauty of Small Numbers,” Sees No Need to “Scale by Acquisition” - Hollywood Reporter
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