AMC Networks, Like Paramount, Sees Stock Dive Despite Positive Q4

AMC Network's IFC Center. Photo Credit: "ajay suresh"
AMC Network’s IFC Center. Photo Credit: “ajay suresh

AMC Networks exceeded Wall Street estimates for the fourth quarter. The sunny report from the company included 9 million streaming subscribers at the end of 2021. This result was in line with company projections. Revenue itself was up a modest 3% to $803.7 million.

Despite that positive Q4 report and significant progress in its transition to streaming, shares in AMC Networks are down a whopping 18% in mid-day trading.

Paramount Faced The Same Effect

Dipping below $37 a share, AMC Network’s stock found itself at its lowest point in a month’s worth of trading. At an initial glance, it’s challenging to identify specific causes for the selloff.

AMC Networks is an industry rival of ViacomCBS (known as Paramount now). That company’s stock also plummeted more than 20% after they reported their quarterly report along with a flashy presentation to investors. 

Many analysts raised eyebrows at Paramount’s attempt to hard pivot away from its traditional cable holdings and move toward streaming. Some analysts responded by lowering their price targets. Another analyst went so far as downgrading their shares. 

This situation seems to mimic the same pattern at AMC Networks — albeit with a dedicated streaming portfolio instead of a general-audience one.

AMC Networks Portfolio Of Streaming Services

AMC Network’s portfolio of niche streaming services, including AMC+, Acorn TV and the horror channel Shudder, is on target to reach their projections of 20 million to 25 million subscribers.

For the full year in 2021, AMC Networks reported record revenue of $3.1 billion, up 9% from the previous year.

Advertising revenue slipped 1% in the fourth quarter to $234 million. The company blamed lower linear ratings, emphasizing higher pricing and ad-supported streaming increases as counter-balancing factors.

Adjusted operating income fell $122 million in the quarter (16%). However, the company cited an increase of investments in “subscriber acquisition and retention marketing,” which, they say, will support the continued growth of their streaming services.

In AMC Network’s earnings release, interim CEO Matt Blank praised the streaming subscriber tally as “a significant milestone,” driven by the fortitude of their streaming brands and the breadth of “content within each of our offerings.”

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Last year, Blank climbed into the driver’s seat after Josh Sapan, longstanding CEO and company exec, stepped down. This event was one of several changes in the C-suite at AMC Networks, part of a reckoning with the changing media era.

By focusing on niche streaming, the company hopes to derive most of its revenue from the digital sphere by 2025. This change in direction marks a significant change for a steward of cable networks that were once the focus of its profitable and growing business.

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