AMC Networks estimates a 30% drop in ad revenue in Q2

[ad_1]

Andrew Lincoln as Rick Grimes and Jeffrey Dean Morgan as Negan featured in The Walking Dead on AMC

Gene Page | AMC

AMC Networks said it expects advertising revenue to drop around 30% in the second quarter as marketers pull or delay spend and some shows see delays in production due to the  Covid-19 pandemic. 

AMC Networks, whose properties include AMC, BBC America, SundanceTV and more, saw its stock up more than 1% Tuesday morning after reporting first-quarter earnings.

The company said it saw a 10.8% decrease in ad revenue in its first quarter, to $213 million. The company said this was principally due to lower ad delivery as well as the timing of airing of original programming, which it said was offset partially by higher pricing. In mid-March, the company said it began seeing ad sales impacts and suspended content production, which has led to delays in the creation and availability of some of its TV programming, such as “The Walking Dead” season finale.

This comes as a slew of ad-based businesses warn about a big impact to the second quarter as many advertisers have pulled back spending or postponed campaigns until later in the year. 

The company’s president and CEO Josh Sapan said the pandemic has had an immediate impact on its ad sales, particularly in categories most affected by shelter-at-home mandates, like travel, auto and restaurants. 

He said the company is also seeing short-term impact from marketers reducing, pausing or shifting ad investments. Sapan said he is having conversations with ad partners to change up the ads they’re showing to reflect viewership trends and current consumer behaviors, or mapping audiences across its linear and non-linear platforms like Pluto or Slin

AMC’s CFO Sean Sullivan said the company anticipates ad revenue in the second quarter will be down in the range of about 30% year-over-year. 

“Ad revenue at the national networks has clearly seen the most immediate and significant adverse impact,” Sullivan said. “While ratings have improved across our portfolio, monetizing these ratings has proven to be a challenge.” 

Sullivan said results in the second quarter will be impacted by the delays of the airing of the season finale of “The Walking Dead” and the premiere of a new series called “The Walking Dead: World Beyond.”

Asked by analysts if there have been any glimpses of stability in recent weeks, AMC Networks’ Chief Operating Officer Ed Carroll said it was too early to say. He said one positive is that much of the money moving away from the second quarter will flow to the networks in the second half of the year. 

“In individual conversations, I think there’s optimism that when the economy reopens, marketers will want to spend and not lose market share, but I think it’s just too early for us to make any more specific characterizations,” he said. 

The trend has hit other television companies as well.

Last week when Comcast reported first-quarter earnings, it said its broadcast television advertising revenue was consistent with the prior year period, reflecting higher pricing and local political advertising, offset by audience ratings declines and reduced ad spend because of Covid-19. Across its cable networks, ad revenue decreased 2.2%, reflecting audience ratings declines and reduced ad spend because of the postponement of sports and offset somewhat by higher pricing. Comcast warned advertising will be down “significantly” in the second quarter, but did not give a specific estimate like AMC did on Tuesday.

Other networks, including Disney’s ABC and ESPN, Discovery and ViacomCBS, will share glimpses into how their ads businesses are faring when they all report earnings this week. Disney is scheduled to report earnings Tuesday afternoon.

[ad_2]

Source link