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spk06: There stands cross-platform measurement, attribution, and sales has been really beneficial, so we're in good shape there. On the distribution side, we don't, again, I'm a cable operator at heart. I would not bet against the MVPDs and the virtual MVPDs to find new and unique ways to solve kind of the customer management question of multiple services and streaming versus linear and really providing a great user experience across the board. So I love the fact that we have long-standing relationships with these distributors from a multi-platform perspective. So I think, you know, their success will be our success, and our goal is to have our brands front and center everywhere we possibly can. So that's a good piece. And then on the consolidation, you know, as you said, we have our transactional services, which are transactional VODs, which are, you know, unique in their approach and in what they deliver, but we also do have the more broad-based AMC+, which you know, does well for us and now includes Sundance, IFC, and Shutter as sub-brands within AMC+. So we don't anticipate any other combinations at this point, but AMC+, I think, would be, you know, our broadest general service, and the others continue to be targeted. So, Kim, you want to add anything else?
spk08: The only thing I would add is I think we're well-positioned for the emergence of the bundling that we're going to be seeing, which actually really meets a consumer need for for choice, and you can see bundling as being part of our strategy going forward.
spk02: If you wouldn't mind if I could squeeze in a question on a different topic. We're starting to get asked about the writer's strike, and I'm curious your take on at what point this could end up affecting the business, particularly in terms of series orders and deliveries. Thank you.
spk06: Thank you. I would say we're very well positioned for all of this year and into next year, so we have no real concerns about the writer's strike at this point.
spk02: Thank you for taking the questions.
spk06: Thank you.
spk09: Our next question comes from Douglas Kruitz with TD Cohen. Doug, go ahead with your question.
spk05: Thank you. I noticed your ST&A costs in the quarter were the lowest they've been, I think, since Q3 or so of 2020. Is this a good level to use if I'm thinking about SG&A costs going forward, anything sort of noteworthy in the quarter you call out that might make it abnormal?
spk03: Hey, Doug, it's Patrick. Thanks for the question. You know, over the last quarter or so, we've taken significant steps to take costs out of the business. That starts with both programming and marketing. Those are the two kind of biggest cost levers that we've had. So we've we've sort of done what we said we were going to do in that regard. A part of that, to Kristen's point earlier, was having to say goodbye to a number of our colleagues in Q4, and so you see the results of that kind of flowing through into the Q1 numbers here. So I would say yes, that's a reasonable number to use going forward here. And I think more broadly, what you should understand from us is that we are very much driving this business for margin. And so as a result of some of the cost action we've taken, both on the programming side and on the marketing side, we're seeing those reductions yield margin and AOI in this quarter, and we expect that to continue on through the balance of the year. So while we recognize it's a balancing act between investing in the business and having, you know, kind of growth levers to continue to attract the audiences and the partners that we have, that there's also an imperative here to drive the business for free cash flow today. So that's kind of, in summary, where we stand from an overall kind of cost kind of apparatus.
spk05: Okay.
spk03: Thank you.
spk09: Our next question comes from Robert Fishman of Moffitt Nathanson. Robert, go ahead with your question.
spk04: Good morning, everyone. Can you provide some more detail behind the strategic non-renewal at the end of 22 that impacted the affiliate fees and whether we should expect more of these decisions going forward? And then on the international strategy, just given the focus on cash flow, does it make sense to pull back on investing outside the U.S. and even sell some of these International Linear Networks. Thank you.
spk03: Yeah, hey, Robert. It's Patrick. On the strategic non-renewal, we have identified that as FUBO. I consider that, we consider that to be a one-off. I think FUBO had a strategic imperative to drive their business more towards live sports programming. We were one of the last remaining, you know, entertainment bundles that they carried. Obviously, we have an imperative to maintain, you know, kind of price discipline in the market as well. So, you know, as sorry as we were to see them go, it didn't make sense to continue the relationship, you know, kind of given the economics that were on offer.
spk08: And I would just add to that. This is Kim, Robert. I'd just add, obviously, in Kristen and Patrick's remarks around DISH, we are – We are well into conversations with all our key partners and anticipate long and successful partnerships.
spk06: Great. And on the international plan, I would just say, you know, international is really interesting. We serve a variety of different regions, and they have very different constructs than the U.S. right now. So, for example, northern Europe is is very hungry in Romania and those areas. Basic cable is $20 to $22 a month. There continues to be healthy margins coming from the international businesses that we have. Spain, we just had a major renewal in Spain. Sorry, I just wanted to confirm I'm allowed to speak about that. So we're widely distributed throughout Spain. and we will grow some streaming there. The UK is a little bit different, so we're working through that. But overall, even though it's a small percentage of our business, international is very healthy. It throws off very reasonable margins, and we continue to plan on spending time and energy there as appropriate.
spk04: Thank you.
spk09: Our next question comes from David Karnofsky with JP Morgan. David, go ahead with your question.
spk01: Just on domestic advertising, wanted to see if there was any color you can give on how demand trended through the quarter or into April. And then Kristen wanted to get your view on the content direction of the company. You're arguably at a time of transition with Walking Dead ending and some spinoff series beginning. So I guess first, what gives you kind of confidence in the health of that franchise. And then secondly, you know, there are areas from a programming perspective where kind of you see room for improvement. Thanks.
spk03: Yeah. Hey, David, it's Patrick. I'll start on the ad side and throw it to Kim for some additional color. You know, obviously the decline in this quarter was, you know, expected on our part. It was due to lower linear ratings, softness of the ad market, which we've spoken to, and few episodes of some of our tentpole franchise, including The Walking Dead. In particular, we were lapping a tough comp in Q1 in 22, I would say, with both Walking Dead and Better Call Saul. So these were anticipated. And frankly, we did a little bit better than we expected. So we feel actually pretty good about it. And as I said earlier, there's an immediate return on these reductions in programming that is significantly in excess of the foregone ad revenue. So clearly driving the business for near-term ROI, balanced against continued prudent investment. I'll let Kim talk to the color.
spk08: Yeah, briefly, David, I was just building off what Patrick just shared. I'd say, yes, we're seeing a similar environment to competitors in our space. you know, the soft scatter, and marketers really being conservative with their spending right now because of the economic uncertainty. That being said, we're seeing real category strength in both health and pharmaceutical spending, as well as telecom, personal care, and to your point about early April, we're seeing signs of life and spending from automotive coming back, so a trend we very much hope to see continue. The only other thing I just mentioned is we're also seeing very strong growth from our automated programmatic partnerships, which is enabling us to capture many more advertisers, which is giving our business more predictability and a solid foundation on the digital side.
spk06: Great. And then I'll take the content question. You know, David, the Walking Dead continues to be a very popular universe. And I just watched, I just screened the two Dead City, the first two, That'll be premiering next month, and that's the one that features New York City in the background. And this show is as compelling and engaging and dramatic as it's ever been, so we're excited to continue that franchise. I will say we were really, really pleased with the performance of Interview with the Vampire and particularly Mayfair Witches, and we have very high hopes for continuing to activate the Anne Rice universe and grow a whole other franchise through that acquisition of all of that IP. And then looking at the slate coming up that we spoke about in opening comments, Monsieur Speed with Clive Owen is killer. The Show Parish with Giancarlo is amazing. It's another New Orleans set kind of fast action, really interesting drama. And then Lucky Hank, which we had our final episode last Friday, did incredibly well and actually grew audiences week over week as people became more enamored, particularly for those of you that watched it. after episode five, which is like the pivotal point of the series. And then, you know, on the other, on the streaming services, we have some great films that we've acquired. So Corsage, The Lost King, and I think a lot of people read and heard about Skinnamorink, which was a sort of breakout horror film that we acquired this year that did really well. Between that and just, as we mentioned, you know, some of the anime content like Oshinoko and some of those shows, we're feeling really strong The other great premiere that's coming up later this month is on Acorn, which is Happy Valley, which is season three of a really good British crime drama that was like the top of the conversation when season three premiered in the UK a couple months ago. So I feel really good about our slate. As Patrick mentioned, like really settling down at around the billion dollar mark in investment is where we were successful throughout the teens and into the early 20s. So like we feel very comfortable that that's an appropriate level that we can maintain and still present everything that really speaks to our success in the past as creating great franchisings and really delivering excellent high-quality breakout content. So feeling really good about the content.
spk09: Our next question comes from Ryan Gravitt with UBS. Ryan, please go ahead with your question.
spk07: Great, thank you. Maybe just on the licensing business, you mentioned that it would be down this year, just given the deliveries that you had towards the end of 2022. But just curious how you're thinking about approaching licensing in 2023 and beyond, especially with some of your big franchise IP coming back. And I guess do you see more opportunities to leverage your production capabilities like you did for the Apple TV series? Thanks.
spk06: I think that's like a three-parter, so I'll start. Overall, we're definitely sort of walking the line between we don't want to be an arms dealer. We have very strong brands and very strong franchises. So what we're doing, I think, is looking at optimizing the distribution of our franchises and our films everywhere that we can in a way that still allows us to preserve the brand equity that's associated with each of those series. So you'll know it's coming from AMC. You'll know it's coming from any of our brands because we will make the effort, and particularly with franchises that we already own that are visibly AMC content like The Walking Dead, we will continue to distribute those and monetize them as much as possible. But I think the main thing is to preserve the brand equity and to keep doing what we're doing on Linear and also on our streaming services.
spk08: The only thing I'd add to Kristen's point is we're thinking... With our portfolio of content, we think show by show and what is the best way to monetize that and making sure that it is in front of the fandom and the viewers that want to see it. So at the international level, that means going region by region, more so than globally right now, but we're open to those conversations on certain shows. Domestically, it's very much the same approach. We consider each show and map a plan to to how we're going to distribute and perhaps license that show. So while it's down year over year with the silo comps, which Patrick will talk to in a second, I actually feel like we are optimizing and maximizing the yield in our content licensing strategy.
spk03: Yeah. Hey, Ryan, it's Patrick. The only thing I'd add there in terms of, you know, our tactical approach to the market, you know, vis-a-vis being a quote-unquote arms dealer is that We will take a, I will characterize it as highly tactical approach. You know, there's no project that we have to do, right? You know, we program our own networks. That gives us a fantastic sort of perch and web of relationships that we can monetize. Our production of Silo, which premiered a couple days ago, is evidence of that. If there's an economic equation that makes sense and we can earn a reasonable margin at a reasonable risk, we will take those swings. But we don't have to be in the market chasing deals to generate revenue because we produce for ourselves. So again, highly tactical and the economics have to make sense.
spk07: Great. Thank you all.
spk09: This concludes our question and answer period. I would now like to turn it back over to Nick Siebert for closing remarks.
spk01: Thank you everyone for your time today. This concludes the call.
spk09: Thank you for your participation in today's conference. This does conclude our program. You may now disconnect.
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