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Dangers to the cable network industry associated with cord cutting have been exaggerated, AMC Networks CFO Sean Sullivan said Thursday at the Goldman Sachs 24th Annual Communacopia Conference in New York
“It’s obviously been the subject of intense talk over the past 45 days,” Sullivan said. “To a certain degree I think it’s been overblown.”
The issue was brought to the forefront most recently when Disney warned of slower growth at ESPN and its networks business, then Viacom and others said something similar last month.
Sullivan acknowledged that consumers are demanding slimmed-down bundles of channels in order to save money on their cable bill, and AMC Networks is embracing the trend and is confident that popular shows like Fear the Walking Dead, Better Call Saul and Turn ensure that AMC’s five channels are renewed by distributors.
“We view skinny bundles as part of the future,” Sullivan said.
Sullivan wouldn’t confirm or deny that AMC is in merger discussions with Starz, but he noted other investments in Chellomedia, BBC America and others and said its no secret that AMC wants to grow through acquisition when deals make financial sense.
Like some other executives at the same conference this week, Sullivan was bullish on the ad market, despite a flight among consumers to digital offerings.
“We see the state of the advertising market as healthy,” he said.
One analyst challenged Sullivan to defend the practice of licensing content to SVOD competitors like Netflix, Amazon.com and Hulu, since the outcome is that it drives consumers to those services and threatens the health of the traditional cable bundle.
“We’ve done what we’ve done, we feel very comfortable in it, and I think that we do it in support of the current ecosystem,” Sullivan said, noting that AMC has, in fact, been more careful about the timing and the amount of content it licenses to digital competitors.
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