Deep cuts at AMC Networks indicators turbulent time for media market | Information Organization
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Information Company
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“The mechanisms for the monetization of content are in disarray.”
That’s what AMC Networks Chair James Dolan told his staff on Tuesday when he sent the grim information that a “large-scale layoff,” in addition to “significant” functioning cuts, will soon choose location at the enterprise. The cuts, 1st claimed by The Wall Street Journal, will total to 20% of its US workforce, which is about 1,700 workers, AMC explained.
In his memo to personnel, Dolan reported it is a “confusing and unsure time in our marketplace.” He blamed the grave situation at the community — which was after household to television’s hottest displays, such as “Breaking Poor,” “Mad Guys,” and “The Walking Dead” — squarely on cord-cutting.
“At the exact same time we have observed the rise of direct to consumer streaming applications which include our have AMC+. It was our perception that wire reducing losses would be offset by gains in streaming,” Dolan wrote. “This has not been the situation.”
The dire state of affairs at the firm, which also declared the departure of its chief govt who served in the place for less than 3 months, mostly displays the amazing challenges facing the overall market as linear television promptly declines and firms scramble — or most likely, struggle — to establish lifeboats to streaming.
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And the havoc getting wreaked on AMC Networks could foreshadow what is however to come for other folks.
“We’ve by now viewed layoffs and restructuring for a handful of corporations,” Insider Intelligence principal analyst Paul Verna told News on Tuesday. “Any of the [companies] that have not still introduced layoffs almost certainly will.”
“It’s the total ecosystem,” Verna additional.
Big gamers these kinds of as Warner Bros. Discovery (News’s guardian), Disney, and Paramount all appear to be eying expense reducing actions and restructuring their enterprises to focus much more on revenue and less on exorbitant expending to chase subscribers.
Verna mentioned he does not obtain it “unreasonable to expect” that organizations these as NBC Universal, Apple, and Amazon will also announce cuts to their media company in the in close proximity to upcoming. However he didn’t totally agree with Dolan’s assertion that the “mechanisms for monetization of content material are in disarray,” he blamed decrease profitability from streaming, an overcrowded marketplace, and the brutal economic headwinds battering an array of industries.
“They’ve bumped up from the reality that it’s a hard enterprise and there really is not home for everybody in it,” Verna said. “It’s just saturated. And a whole lot of it does get again to the overall economy.”
“And, as a final result, extra dominoes are likely to slide.”