Deep cuts at AMC Networks mark a turbulent time for the media industry

new York
CNN Business

“Mechanisms for monetization of content are in disarray.”

That’s what AMC Networks President James Dolan told his employees Tuesday when he delivered the bitter news that a “large-scale layoff” was imminent, in addition to “significant” operating cuts at the company. AMC said the cuts, first reported by The Wall Street Journal, would amount to 20% of the US workforce, which consists of roughly 1,700 employees.

In a note to employees, Dolan said it was “a confusing and uncertain period in our industry.” Once the host of television’s hottest shows like “Breaking Bad,” “Mad Men,” and “The Walking Dead,” he directly attributed the serious situation on the network to cutting wires.

“At the same time, we’ve seen the rise of direct-to-consumer streaming applications, including our own AMC+. We believed wire cutting losses would be offset by gains in streaming,” Dolan wrote. “That was not the case.”

The dire situation at the company, which also announced the departure of its chief executive who had served less than three months in that position, largely reflects the extraordinary challenges facing the entire industry as linear television declines rapidly and companies scramble – or perhaps, the struggle – to build lifeboats for streaming. .

A version of this article was originally published in the “Trusted Sources” newsletter. Sign up here for a daily recap of the evolving media landscape.

And the havoc that has befallen AMC Networks may be a harbinger of what is yet to come for others.

“We’ve already seen layoffs and restructuring for a handful of companies,” Insider Intelligence principal analyst Paul Verna told CNN on Tuesday. “anyone [companies] Those who haven’t announced the layoffs yet probably will.”

“It’s the whole ecosystem,” Verna added.

Warner Bros. Big players like Discovery (CNN’s parent), Disney, and Paramount all seem to want to take cost-cutting measures and restructure their businesses to focus less on exorbitant spending and more on profits to chase subscribers.

Verna said it was “not unreasonable” to expect companies like NBC Universal, Apple and Amazon to also announce cuts to their media business in the near future. While he didn’t fully agree with Dolan’s assertion that “the mechanisms for monetization of content are in disarray,” he blamed low profitability from flow, an overcrowded market and brutal economic winds that battered a number of industries.

“They were faced with the fact that it’s a tough job and there really isn’t a place for everyone in this business,” Verna said. “Just satiated. And most of it is returning to the economy.

“And as a result, more dominoes will fall.”

Leave a Reply

Your email address will not be published. Required fields are marked *