Since the beginning of cinema, filmmaking has always been a collaborative art form that made money through people paying to have a shared experience together. Nothing could genuinely compete with the theatrical experience. That is, until streaming services emerged supreme.
The pandemic brought a hard truth to Hollywood that people enjoy staying in and watching films from the comfort of their couches. Many studios and networks tried to adapt, looking for new ways to stay relevant in the age of streaming while making a notable profit. Unfortunately, the streaming bubble looks like it's about to pop, and some networks can’t stay afloat, meaning only one thing—layoffs.
AMC Networks is about to become the latest company to undergo “large-scale layoffs,” according to IndieWire. According to a memo sent from AMC's parent company MSG Entertainment CEO James Dolan, the decision to lay off employees is due to subscriber losses from the cancellation of cable bundles in favor of streaming.
'Lodger 49'Credit: AMC Networks
Dolan said that AMC believed that the company would see an increase in subscribers for their streaming platforms like AMC+ and Shudder, offsetting the losses from cable cutting.
Unfortunately, that estimate was way off, enough so that the company has to cut costs elsewhere.
In the memo, Dolan writes:
“It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray. We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks.”
The news of massive layoffs comes on the same day that AMC’s CEO Christina Spade stepped down after less than three months on the job. Spade will receive severance following her exit from the company. According to her employment agreement, this means she was terminated “without cause” or stepped down for “good reason.”
AMC told IndieWire that the company’s board “is currently finalizing who it will name as a replacement, with an announcement to follow.” I feel bad for whoever gets named CEO because their first order of business is to reduce the majority of the staff.
AMC is one of several entertainment companies that have been cost-cutting and laying off staff. Warner Bros. Discovery, Criterion, and Nextar have had strategic “reorganization” layoffs, while other companies, like Disney, have responded to their budgetary problems by putting a hiring freeze on the company.
This isn't the first time entertainment companies have cleaned house to save money. In 2020, we talked about how the late pivot to streaming services would not be a smooth transition for many companies. The market was oversaturated, and at-home viewers become overwhelmed with the endless about of options and subscription plans.
We should clarify that AMC Networks is not affiliated with the movie theater chain AMC Entertainment, although movie theaters have been struggling just as much as entertainment companies to stay relevant in the current industry.
'Mad Men'Credit: Lionsgate Television
AMC, BBC America (a joint venture with BBC Studios), IFC, IFC Films, RLJE Films, SundanceTV, WEtv, and AMC Studios all fall under the AMC Networks umbrella. The company is also the home of streaming services like AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK, and the anime-focused HIDIVE.
For now, entertainment companies are struggling to make a profit, and the employees are feeling the effects. It is hard to see what the future of these companies will have to look like for them to be prosperous again. One thing is clear. Streaming services are no longer as profitable as they once seemed.
You can read Dolan's full memo, obtained by IndieWire, to AMC Networks here:
AMC Networks Community:
As I am sure you are aware our industry has been under pressure from growing subscriber losses. This is primarily due to “cord cutting.” At the same time we have seen the rise of direct to consumer streaming apps including our own AMC+. It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray.It is for that reason that myself and the Board of Directors of AMC Networks have concluded that we as a company need to conserve our resources at this time. We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks. We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood. We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community. However, it is imperative that we begin immediately with this new course of action.
The Dolan Family and the Board of AMC Networks have great pride in the company and products that you have created. This is a confusing and uncertain time in our industry. We are confident that AMC Networks will come through this even stronger. Your executive leadership will follow up with details shortly. We wish only the best for everyone in the AMC Networks community.
Sincerely,
James Dolan
Let us know what you think of the issue in the comments!
Source: IndieWire
