AMC Networks’ Eduardo Zulueta

Eduardo Zulueta, the president of AMC Networks International, sat down with World Screen’s Anna Carugati on the NATPE stage this morning to discuss global growth, the benefits of technological disruption and the continued importance of linear channel brands.

“Our footprint is very powerful in Europe, the Middle East and Africa and Latin America,” Zulueta said. “Since AMC launched its international channels, we have done quite well. AMC has grown its footprint by 50 percent in the last three years, and if we look at Latin America, we have had four consecutive years of growth—in ratings, in subscribers, in revenues. Last year we gained 15 million subscribers for several channels in our portfolio.”

Zulueta went on to note that “technology is creating changes in consumer behavior—these changes are good, they provide more demand for high-quality entertainment, for more content. We thrive in that kind of environment because we are providers of that sort of content. It’s a good time to be in television. These technological changes bring more diversity, more variety; they empower the consumer. The changes might be disruptive, but disruption is the norm in a dynamic industry. I think the key takeaway is that the total audience for video is growing. That’s the main thing.”

Zulueta acknowledged that there are challenges in the traditional TV advertising market, but noted that “there’s a new wave of advanced data-driven targeted advertising” presenting opportunities for media companies.

“It’s a changing world. Business models are adapting to this new reality. And as they adapt, we very often forget about the past and the previous challenges and how as an industry we overcame them.”

For example, television was seen as a dangerous disruptor to the movie business in the 1950s and ’60s. “Little did they know at the time that the movie industry was going to benefit enormously from television. It was counter-intuitive at the time.”

Likewise, the broadcast market in the 1980s feared audience fragmentation and cable disruption. “What was difficult to anticipate on the eve of the cable disruption was that the revenues of these broadcasters were going to go up. They were adding new revenue streams.

“We look back now and those concerns seem very exaggerated,” Zulueta continued. “I like to reflect on these historical transitions because right now we are in a technological transition, and all these evolutions, these changes in consumer behavior, have actually helped the creative process, they have unleashed new creative potential, they have created a bigger, more stable industry. That’s important.”

On the role of channel brands today, Zulueta responded, “A brand defines who you are. What defines AMC Networks is high-quality storytelling. Our brands reflect that. AMC is a brand that has character. It engages. It has passionate viewers. It’s a brand that is consistent with its promise to deliver high-quality content. That coherence is appreciated by the viewers, so the brand resonates. Of course, we engage with our viewers on social media, we engage with the distribution platforms, we do events and talent tours. We are constantly engaging and monitoring. In this world of increased fragmentation, you need powerful brands that act as lighthouses that cut through the fog.”

In addition to its global brands, AMC Networks has a portfolio of local propositions “that matter very much in the territories where they operate,” among them Film&Arts, Europa Europa, El Gourmet and Más Chic in Latin America; Canal Cocina and Canal Hollywood in Spain; Canal Panda in Portugal; and Spektrum in Central and Eastern Europe.

On AMC’s acquisition of Chellomedia in 2014, Zulueta said he “couldn’t be happier” with the results of that deal. “It has been very good for the old Chellomedia,” which was bought from Liberty Global for $1 billion. “Chellomedia had very relevant, local brands and channels. What it missed was having a top international brand that would act as a driver locally. AMC, which did not have much of an international presence, now has solid footing in many important regions.”

The conversation then moved to content, with Zulueta noting that original programming is “the number one priority.” In addition to the volume coming out of AMC Studios, “we produce quite significantly in the lifestyle genre, around 500 hours every year on all of our lifestyle channels in Latin America and Southern Europe. We also produce some factual. Internationally we have not produced scripted series yet, but I am sure that is something that will happen next. It’s the next development.”

Carugati then asked Zulueta about the resurgence of the Spanish market. “The Spanish television market always made a bet on locally produced series, since the mid-’90s,” Zulueta said. “This has exploded now, very much thanks to globalization and to international SVOD players. All of a sudden, these series are popping up internationally. They were there in the past, but it was difficult to get them distributed. In the last ten years, when Spain started to produce period series, those traveled much better. That raised awareness that Spanish series played well, so there was an interest from buyers, they were ready to take on more series.”

Zulueta then discussed AMC Networks’ direct-to-consumer businesses, which include Sundance Now, Acorn TV and Shudder, all of which are expanding internationally. “That’s part of our diversification effort. We walk on two legs; one is content IP, the other is distribution. We have AMC Studios, which is less than ten years old. We have the channels business in the U.S. We have the channels business internationally. And now we have these OTT streaming services.”

Carugati then asked Zulueta about the future of the linear channel business. “It’s in surprisingly good health,” Zulueta said. “In the U.S., 95 to 99 percent of all demographics still watch linear television. Linear television captured 89 percent of all video impression last year in the U.S. The naysayers focus on some of the negative aspects. But they forget the fact that the total audience for content is growing, significantly.”

However, “audience measurement is lagging [behind] severely. So we are stuck 20 years ago as far as audience measurement is concerned. What is not measured can’t be monetized. A significant part of this new consumption is not measured adequately, which is very frustrating.”

He continued, “I believe the linear channel is here to stay and the linear channel is a necessity. You need the linear channel to have a shared experience. Television is a medium that establishes an emotional connection with its audience. You need those shared events.”

Linear television also remains “the best promotional tool. The linear television channel is in very good health, in spite of all the negative narrative in the last 15 years.”

Carugati concluded the session by asking Zulueta about growth opportunities in Latin America. “There are some macroeconomic worries. We are bullish. We started four years ago with a very strong legacy presence in Argentina. Right now our main market is Mexico and we are growing steadily and significantly in Brazil. Those are our three main markets. We are hopeful about Colombia, we are opening an office there. We are positive about it.”

The session was part of NATPE’s LatAm Summit.