AMC Networks’ Josh Sapan

Josh-SapanSince AMC Networks was spun off as a separate company from Cablevision Systems Corporation in 2011, it has grown its portfolio of channels and significantly bolstered its brands with some of television’s most-watched and most critically acclaimed series.

In the U.S., AMC Networks comprises AMC, SundanceTV, IFC, WE tv and a stake in BBC America, in addition to on-demand and streaming services. Under the leadership of Josh Sapan, who has been president and CEO of AMC Networks since 1995, AMC has been transformed from a channel that offered classic American movies to a destination providing quality original series, including Mad Men, Breaking Bad and The Walking Dead. Sundance Channel rebranded to SundanceTV, and while remaining true to Robert Redford’s original mission of showcasing distinctive storytelling and unique voices, the channel has placed high-end international TV series alongside the best of indie films. IFC has been repositioned as a comedy network, and WE tv offers a range of unscripted shows. A 49.9-percent investment in BBC America brought AMC Networks not only a channel with distinctive programming but also a partnership with the BBC to co-produce series. Recent projects include Top of the Lake for SundanceTV, The Night Manager for AMC and more in the works.

As Sapan and his teams have recognized the importance of owning content, they have set up AMC Studios, which has been producing originals such as Into the Badlands and The Terror. One of the best ways of guaranteeing the exposure of content is to broaden AMC Networks’ reach, and the com­pany has done so by launching AMC and SundanceTV internationally and by acquiring the MGM and Chellomedia channels from Liberty Global.

Well aware of viewers’ changing viewing habits, Sapan has also been making strategic investments in streaming services. First, AMC Networks launched its own services, such as Sundance Now and Shudder, and it also took stakes in third-party sites, including Funny Or Die, RLJ Entertainment (parent company of Acorn TV) and BritBox. For Sapan, the future growth of AMC Networks depends on accessing and owning compelling IP and finding the best ways of getting it in front of passionate fans—whether on traditional linear channels or on nonlinear platforms.

WS: Tell us about the partnership with BBC Worldwide. How has it benefited AMC Networks?
SAPAN: The partnership with the BBC has been just splendid. It’s now been some time that we have been married—if you want to call it that! We have a joint venture that is running very smoothly and very productively for us, and I think for them, too. Through a joint venture with BBC Worldwide, we manage the BBC America channel in the U.S. and then we have co-production relationships with the BBC, which has resulted in The Night Manager and the upcoming McMafia. They have been terrific to work with. We think we have sympathy with them editorially. We are on the same wavelength from a business point of view, and it’s been very fruitful.

WS: AMC Networks has made a number of investments recently. Why were they important and are you looking to do more?
SAPAN: As a company, we have made opportunistic acquisitions over the past five years since we spun off as a separately traded company from Cablevision Systems Corporation. The first significant acquisitions were the channels overseas; we bought the MGM and chellomedia channels from Liberty Global. We now have AMC Networks International, and we are in Latin America, Europe, Africa and other various parts of the globe. We made the arrangement with BBC Worldwide where we purchased a 49.9-percent stake in BBC America.

More recently we made investments in Funny or Die [the digital comedy site founded by Will Ferrell and Adam McKay] and RLJ Entertainment. There are two things in those arrangements that motivate us and are related. One is that there is intellectual property and we think that owning IP that is highly desirable and smart for who we are today and who we will be tomorrow. And the second is that in the case of RLJ Entertainment, they operate two streaming services. One is called Acorn TV and offers British drama and the other is called Urban Movie Channel. Those are two streaming services that we think are very attractive.

Our BritBox association is an extension of our relationship with the BBC and includes the U.K. commercial broadcaster ITV. Again there is a pattern. First, those are two world-class companies, arguably best in class, that are great studios and creators of content, great owners of IP. And second, that deal is set up to specifically be a streaming service on the internet. If I were to say it simply and succinctly, we want to own and control more IP, and we’d like to be more significantly in the streaming business.

WS: Speaking of streaming services, how did Sundance Now come about?
SAPAN: It is a little bit back to the future in that the earliest promise of cable television, when it came on the landscape decades ago, was that there could be very specific audiences targeted in an uncompromising manner. They could be served and super-served with exactly what the audience wanted that they otherwise couldn’t find, all collected and/or made for a particular interest. Over time, as cable television became more successful, particularly ad-supported cable television, which we are in, to some degree that targeting has slightly expanded, maybe significantly expanded. That’s good, and we are very proud of what we do on the cable TV dial. We also think it’s very interesting, appealing and a great opportunity to be in a highly specific service. So Sundance Now is for a very particular taste. It’s a very niche streaming service. Likewise, Shudder is our streaming service for horror fans and aficionados, and we can program it in an absolutely uncompromising way.

WS: I like having something that is curated because I don’t always want to look in many places for what I want to watch.
SAPAN: That’s a relevant point because much of the world likes something that is curated. They might want to explore, but they also want to have some editorial selection done for them with a voice or a hand that they trust.

WS: In this crowded and growing media landscape, what do linear channels have to do to remain relevant?
SAPAN: They, too, have to be in service of a demographic and they have to be highly desirable. And they have to have big scale. They have to have wide, in our case, distribution in the U.S. and globally. There is a big place for a scheduled service, we think. People like it. It doesn’t mean it can’t have an on-demand component on the internet or cable VOD, but it is appealing to watch The Walking Dead on Sunday night at the same time as everyone watches it. It’s appealing to watch Talking Dead afterward. It’s appealing to have a curated selection of programs.

WS: AMC Networks has recognizable channel brands and hit shows. Is it important to be on Sling TV, on PlayStation Vue and DIRECTV Now? What’s your strategy in how you decide where to place your content?
SAPAN: To date, we have participated in each of the MVPDs [multichannel video programming distributors]. We’ve also participated with Sling, with Playstation Vue and with DIRECTV Now. In each of those instances, we made a determination that it was desirable for us and we were able to reach an agreement with them regarding terms, conditions and rates. In general, we think it’s good to be where consumers are. It doesn’t mean that every single opportunity that comes up will be one that is imperative for us and is the first choice, but so far we have made this determination.

WS: In this on-demand world, do you have to rethink how you brand your channels or what brand loyalty is?
SAPAN: Yes, very much so and I think it’s an unanswered question and we could probably go on some length about it. The word disintermediation—which feels like it has one too many syllables!—is perhaps overused, but it is interesting because it does generally allow all of us to get more quickly to what we want. Which means that shows can become more heroic versus channel brands. At the same time, if one were able to get every article ever published anywhere on the internet, for me, it wouldn’t cut down my desire to subscribe to whatever I subscribe to, whether it’s the fancy ones like The New Yorker or The Economist or the less smart ones. The fact is we do want curation, and we want packaging. It remains to be seen, in three years, five years and ten years, how much individual show titles matter and how much channel names matter. If I had to guess I would say both matter.

WS: And as a content producer and owner, is it also necessary to control the output of your content?
SAPAN: We’ve always found it desirable to be a producer and increasingly to be a producer—our AMC Studios now has a dozen shows in production—as well as a distributor. So we think it’s smart certainly for us, maybe not for everyone, to be on both sides of those two activities.

WS: Given the proposed Time Warner and AT&T merger, and the recently completed Lionsgate and Starz merger, does there continue to be the need for scale in the media world?
SAPAN: There has been consolidation in the media industry over the past 10 years, 20 years, particularly so on the distribution side and particularly in the U.S. where the so-called cable companies have gotten larger and larger. I think it’s less proven and less certain that scale matters in itself because each of those arrangements and deals have individual financial elements and/or benefits associated with them, so I don’t think scale is an imperative. I think particularly on the content side there is a less certain conclusion about scale. Just to illustrate it I would point out that Time Warner itself, which is now being proposed to be put together with what was a so-called telephone distributor, actually separated its very own elements right before selling itself. Not very long ago, AOL was part of Time Warner and Time Warner Cable was a part of Time Warner and Time Inc. was a part of Time Warner, and they no longer are. So they made a decision to “spin off.” And now they are choosing to consolidate; so I don’t think there is one conclusion you can reach if you take a span of activity that goes longer than the last 12 months.

WS: Do you see AMC Networks being an acquisition target for anybody?
SAPAN: There is much conversation in the atmosphere, but we focus on running our business every day, performing well, making great content and doing acquisitions and investments that have been highly selective that we think are uniquely beneficial to us.

WS: What opportunities for growth are there for AMC’s international channels?
SAPAN: There are tremendous opportunities across the world, and I would begin by saying that we think it’s not imperative but highly desirable to have a channel platform that extends beyond the U.S. because the world is well bigger than the United States. So we are very pleased now to have the realization of something that was in our mind’s eye for some time, which is to have a footprint that extended well beyond the borders of one sovereign nation. That has been achieved, and we now have a channel that is called AMC that’s well known, and we converted other channels, including MGM. The opportunity is that there is much more growth potential in certain geographies that are less well developed, such as Africa and Latin America and Southeast Asia. Then there will be opportunities to expand from that position, and that becomes incumbent to the streaming world—and this is a bit of an argument for scale—that when we make a TV show, we can do it with greater certainty that it has a home around the globe on one or multiple platforms. We have been happily able to sell our shows into very welcome markets where we don’t have channels, but it is nonetheless nice to have that certainty of footprint distribution when you are producing.

WS: SVOD services like Netflix, to some they are an enemy and to others a friend. How does AMC Networks view SVOD services? And does it still wait a year to make episodes of its series available to them?
SAPAN: Since we did our first deal with an SVOD service, which is now coming on five years, our determination was that it was complementary to our business, but we had to be careful about something that was conventional in the content management business, which was the proper windowing of series. We had to be very careful about when the episodes of our series became available on SVOD services. So we came up with a point of view that we largely adhere to and we are following it today [waiting a year to make episodes available]. I would say that we consider those SVOD entities to be friends. Which is not to say that when you love your family members, you love them every hour of the day. You love them, and you don’t love them any less but sometimes in the morning you are cranky—that comes with having a family!

WS: What impact might VR have on storytelling and how far off is that?
SAPAN: There are others who are better authorities on the pace of implementation, but as a consumer/viewer, VR seems to have attributes that have the potential of bringing a new—literally—dimension to the physical experience, the physiological experience and potentially the narrative of television storytelling. The reason I find it so interesting and exciting is that each time there is a technological change, generally, it’s first the technology that people get enthusiastic about—features like, It does this, or, The picture is prettier, or, I can watch it when I want. And then what happens is that content creators begin to adapt what they are doing, with or without premeditation, to the new format and a new form is born. Then it gets to be fun because something wholly unanticipated occurs in storytelling as the [medium improves]: the stage becomes bigger or is in the round, or movies are made, or technology allows you to watch when you want so that people can pay more attention. All that stuff has truly given life to new forms of storytelling.

WS: Or premium channels have no commercial breaks so an episode’s story can be told differently.
SAPAN: Exactly right. So VR seems to hold all that potential. I don’t know what the manifestation will be. Generally, it’s not as it first appears. It first appears with the “easy tricks” and then comes the more interesting part.