AMC Networks Inc
NASDAQ:AMCX
Earnings Call Analysis
Q4-2023 Analysis
AMC Networks Inc
AMC Networks highlights a year of transformation under new leadership, marked by strategic programming, partnerships, and profitability. Despite a challenging environment, they cultivated a strong streaming revenue growth and expanded their Adjusted Operating Income (AOI) margin to 25%, coupled with an increased free cash flow performance.
The company believes in the dual importance of content and cash, signifying their focus on creating valuable content while ensuring a robust cash flow, hinting at a future pathway that equally considers creative strength and financial prudence.
AMC Networks sees the advantages in being nimble and independent, positioning itself to leverage structural benefits such as flexible partnerships unique to non-vertically integrated programmers, which could pave the way for creative distribution and commercial relationships.
The company has broadened its ad-supported distribution ecosystem, which now spans linear networks, targeted streaming services, and partner platforms. This diversification allows for adaptive content windowing, extending viewership, and enhanced partnerships, underlined by developments with platforms like Xumo from Comcast and Charter.
Significant partnership agreements, like with Philo, aim to bolster commercial revenue and viewer engagement through the ad-supported tier of AMC+, indicating a strong foundation for growth as more partners join the framework throughout the coming year.
AMC Networks finished the year with notable cable drama rankings and success with AMC+, driving viewership both on traditional cable and emerging streaming options. Partnerships such as with Max have shown to yield fruitful audience gains, signaling confidence in future content bundling activities.
The company initiated breakthroughs in programmatic ad buying on linear networks, which led to higher conversion rates and audience segmentation capabilities, marking a significant differentiator to be leveraged in advertising partnerships and future sales strategies.
With a technology overhaul underway and the onboarding of a new Head of Global Media Operations and Technology, AMC Networks is set to improve customer service and maximize efficiencies across its streaming services into 2024.
Q4 of the previous year brought historic high viewership across their streaming portfolio, with expansions into critically acclaimed series and fan-favorite franchises like The Walking Dead, projecting sustained audience interest and content value looking forward.
Achieving full-year guidance, the company demonstrated financial resilience with a focus on generating free cash flow and investments in programming. Heading into 2024, they have a strong outlook supported by decisions to optimize expenses and a commitment to fiscal prudence.
AMC Networks projects a conservative revenue decline of 6% in 2024, down to approximately $2.4 billion, after adjusting for the divestiture of 25/7 Media and not considering atypical gains from previous content licensing deals. Prospects appear promising for streaming revenue with expectations of high single-digit to low double-digit growth, mitigated declines in advertising revenue, and a projected 10% drop in affiliate revenue due to the evolving video ecosystem. Content licensing remains crucial, with expected revenues around $225 million, forming a stable baseline for the company's content production capabilities.
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Good day, and thank you for standing by. Welcome to the AMC Networks' Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Nick Siebert, Vice President of Corporate Development and Investor Relations. Please go ahead.
Thank you. Good morning, and welcome to the AMC Networks' Fourth Quarter and Full Year 2023 Earnings Conference Call. Joining us this morning are Kristin Dolan, Chief Executive Officer; Patrick O'Connell, Chief Financial Officer; Kim Kelleher, Chief Commercial Officer; and Dan McDermott, President of Entertainment and AMC Studios. Today's press release is available on our website at amcnetworks.com. We will begin with prepared remarks, and then we'll open the call for questions. Today's call may include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ. Please refer to AMC Networks SEC filings for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward-looking statements made on this call. Today, we will discuss certain non-GAAP financial measures. The required definitions and reconciliations can be found in today's press release. With that, I'd like to turn the call over to Kristin.
Thanks, Nick, and good morning, everyone. It's been nearly a year since I joined AMC Networks as CEO, and I'm proud of the progress we've made in a fast-changing and challenging environment, both internally and in the way we engage with viewers and our commercial and creative partners. In the fourth quarter and across 2023, we continue to see success in the areas that will drive this company forward, programming, partnerships and profitability. I'm encouraged that we were able to grow streaming revenue, strengthen our subscriber base and expand our consolidated AOI margin to 25%, while meaningfully growing our free cash flow. In a moment, Patrick will provide a detailed look at our financial results for the most recent quarter and the full year, including our enthusiasm for the free cash flow potential of this business going forward. There has long been a thing in this industry that content is king. We believe that if content is king, cash is queen, and we are on a path that prioritizes both. In discussions around media and content companies these days, it's hard to miss the fascination with scale. From our perspective, we see strength in being nimble and independent and value the flexibility this provides us in the marketplace. We have opportunities that are, frankly, not possible for non-vertically integrated programmers who are tied to broadcast networks or large distribution businesses. We truly can dance with anyone and are enthusiastic about using the structural advantage that comes with this independence to better serve viewers and our commercial partners. With the introduction late last year of an ad-supported version of AMCs, we now have a fully ad-supported distribution ecosystem that includes our 5 linear networks, several targeted streaming services and programming carriage of approximately 100 channel feeds on partner fast and CTV platforms. Our presence in all of these places is important for several reasons. Number one, we're able to reach viewers and make our content available wherever and however they might choose to watch. Secondly, and very much in line with that first objective, we use viewership insights and library management to window our shows and films across these brands and unique audiences to expand viewership and engagement in a cost-effective and responsible way. And third, we seamlessly work with our commercial partners across all of these platforms, which delivers value and functional benefits that wouldn't be possible if our presence was limited either to just linear or just streaming. We continue to be very bullish on new offerings like Xumo from Comcast and Charter that converge linear and streaming consumption at scale with dedicated customer service and technical support for viewers.The companies behind this new offering are some of our most important and long-standing commercial partners. We're pleased to have been with them on Xumo from the beginning and see great opportunity as they continue to roll out this new offering. In other affiliate news, we recently completed an agreement with Philo that will launch early this year. It will make the ad-supported version of AMCs part of Philo based video offering. Just another example of how the ad-supported tier gives customers additional flexibility but also boosts our commercial revenue partnerships and potential for bundling while getting our shows and films in front of more viewers. It's early days, but we are very pleased with the response to the ad-supported version of AMC+, and we have an established runway for growth as more partners add the option this year. We still put high-quality original shows on AMC every Sunday night of the year, an increasingly rare approach that drives value for our traditional affiliate partners. But importantly, this is not the only place we put these shows or the only way we work with our partners. Yes, we ended the year with 5 of the top 20 dramas on cable and 3 of the top 6 new cable dramas. But just as importantly, the cable companies that are seeing the benefits of that linear performance also carry AMC+ on their own systems as an integrated offering to their customers. We drive viewership in both places. We were happy with the results of our content partnership with Max late last year. Our shows performed well on their platform, and we saw associated viewership increases on AMC+ as well. We remain in discussions with a wide variety of potential partners and believe we will see additional bundling activity in the future. Across the industry, we really do need to make things easier and more cost-effective for our customers. The current environment is confusing, expensive and essentially forces consumers to recreate the cable bundle on their own at twice the price. We saw an example of new thinking on bundling and partnerships just this week with the announcement from major industry players on a new sports bundle. I believe this industry will continue to find new approaches that will better serve consumers, distributors and content companies. Turning to advertising, we've been very focused on driving new technology and capabilities that both benefit us and change how the industry does business. In the fourth quarter, we became the first programmer to enable programmatic ad buying on linear networks. This followed our first-of-its-kind deployment of fully addressable spots in our national linear programming fees. These advances make our linear and digital inventory much more valuable and effective. Going to market with a programmatic first approach and a fully converged linear and digital offering, lets us enter into broader and more meaningful advertising partnerships. Some of the early advertisers using our programmatic linear capabilities are seeing conversion rates that are 4 or 5x that of linear traditional campaigns with significant boosts in incremental unduplicated reach from their conventional ad buys. For the first time on linear television, advertisers can buy audience segments instead of broad demos tied to time slots with custom attribution results delivered post campaign. This is real differentiation we can bring to this year's upfront and beyond. Another area of focus for us is a technological overhaul and consolidation of our back-end systems and shift to one platform supporting all of our streaming services. This development work will carry forward in 2024 and will improve our service to customers and maximize efficiencies. Leading this effort is Stephanie Mitchko, who recently joined the company as our Head of Global Media Operations and Technology. Stephanie and I worked together at Cablevision, where she did award-winning work around content discovery and help develop and deploy the industry's first cloud-based DVR. She then went on to become CTO and COO of Cadent where she was immersed in the world of ad tech and most recently served as CTO of Charter. We are thrilled she is here with us and leading this important evolution. As always at AMC Networks, everything we do ties back to the shows and films we're able to make and put in front of viewers. I want to close my remarks today with some results from 2023 that demonstrate our strong audience momentum and also provide a look ahead at 2024. The fourth quarter of last year was our most-watched quarter ever across our streaming portfolio, which, as you know, is designed to super-serve fans of specific genres and content categories. AMC+ and HIDIVE achieved their #1 quarters ever in terms of viewership and Shudder and Acorn TV also showed significant strength to close the year. Programming achievements included first season of -- the Walking Dead Darryl Dixon, which is now the most watched season in the history of AMC+ and that includes the final season of the Walking Dead itself. VHS 85 is Shudder's most watch film ever. The Eminence in Shadow Season 2 is HIDIVE's most watch season ever, and Toya Reginae is -- all Black's #1 new series of all-time in both viewership and customer acquisition. We had a lot of success with our shows and films last year and the year ahead looks just as exciting. Earlier this week, we brought a slate of new shows to the [ twice ] annual Meeting of the Television Critics Association or TCA. Even in the wake of 2 strikes that shut down production for 6 months, I don't believe we've ever presented a more compelling and eclectic collection of shows than we did this week. These shows included Monster Speed, a critically acclaimed series starring Clive Owen as the mortal Detective Sam Spade, Parish, which is premiering at the end of March with Breaking Bad and Better Call Saul Giancarlo Esposito in a leading role and the second season of the popular and Rice's interview with the Vampire which returns to AMC and AMC+ on May 12. The latest addition to our expanding universe around the Walking Dead, -- the Walking Dead, the ones who live, premieres on February 25 and is focused on fan favorite characters, Rick and Michonne.As we enter the final weeks of our promotional campaign, we're seeing enormous fan interest in anticipation in this continuing story. The final trailer for the series just dropped and generated 16 million plays in its first 24 hours and nearly 33 million plays in a single week. We're also bringing Rick and Michonne into Activision's blockbuster video game franchise, Call of Duty proving the enduring allure of these beloved characters across the media landscape. This is a meaningful indication of the continued fan interest for this universe, which is important to us given that we have second seasons of the 2 other character-driven spin-offs, density and Daryll Dixon on the way. In a world in which a premier is when a viewer first decides to watch something as opposed to when a network first decides to show it, we see a very long tail and incredible value in this beloved and expanding franchise. As I look back on 2023, I'm proud of the progress our internal teams have made in transforming the company to adapt and thrive as this competitive and fast-changing environment continues to take shape. We enter 2024 very much focused on programming, partnerships and profitability as our 3 principal drivers of the company and its continued success. And I'm energized by this work, our people and the road ahead. And now I'll turn the call over to Patrick.
Thank you, Kristen. I'll start by providing a high-level review of our financial results, and then I'll discuss our outlook for the year, and then we'll open the call for Q&A. For 2023, we are pleased to report that we achieved our full year guidance, including consolidated revenue of $2.7 billion, consolidated adjusted operating income of $670 million and most importantly, free cash flow of $169 million. Excluding the impact of the $113 million onetime cash restructuring payments as well as the $50 million tailwind related to the unwind of our Hulu licensing agreement, our normalized free cash flow would have been $231 million, a base which we believe we can grow in 2024. Looking back over the year, we are very pleased with the progress we've made in quickly reorienting the business around free cash flow generation while balancing critical investments in programming. We'll have more to say on this when we get to our guidance for 2024. Before I jump into our financial results, I would like to quickly address one housekeeping item. In December, we sold our interest in 25/7 Media, which in 2023, generated $91 million in revenue and $4 million in AOI within our International and Other segment. Beginning in the first quarter of this year, this segment will be solely comprised of AMC Networks International, including visibility into this important business. In addition, going forward, our consolidated content licensing revenues will clearly reflect the traditional core licensing revenues generated by AMC Studios as well as our film distribution businesses without the lower-margin production revenue we divested. Prior to the completion of the sale, we recorded a noncash impairment charge of $20 million. Moving to our results. For the fourth quarter, consolidated revenue was $679 million. Adjusted operating income was $100 million, and we generated $66 million of free cash flow. I will now briefly touch on our segment financials. Domestic operations revenues decreased 13% to $2.3 billion for the full year and decreased 32% to $582 million for the fourth quarter. The decrease in revenues for the full year was attributable to lower advertising, content licensing and affiliate revenues, partly offset by streaming revenue growth. Next, I'll break down the individual components of revenue. Full year streaming revenue increased 13% to $566 million. For the quarter, streaming revenue increased 4%. We continue to remain disciplined in our marketing spend, and we are pleased with the results of our efforts to acquire and retain higher lifetime value subscribers. Advertising revenues declined 20% for the full year and 23% in the fourth quarter and reflect difficult year-over-year comparisons with Q4 2022 when we added the incredible finale of -- the Walking Dead as well as lower linear ratings. Our advertising revenues also reflect actions we took to reduce volumes of original programming, the net result of which drives higher levels of profitability. Digital growth remains robust and continues to partially offset these headwinds. That said, like our peers, we continue to experience a challenging advertising environment, particularly for scatter and direct response. Content licensing revenue was $343 million for the full year and $96 million for the fourth quarter versus $300 million in the fourth quarter last year when we recognized $126 million of revenue related to Philo, the claimed AMC Studio series we produced for Apple TV as well as significant revenues associated with the delivery of certain the Walking Dead universe titles. Affiliate revenue performance in the quarter was driven by continued declines in the basic subscriber universe and the 4% impact from the non-renewal of Fubo. At the end of the fourth quarter, we fully lapped this impact, therefore, Fubo will not be a headwind to our year-over-year comparisons going forward. Domestic operations adjusted operating income was $713 million for the full year and $124 million for the quarter. Continued expense management yielded margin improvements for both the full year and the fourth quarter with margins of 31% and 21%, respectively. The year-over-year decrease in AOI was largely attributable to lower revenues, which were partly offset by lower programming and marketing expenses, the result of continued cost discipline across the business. Looking at our International and Other segment. For the full year, revenue decreased 9% to $404 million. Excluding 25/7 Media, revenues declined 2%. Adjusted operating income was $61 million for the full year. Moving to the balance sheet. We ended the year with net debt of approximately $1.8 billion and a consolidated net leverage ratio of 2.7x. We have substantial financial flexibility with approximately $1 billion of available liquidity, including $571 million of cash on the balance sheet and our undrawn $400 million revolving credit facility. In the fourth quarter, we redeemed all of our 2024 senior notes outstanding and also repurchased $25 million principal amount of our 2025 senior notes in the open market. We continue to remain focused on maintaining the health and flexibility of our balance sheet while reducing gross debt over time. Regarding capital allocation, our philosophy remains unchanged. First, we look to support the business by creating and acquiring compelling programming that resonates with our audiences, while maintaining healthy levels of profitability and cash flow generation. Second, we look to improve our balance sheet by reducing gross debt and proactively addressing upcoming maturities. Third, strategic M&A and returning capital to shareholders remain further down our current priority list. Our 2023 results, including a healthy 34% normalized free cash flow conversion ratio and a reduction of gross debt of approximately $460 million are reflections of these priorities, which we're carrying into 2024. Moving to our outlook for 2024, we are pleased to say that we expect to grow our free cash flow year-over-year over the normalized $231 million we generated in 2023. And over the next 2 years, we expect to generate cumulative free cash flow of approximately $0.5 billion. In 2023, we reaped the benefits of the difficult decisions we undertook to right size our expense base at the end of '22. This gives us additional confidence in our ability to manage the business in a fiscally prudent manner going forward. Moving on to revenue, excluding $91 million of 2023 revenue from 25/7 Media and $56 million of revenue related to Philo deliveries in 2023, we expect 2024 consolidated revenue to decline approximately 6% as compared to the prior year, implying total revenue of approximately $2.4 billion. Now I'll unpack the details that underpin our revenue outlook. Prudent streaming growth will continue to be a focus in 2024, and we expect year-over-year streaming revenue growth in the high single-digit to low double-digit range, driven by broader distribution of our offerings, selected price increases as well as disciplined acquisition marketing efforts. With respect to advertising revenue, while the linear environment continues to be challenging, the programming schedule and volume headwinds evident in 2023 will subside. We expect year-over-year domestic advertising revenue declines in the high single-digit area for 2024.With respect to affiliate revenue, the traditional video ecosystem continues to evolve rapidly, and we're leaning into efforts by traditional distributors, customer-centric solutions such as Charter and Comcast, Xumo. With that said, our near-term expectation regarding linear subscriber trends for this year remains unchanged. And we expect full year domestic affiliate revenue to decline approximately 10% compared with 2023. Content licensing remains a priority for us, and we continue to be innovative, aggressive and disciplined regarding this crucial revenue stream. In 2024, we don't expect shows like -- the Walking Dead and Fear the Walking Dead to contribute as much as they have in the past to our content licensing revenues, nor do we expect material production revenue from projects like Philo for Apple TV. Taking account of these year-over-year dynamics, we expect domestic licensing revenue to be in the $225 million area for 2024. And while content licensing revenues are notoriously lumpy and often impacted by shifting delivery schedules, this level of revenue reflects our current level of production and as such, a good baseline going forward. Owning the content we produce comes with significant optionality, and we look forward to the opportunity around the return of international rights to shows like -- the Walking Dead in 2025. Moving on to our international segment, as we have divested 25/7 Media business, this segment will consist solely of our AMC Networks International business. For AMC Networks International, excluding 25/7 Media, we anticipate declines in distribution revenue to be partly offset by advertising revenue growth, yielding approximately $300 million in revenue from our international segment for 2024. While our guiding metric remains free cash flow, adjusted operating income is still a very important measure of profitability, and we continue to focus on maintaining healthy AOI margins. Despite the revenue headwinds, in 2023, we actually increased our AOI margin to 25%, the first year-over-year increase in margins since 2017. For 2024, despite the expected decline in revenue, our continued cost measures and prudent investments lead us to expect only a slight decline in margins to 2022 levels of 23% to 24%, implying consolidated adjusted operating income of $550 million to $575 million. Driving our 2024 AOI expectations are the revenue headwinds in our linear businesses, offset by continued growth in streaming and digital advertising as well as disciplined expense management. We also expect programming amortization to be similar to 2023 levels despite a reduction of cash programming spend from $1.1 billion in 2023 to approximately $1 billion in 2024. We will continue to be extremely disciplined on expenses, including the calibration of marketing spend to drive prudent streaming growth. Before we open it up for Q&A, I would like to reiterate what I said in the past regarding our overarching financial approach in managing through this rapidly evolving media environment. AMC Networks is employing a back-to-basics approach that fences broad distribution of our content across available platforms and prioritizes near-term monetization while at the same time, taking advantage of our unique position as a nimble and innovative premium programmer. Along the way, we'll preserve capital to ensure we maintain a healthy balance sheet, remain extremely disciplined on expenses and balance appropriate levels of programming investment against the available monetization opportunities. We remain pleased with the progress we've made on these fronts and look forward to delivering the strongest content slate AMC Networks has had in years in 2024. Operator, please open the line for questions.
[Operator Instructions] Our first question comes from the line of David Joyce with Seaport Research Partners.
I appreciate your commentary for the outlook this year, but also interested in digging more into your advertising offering. Could you please help to differentiate how your programmatic approach compares and contrasts with other leader networks efforts that have been moving digital? And also, if you could layer on to beginning of the fourth quarter, which was one that saw an acceleration of advertisers applying some of their budgets to the streamers' ad tiers. How are you also going to market to -- with that backdrop?
David, it's Kim Kelleher. Thanks for your question. I think as an industry, we continue to be an absolute leader and national linear addressable advertising, excuse me, we're taking this difficult time and really leaning into innovation and investments in our technologies to serve better solutions to our partners. We believe this upfront is going to be heavily leaning towards data targeted audience solutions and buys, and we couldn't be more well positioned to take full advantage of that. On your specific question regarding programmatic, we successfully developed and enabled the first Vitable programmatic buying capabilities within our linear inventory. This is the first time in the industry, a company has been able to successfully do this. So as Kristen mentioned, we had a number of partners debut this product with us in the fourth quarter, and the results were beyond promising. In particular, L'Oreal has quoted that there -- they saw increases of over 10% from expected performance. So also last year, we launched Audience+ at our upfront event. Audience+ combines all of the development we've done for the last 3 years to ready for this moment. That brings our partners the most advanced targeting capabilities seamlessly. It really simplifies the transaction and offers a true cross-platform targeting with all of our inventories, live linear, VOD and CTV altogether. So, we see a huge opportunity to automate the sale of addressable going forward and think this will be an area of large growth and yield. On Q4 specifically, it was a difficult quarter, but I think you're seeing the same headwinds. Most of our competitors are reporting. Yes, it's -- we're seeing revenue move into streaming categories, and we launched AMC+ ad supported right at the right time. So, we launched in late September, and that product is up and running on one large partner platform, and we are adding platforms every single month. So, we anticipate to be able to pace with those trends.
I would just add, David, it's Kristen. On your question about programmatic on linear. Like essentially, what it means is that the traditional digital advertisers, people that have solely bought digital or dabble in traditional television, they can now purchase our national linear inventory programmatically. So, they're basically using the buying platforms that they always use on digital to buy linear television, which for us and I think for most people in the business is a huge opportunity to finally swing the pendulum back from digital first to shared purchase of traditional television as well as digital to support the advertisers' efforts.
Our next question comes from the line of David Karnovsky with JPMorgan. Your line is now open.
Patrick, thanks for your view on free cash flow. I wanted to see if you could walk through some of the puts and takes of the guide for the out year and any assumptions that are built into that around programming spend or anything else we should be aware of?
Yes, sure. Great. Thanks for the question, David. Listen, we took some tough medicine at the end of '22 to right size our expense base. And obviously, we're in the business of forward planning our production slate that being, by far, our largest expense. And so, the pain that we took in '22 paid dividends in '23, we were able to essentially kind of double reported cash flow from about $140 million to $280 million this year. And as we look forward to planning in '24 and '25 with the slates we have for the 25 and 26 years, this gives us really good line of sight into our ability to generate this free cash flow. We're going to be nimble and creative in terms of how those slates come together. You will have noticed late last year, we announced a deal to buy some IP from Disney in the context of a show called Nautilus, which is really neat. That being said, we continue to like our position as having ownership economics over our slate. So, you'll know that for the most part, we own most of the shows on AMC. And so that means we've got really strong optionality and success. And so, we like that model. We can be flexible. But given the medicine we've taken to drive free cash flow this year, we've got good line of sight in terms of our programming plan going forward and the rest of the expense base as well. So, we feel really good about growing free cash flow year-over-year in '24, and that's why we feel confident in giving you the 2-year guide and generating approximately $0.5 billion over the next 2 years.
Our next question comes from the line of Robert Fishman with MoffettNathanson.
It's [indiscernible] for Robert. I want to know if you had any other color to share on the experiments with putting turn titles on Max and if we expect some news in the future? And also, then more generally, how you guys are thinking about growing licensing revenues, balancing building a roster exclusive for AMC+ versus renting out to third parties?
It's Kristin. I'm going to let Dan take the second question, and then we'll go back to the Max partnership. So, your second question around content was around sharing content between AMC+ and AMC -- is that the question number...
AMC+ versus licensing out?
Yes. I'll take -- I'll start with the second question, Robert. So, with respect to licensing, look, we're focused on -- this is Dan, by the way. We're focused on generating the best possible return from our content investments. And we appreciate the strategic advantages and optionality that our studio model has for us. Obviously, our owned IP and beloved franchises are very desirable and sought after. So, we seek to monetize them as efficiently as possible. We have 5 linear platforms, 7 streaming platforms. So, we window through our ecosystem in the interest of maximum revenue and profit generation. As far as whether or not we'll produce for third parties like we did with Philo for Apple, -- we look at ourselves as being very opportunistic and highly selective and tactical when we take on those opportunities. We'll do it when the risk-reward makes sense. And we typically develop a lot of content that maybe not all of it is suitable for AMC Networks. So, we -- and we do have deep and long relationships with all other platforms. So, we will be out in the market and will sell to third parties when appropriate. It's not our primary business, though. So, we're not in a situation where we have to chase other platforms and are dependent upon that.
And just to follow up on the Max partnership, I think it was a learning experience for both. We were thrilled with the increases in viewership that our content received both on Max, but then also the associated lift in the more current seasons for the series that we shared with Max. -- when we have more current seasons on AMC+. So, we shared a lot of information in a privacy-compliant way we between the 2 companies, and I think they were pleased with hopefully some positive retention and engagement on the Max side and we were certainly pleased with the learnings and the increased viewership that we got on AMC+ for those series.
Yes, I'll just add one thing, which is that what that experiment showed us was that when we get on to a larger distribution platform and a bigger ecosystem, our content scales significantly and is as appealing and more so than even in our own ecosystem...
Thank you. Our next question comes from the line of Thomas Yeh with Morgan Stanley.
I wanted to ask about the domestic linear affiliate revenue trends. I think adjusting out the Fubo headwind, it did look like core revenue declines kind of accelerated sequentially. Was that maybe some noise? Or -- I think on a going-forward basis, it sounded like you still expect the subscriber trends to remain similar to what you were seeing this quarter. But any color on kind of rate versus volume and some of the components there would be helpful.
Thomas, it's Patrick. Thanks for the question. Yes, I would point at Q4 as being something of an anomaly. Domestic revenue declined 16%. If you look at the full year, the revenue decline was kind of 13%, but recall we had sort of the 3% impact from Fubo. So going forward, stripping out that 3% impact that informs our 10% guide on domestic aviated revenue going into 2024. Obviously, the vast majority of that is just the universe. There's a little bit of price in there as well, but we hold serve most of the time.
I would just add, it's also worth noting that in the past 12 months, we renewed more than half of our affiliate subscriber footprint. And there were some big ones in there, Dish, Sling, [ Charter ], Altice, Mediacom, WOW, Philo, [ Bell ]. We did a Rogers deal in Canada amongst others. And then also, obviously, we partnered with Comcast on the [ NOW TV ] offering. And then we launched AMC+ with Charter, as you know, plus the aforementioned Philo deal. So, we're feeling really positive about our relationships with distributors. And as Patrick said, pretty comfortable with how we're moving forward on the partnership side.
Great. And then just a second one with the sale of the 25/7 Media. Patrick, you mentioned, I think, shedding a little bit more light on the international core. Can you maybe talk a little bit about the future of where you see that business? I think there were some expectations that you maybe have some selective avenues of OTT launches internationally. How do you think about the balance of that relative to maintaining the core international networks?
Yes. We've got a great international footprint with particularly strong kind of market positions in both Southern Europe and Eastern Europe, Eastern and Central Europe. These are our businesses with deep roots in these markets, maybe not as well understood here state side. But these are beloved bouquets of channels with thousands of hours of original programming, really kind of part of the fabric of many of these communities. So, we really like this business. We like the idea that we'll be able to shine a brighter spotlight on it, excluding some of the work for higher revenue that we recently divested. A couple of years ago, we were able to use this as a really great platform, of which to launch a number of streaming initiatives internationally. We still think it makes sense in select markets where we have particularly strong relationships and we're doing similar things that we're bringing here in the U.S., which is leaning into those legacy relationships, driving our linear business, but also [ buttressing ] that with digital product. That still makes sense in certain select markets for the markets where we don't have a really strong presence, we've really kind of leaned into the content licensing side.
I would just add, sorry, Tim, it's Kristin again. This is part of the technical reworking that we're doing in order to have a consolidated back in that we can turn on streaming wherever we want globally. So, we partner with digitally with through Amazon there. So, we actually feel like there's a lot of opportunities around AVOD in certain select European markets. So, you couple that opportunity with the work that we're doing technologically. And we think the goal here would be an investment-light model that maximizes the overall returns of the consolidated business. So international, while a small piece of our overall business is one that we feel very positive about.
[Operator Instructions] Our next question comes from the line of Steven Cahall with Wells Fargo.
Maybe first, just kind of stepping back from it all. Kris, and you all are managing the business very, very tightly on the cost side, and things are certainly improving, but I think investors are also just curious if you think you can get back to a level of growth, either at the top line or at the AOI line in the next couple of years. So, I'd just love to get your comments on kind of the bigger picture as to when you see the business maybe starting to flatten out or even grow again? And then just one on advertising with high single-digit declines in guidance for 2024 at domestic. Could you help us think about what your expectation is for kind of volume delivery versus pricing? And what I'm trying to get at is, it's just been such a couple of tough years for comps and then you have the new Walking Dead season this year. So, is that high single-digit really a reflection of just the weaker marketplace that you talked about? Or are impressions still down on a year-on-year basis even as you cycle into some new programming.
Great. I'll take your first question, Steven, on the cost management and the top line. Look, we've been really clear for the last year and going forward about how we're managing the business, streamlining it, making it as efficient as possible. And Patrick's mentioned, our target where we feel we can do $0.5 billion in free cash flow in the next 2 years. But on the top line, we're really waiting out what's going on in the industry. And what I'm happy about is that we continue to produce through Dan and the team, really high-quality content. The TCA event this week was we were so proud and so enthusiastic about the slate that we're putting out right now. And this is part of our ongoing strategy to own and manage franchises that we can monetize over time. So, as the marketplace sorts itself out, the opportunity to grow top line in the out years continues to be there. I think it's just got to settle. So, we're sort of sticking to our knitting, as you said, tight cost management, but effective utilization of the resources that we have, and we're going to stick to the plan, and we're optimistic over the next year to 2 years that this ship will write itself in our industry and things will open up again. But we're confident that we're doing what we've always done best, which is to create great content for various select but very passionate audiences.
Steven, on your second question on volume delivery versus pricing, as we look at 24, I would actually call it impression shifting we are very thoughtfully working towards increasing our digital inventory through the addition of AMC+ as supported tiers. Our growing CTV distribution through, as Kristin mentioned, we have 100 fast feeds right now in market across 11 platforms. We see a large AVOD opportunity in 2024. As we convert that inventory as those impressions shift to digital, we're able to get better yields and pricing out of those impressions. So, while our estimate is not great for '24, we do actually believe that this is moving in the right direction for the future, and we'll continue to just be very, very thoughtful about how we expand our viewership.
Our next question comes from the line of Charles Wilber with Guggenheim Securities.
This is Charlie on for Michael Morris. You guys mentioned and highlighted the fast expansion. I just wanted to dive in on that a little bit and see if you could help us understand the contribution from these and provide any color on how the economics of these work? Is it primarily inventory share, revenue share approach? And then if any impact or lift on the viewership and engagement you may have seen across the portfolio, the linear and subscription services. And then secondly, you just mentioned the potential international AVOD opportunity. I just wanted to get your thoughts on how that may extend to the fast channels businesses as well.
Sure. Charlie, on the first part of your question, I would I would say it's extremely important to our strategy that we are -- we have first sales position on selling our shows. And that has been key to all of our distributions and all of our platform partners, and that has been very lucrative for us and the partners. We don't break out specific contribution of this particular line of business, but it is growing. We are seeing continued growth quarter-over-quarter and expect that to continue through '24 and into the future. On international, the only thing I'd lead with is we see huge opportunity in AVOD and fast. And it's obviously a more nascent market, but as partners like Pluto and Samsung and other global partners start looking at their continued rollout by territory and it overlaps with the regions that we are strong players and, as Patrick mentioned before, we know we will be at the forefront of those growing businesses.
And Charlie, probably it goes without saying, but I'll say it anyway. The advances we've made in advertising in our ability to sell segments, then it's up to the internal teams to deliver that segment across all the platforms in which we insert advertising. So, whether it's fast or AVOD or linear or linear national addressable or programmatic. We just – Kim's team sells the segment and then they place as needed. So, we're getting really sophisticated in really optimizing every single impression that we have and the CPMs associated with it. So that's part of the reason we don't break it out because it would be nearly impossible to do that math. We just -- we put together the best cost to deliver the segment. And then as we mentioned before, very proud of our opportunities and our ability beyond that to deliver attribution reporting and prove out to clients like L'Oreal that they've done really well in placing their money with us and letting us distribute it in the way that best reaches their target audience. So more to come on that front, but the ability to do that beyond the U.S. is really exciting to us.
And I'm showing no further questions at this time. I'd like to hand the call back over to Nick Siebert for closing remarks.
Thank you for joining us today, and we appreciate the interest in AMC Networks. Have a good day.
This concludes today's conference call. Thank you for your participation. You may now disconnect.