Good day, and thank you for standing by. Welcome to the AMC Networks fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nick Seibert, Vice President of Corporate Development and Investor Relations. Please go ahead.
Thank you. Good morning, welcome to the AMC Networks fourth quarter and full year 2022 earnings conference call. Joining us this morning are James Dolan, Interim Executive Chairman, and Patrick O'Connell, Chief Financial Officer. Today's press release is available on our website at amcnetworks.com. We will begin with prepared remarks, 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 Jim.
Good morning, and thank you for joining us. Before we start, I wanna take a moment to say that after a thorough search by the board of directors, we were very pleased to announce earlier this week that Kristin Dolan will be taking over as CEO of AMC Networks. Based upon Kristin's considerable executive and operational experience, her 30+ years working in media and entertainment, including her prior history managing subscription-based businesses, the board concluded she is the best candidate for the role. As founder and CEO of the audience measurement and data analytics company 605, Kristin has been on the front lines of the evolution of advanced advertising and audience targeting. She also has a strong record driving organizational change. These are areas of critical importance as we transform AMC Networks and further monetize our high-quality content during this pivotal period in our industry.
Before turning the call over to Patrick, I'd like to briefly provide my perspective on the industry and the company and how we see the business evolving. Across the board, the content industry is being disrupted by cord-cutting in the traditional linear sector or MVPDs and also in the streaming sector. Being disrupted by changing viewership habits, a challenged ad market, and rising content costs. As I've said in the past, the current mechanisms for monetizing content are not working. The content industry needs to reorganize itself. We're seeing this now with most media companies beginning to course-correct to better monetize content and improve the economics of their business. We believe large distributors and programmers will lead the way. AMC will follow. Streaming is a retail business. That's what D2C means.
For now, as the industry continues to evolve, AMC Networks will focus on streamlining our organization, operating more like retailers than wholesalers, driving cash flow, and maintaining our strong balance sheet. At the same time, we will continue to do what we do best, which is making great content. We believe this strategy will position AMC Networks well to navigate current industry dynamics and generate long-term shareholder value as an even stronger company. With that, I will now turn the call over to Patrick.
Thank you, Jim. As Jim highlighted, AMC Networks' unique assets and capabilities position us well to succeed as the landscape shifts and consumer behaviors continue to evolve. We took steps in the fourth quarter to recalibrate our business. We streamlined the organization to create a more nimble operating team and reduced costs to drive increased free cash flow. We are optimizing our content monetization through the array of options available to us. This includes our linear and streaming platforms, as well as opportunistic content licensing. We will further leverage our 15 FAST channels as we continue to expand our innovative advanced advertising capabilities and utilize data to enhance the value of our inventory. We are extending our partnerships with new and existing distributors, with six recent renewals, including Charter, Altice, and Bell Canada.
We are now beginning to see movement towards new pricing and packaging models, including streaming bundles. One example is Verizon, which recently tested an AMC+ and Netflix offer as part of their Verizon +play offering. We expect more to come on this front. We are staying true to our mission of super serving our passionate audiences by creating highly compelling content that breaks through in a crowded marketplace. We had a strong slate in the fourth quarter, including the series finale of The Walking Dead and the first series in our new Anne Rice's Immortal Universe franchise, Anne Rice's Interview with the Vampire. Last month, we followed up with our debut of the second series in that universe, Anne Rice's Mayfair Witches, starring the Emmy-nominated actress Alexandra Daddario.
Based on the first 30 days of viewership, Mayfair Witches is now the most viewed season of any series ever on AMC+, ahead of Interview and the final season of The Walking Dead. On linear, Mayfair is off to a strong start, with ratings continuing to build as the season progresses, and is already a top 10 cable drama for the 2022/2023 television season in key demos. Based on those strong debut performances, we've green-lit both Interview and Mayfair for the first, second seasons. As for The Walking Dead, that world continues to resonate with advertisers and captivate viewers. The final season of The Walking Dead commanded the highest pricing the series has ever seen over the course of its 11th seasons, strong evidence of the continued power and relevance of this franchise.
Also on that point, following its successful run on AMC and AMC+, the 11th season of The Walking Dead launched on Netflix earlier this month. In the first full week it was available, Netflix consumers streamed 1.43 billion minutes of the series. It was the number one most-watched acquired series on the platform and the number two series overall. We are thrilled to have two highly anticipated Walking Dead spinoff series planned for 2023, The Walking Dead: Dead City and The Walking Dead: Daryl Dixon, and a third in production right now and slated for 2024, starring Andy Lincoln and Danai Gurira, who viewers know as Rick and Michonne. Next month, we will premiere Lucky Hank, starring Bob Odenkirk in his follow-up series to Better Call Saul on AMC and AMC+.
Later this year, we will have the second season of the popular and critically acclaimed Dark Winds. This is just a sampling of the new content we will be bringing viewers on AMC, AMC+ and across our other linear networks and streaming services. BBC America is currently featuring its latest natural history tentpole series from the BBC and the remarkable Sir David Attenborough, Frozen Planet II. Next year, we will have Planet Earth III as we extend our leadership position in bringing viewers the very best franchise titles in this very popular programming category. This spring, BBC America, Acorn TV, and AMC+ will bring viewers the third season of the British crime drama Happy Valley, a season that just concluded in the U.K. and became must-watch appointment television in that country.
Acorn TV will also premiere a new season of the hit series Harry Wild, starring Jane Seymour, later this year, in addition to a full slate of its popular international dramas and mysteries. We also continue to see remarkable strength and interest in the franchise hits on our We TV reality network. All three series in the Love After Lockup universe attract large and dedicated audiences, as does our Growing Up Hip Hop franchise, which is slated to expand to include a new series later this year. Before I review our 2022 financial performance and 2023 outlook, I'd like to summarize a few of the one-time items that are reflected in the 2022 results.
First, in the fourth quarter, we realized restructuring and other charges of $449 million, comprised of $404 million of strategic programming write-offs and $45 million of organizational restructuring costs. While the majority of the restructuring and other charges are non-cash, we accrued for the cash portion in the fourth quarter, including $73 million of strategic programming write-offs and $41 million of severance and employee-related costs, which will contribute to a cash outflow of approximately $115 million in 2023. Second, we took a separate goodwill impairment charge related to AMC Networks International. Moving on to our full year 2022 financial performance. Consolidated revenue increased 1% to $3.1 billion. Consolidated adjusted operating income was $738 million, representing a margin of 24%.
Adjusted earnings per share was $9.21. We generated free cash flow of $103 million in 2022. For the fourth quarter of 2022, consolidated revenue increased 20% to $965 million. Adjusted operating income grew 34% to $137 million. Adjusted earnings per share was $2.52. In our domestic operations segment, full year and fourth quarter revenue grew 4% to $2.7 billion and 26% to $861 million, respectively. We ended the year with 11.8 million paid streaming subscribers, representing year-over-year growth of 31%. Subscription revenue grew 6% for the full year and 7% in the fourth quarter.
Full year streaming revenue was $502 million, representing 35% growth year-over-year. Fourth quarter streaming revenue grew 41%. Affiliate revenue declined 5.8% for the full year and 7.5% for the fourth quarter. Affiliate revenue performance was driven by declines in the basic subscriber universe, partially offset by contractual rate increases. Content licensing revenue grew 18% for the full year and 152% for the fourth quarter. The increase in content licensing revenue was driven by the timing and availability of deliveries, including Wall, which is a series produced by AMC Studios for Apple TV. Deliveries of Wall represented approximately $126 million of content licensing revenue for us in the fourth quarter of 2022.
While we typically produce content for ourselves, as we are partial to ownership economics, Wall is an example of how we utilize our assets across the company, including our studio, opportunistically. It's worth noting that generally, productions for third parties have lower margins as compared to the rest of our business. Typically, third-party production margins are in the 10% area. Also in the fourth quarter, we delivered certain titles in The Walking Dead universe that we had previously planned to deliver in 2023. The early delivery of these titles contributed to our fourth quarter licensing revenue growth. Full-year domestic operations advertising revenue decreased 7% to $788 million. Fourth quarter advertising revenue declined 12% to $206 million.
The decline in advertising revenue is primarily due to lower linear ratings and softness in the ad market, as well as fewer episodes of original programming, partly offset by digital and advanced advertising revenue growth. Broadly speaking, our ad-supported networks and digital platforms are experiencing the same environment as others in our space. The Seattle markets have been soft as the climate of economic uncertainty has resulted in our advertising partners being more conservative with their spending. Domestic operations adjusted operating income was $789 million for the full year 2022. AOI performance for the full year was largely attributable to lower advertising and affiliate revenues, increased programming investments, and increased SG&A expense. For the fourth quarter, AOI increased 27% to $154 million.
The increase in fourth quarter AOI was largely attributable to an increase in content licensing revenue and a decrease in subscriber acquisition marketing, which was partly offset by an increase in programming investments. Moving to international and other. Revenue decreased 14% to $443 million for the full year 2022 or 7% on a constant currency basis. Fourth quarter revenue was $108 million, a decrease of 12% or a decrease of 4% on a constant currency basis. Full year international and other revenues reflect lower distribution revenues due to the timing of productions at 25/7 Media, lower advertising revenues due to the impact of the planned wind down of two channels in the U.K. and softer ratings in the U.K.
Fourth quarter revenues reflected similar trends with the exception of content licensing revenues, which increased in the fourth quarter due to the timing of productions at 25/7 Media. International and other AOI decreased 17% to $69 million for the full year 2022, or a decrease of 15% on a constant currency basis. For the fourth quarter, AOI was $13 million, representing growth of 8% or 4% excluding the beneficial impact of FX translation. Full year and fourth quarter AOI performance was driven by revenue performance, lower technical and operating expenses, and lower SG&A expenses. Consolidated free cash flow for 2022 was $103 million and reflected the beneficial timing of certain production-related payments, a reduction in marketing spend, the timing of tax credit payments, and lower cash taxes.
We ended 2022 with net debt and finance leases of approximately $1.9 billion and a consolidated net leverage ratio of 2.6 x. We have substantial financial flexibility and total liquidity of $1.43 billion, including $930 million of cash on the balance sheet and our undrawn $500 million revolving credit facility. We continue to monitor the markets and will be opportunistic in addressing our upcoming maturities. There were no repurchases of AMC Networks' common stock in 2022. Our capital allocation philosophy is both disciplined and opportunistic. First, we will look to support the business with a particular focus towards creating compelling content that resonates with our audiences while balancing overall profitability and cash flow generation. Second, we remain focused on the balance sheet and addressing our upcoming maturities.
Further down our priority list at the moment is the pursuit of strategic M&A and returning capital to shareholders. Moving to our outlook for 2023. Starting with the top line, we expect 2023 consolidated net revenue to be approximately $2.9 billion, largely due to the industry-wide dynamics Jim mentioned. Regarding streaming revenue, we expect growth for the full year at a moderated pace as compared to 2022, driven by lower growth additions due to a reduction in subscriber acquisition marketing. Streaming is an important part of our future and represents a meaningful opportunity for us. We will continue to focus on delivering highly curated content to our passionate and engaged audiences. As we are focused on optimizing monetization across our entire business, we are no longer providing streaming subscriber targets at this time.
Regarding affiliate revenue, we anticipate that existing cord-cutting trends will continue, and our year-over-year comparison will be incrementally impacted by a strategic non-renewal with a virtual MVPD that occurred at the end of 2022. On content licensing, we anticipate a decrease in licensing revenues as our year-over-year comparison is affected by the 2022 deliveries of Wall and certain The Walking Dead universe titles, which we partly offset by new international licensing revenues. Moving to advertising, we expect 2022 trends to continue through 2023, including lower linear ratings and a soft overall ad market, partially offset by digital and advanced advertising revenue growth. We have a strong content slate for 2023, and we are optimistic about our upfront strategy.
In terms of adjusted operating income, we are beginning to realize the benefits of our strategic cost measures, including material year-over-year reductions in programming, marketing, staff, and other costs. As such, for the full year of 2023, we anticipate that consolidated AOI will be in the range of $650 million-$675 million. Beginning with the first quarter of 2023, we will be adjusting our free cash flow definition to exclude distributions to non-controlling interests, which are discretionary in nature. This will better reflect the earnings power of the business in our reporting and will more closely align our definition with those of our peers. Additionally, we will provide supplemental cash flow schedules that will include details regarding one-time items that may affect comparability.
For 2023, we expect to generate reported free cash flow using our updated definition in the range of $70 million-$90 million, which no longer reflects the inclusion of approximately $35 million of expected distributions to non-controlling interests in 2023. The $70 million-$90 million range represents free cash flow on a reported basis and includes the negative impact of approximately $115 million of one-time cash costs associated with our restructuring plan. Our 2023 reported free cash flow guidance implies $185 million-$205 million of free cash flow, excluding these one-time items, which represents the level of cash flow that we can maintain and grow over time.
However, due to the timing and cadence of productions, we anticipate net cash outflows during the first half of 2023 and expect to generate the majority of our full-year free cash flow closer to year-end, similar to the pattern in 2022. In terms of our content investment strategy, we continue to focus on making efficient and highly curated content decisions as we super serve our distinct audiences. 2022 represented our peak content investment year. We continue to refine and improve our approach towards content investments, something over which we have a high degree of control. For 2023, we expect cash content investment to be approximately $1.1 billion as compared to $1.35 billion in 2022.
Looking out past 2023, we anticipate that our cash content investment will be in the $1 billion area, consistent with our historic pre-pandemic levels. 2023 will be a key year for AMC Networks as we execute our differentiated strategy of being everything to someone rather than offering something for everyone. We are thrilled to be nurturing and growing our newest franchise, the Anne Rice Immortal universe, while extending and expanding our most storied franchise, The Walking Dead universe. We are streamlining our organization and optimizing our monetization while meaningfully growing our free cash flow year-over-year. With that, operator, please open the line for questions.
Thank you. If you have a question at this time, please press star one one on your telephone. One moment while we compile our Q&A roster. Our first question comes from the line of Thomas Yeh with Morgan Stanley. Your line is open. Please go ahead.
Thank you so much. Jim, I wanted to dig into your comment about operating more like retailers versus wholesalers going forward. What do you see as the major incremental steps that AMC needs to take to move towards that direction? You guys have kind of been in the streaming market for some time. Is it a different marketing approach or partnerships or something else? Patrick, on the $1.1 billion of programming spend on cash, can you talk a little bit about as kind of the write-down flows through and you refocus the spending, how we look to the general mix of focus around high-end scripted original programming relative to targeted programming and what the balance of that looks like over time? Thank you so much, both.
That's rather a long set of questions. Okay, well, the, look, the, AMC has been a wholesaler, right? As most of the programming companies have been. The, in wholesaling, the, you know, somebody else takes care of the customer, somebody else watches the customer, and somebody else actually ends up pricing to the customer. The, when you go to D2C, all those things become your responsibility. For an organization to move from wholesaler to retailer is to really significantly change its focus. The paying attention to things like the customer journey and churn are all part of becoming, you know, a good retailer. The pricing is becomes very important. Where you know, you apply your manpower.
The, you don't, you know, it is not affiliate relations, not that you're stopping affiliate relations, but the, but affiliate relations.
Is a much smaller task now compared to understanding the customer and serving them well. That is a cultural change for AMC as it will be for a lot of other companies.
Great. Thanks, Jim. Thanks for the question, Thomas. On programming spend, listen, I think it's important to, you know, contextualize our reduction in programming spend, you know, vis-a-vis our historical levels. You know, between 2017 and 2019, AMC spent on average of about $1 billion in cash, I'm talking here. During this period, we obviously had amazingly powerful programming that you all sort of know and love. It was really only during 2021 and 2022 where programming bumped up to the $1.3 billion, $1.35 billion level. We're just taking cash spending down to $1.1 billion this year. That's obviously a meaningful reduction of about $250 million, roughly 20%. This still leaves us with plenty of firepower to continue our, you know, historical programming cadence.
I would say on that front, you know, the cupboard is full. We've got an amazing set of shows I mentioned in the comments at the top of the call here. I think it's also worth noting that the numbers I'm giving you are obviously sort of cash numbers, right? This is distinct from programming amortization that runs through our P&L, which obviously has a little bit of a lag to it versus cash, given that it's attempting to you know, to match earned revenue with expenses. It's an equally valid metric. It just has to do with differences in timing. We are very much focused on cash here, as you've heard from me before.
I think the punchline here is that we're trying to strike the right balance between continued investment in the business and generating sufficient sort of profits and cash flow in the near term. In terms of where the cuts are coming from specifically, we took a hard look at all of our platforms and are trying to maintain as much programming efficiency as possible across all of them. We took a look at shows that were, you know, when we took a look at our cupboard, you know, we had to kind of pull out things that weren't maybe as on brand or on strategy as some others. This happened both across linear and streaming and across channels as well. It was really we looked across the entire portfolio.
We also reduced, you know, some of our spend on the international side as well. In terms of skew linear versus streaming, I would say, you know, we've, given the fact that we've got some of these smaller streaming platforms that we can still invest capital into and grow nicely, we protected those to a degree. We like those businesses. We'll continue to invest there for growth, profitable growth. You know, we liked our programming levels at AMC and AMC+. It's fair to say there may be a slight skew towards ensuring that the monetization of the programming is front and center. Maybe a tinge less exclusive programming on AMC+ as we recalibrate the business for profitability.
That being said, all we're trying to do here is be as thoughtful as possible about, you know, the windowing of the content and really kind of sweating the assets that we have. That's kind of really the game plan.
That's very helpful. Thank you both.
Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone to raise your hand. One moment for our next question. Our next question comes from the line of Robert Fishman with MoffettNathanson. Your line is open. Please go ahead.
Hi. Good morning. Jim, can you help us think about how you see the future of this company? There's obviously been a lot of press reports about possible M&A scenarios over the past couple of years. Do you prefer to see AMC Networks as a standalone entity in a few years or rather combined with another strategic partner? I have a follow-up. Thank you.
And above all . Well, look, I think that, you know, our first concern is always going to be creating value for our shareholders. You know, what form that comes in, you know, is it could be stay the course, it could be an M&A, you know, a strategic transaction. Very honestly, we're very much open to all those ideas. You know, right now, we have, you know, the company that we have, and we're trying to guide it through as if it's going to remain a standalone. That doesn't mean that we won't consider M&A and see if we can improve the shareholder value that way. I think that kind of answers it.
Yes. Thank you. For Patrick, you guys talked about these recent MVPD renewals. I'm just wondering in the context of shifting to this retailer mentality, how should we think about the impact of these renewals on future affiliate fee revenue growth? Given the accelerated level of cord cutting, can we expect pricing to offset any of the cord cutting, or are there other revenues as part of the negotiations with these renewals that can offset traditional affiliate fee declines?
Yeah. Thanks, Robert. Listen, we have, you know, very long-standing relationship with our affiliate partners. They've been profitable partnerships for both parties for decades now. You know, as I mentioned earlier, we continue to invest heavily in premium content. You know, we think we punch way above our weight, not just in terms of the resonance of the content itself, but frankly, the value for money that our content delivers to our distributors. Obviously, you've taken note of the fact that, you know, we've had half a dozen renewals here. You know, we feel really good about these relationships. These relationships continue to expand and grow as many of the larger distributors are now distributing our AMC+ apps, other apps on their platforms.
We think this is a win-win for us, for them, for consumers. There's obviously additional advertising relationships with some of the larger ones as well, we're leaning kind of heavily into that. We see these relationships as critically important. We continue to invest in content to support our viewers and in the technology to support the delivery of our products, you know, vis-à-vis these distributors in whichever form or fashion consumers would like.
You know, let me just add into that. The, you know, the MVPDs, particularly the cable companies, right, are also in obviously in a state of turmoil. There is cord cutting and maybe even more important than cord cutting is the change in viewership habits. These companies are, you know, the likes of Comcast and Charter and Cox, et cetera, they've been in this business a long time. You know, they are adept at, you know, at creating products for their customers, et cetera. Our goal with them should be and is to work with them as they create, you know, new platforms and new environments for their consumers.
We anticipate that, you know, particularly due to our long relationship and our support of them, that we will do those things together. That should accrue well to AMC as a company.
Great. Thank you very much, both of you.
Thank you. As a reminder, to ask a question, please press star one one. Our next question. One moment, please. Our next question is from Brett Feldman with Goldman Sachs. Your line is open. Please go ahead.
Yeah, thanks for taking the question. It was interesting, to hear you talk about thinking more about being a retailer. If we think about retail business models, they tend to have, higher cost structures than wholesale business models, but they also typically get higher pricing in a retail channel than they get in their wholesale channel. A question we get a lot from investors, they say it seemed like in your traditional linear wholesale model, you had a lot of pricing power. As you think about being more retail-focused with your content distribution in the future, how are you thinking about the pricing power that you're gonna have in that kind of model to make sure that to the extent your costs are higher, your, your pricing is higher as well? Thank you.
Well, I think that's part, you know, that is part of the overall strategy of the company, right? What we're saying right now is that those pricing models and those monetization models don't work. I mean, look, essentially, you go back 2.5 years, there was a lot of optimism about streaming. The thought process was at that time that a streaming customer was worth $400 or $500 per customer. That was based on the idea that they were a lot like cable customers, right? That they're gonna be with you a long time. The fact is that, you know, the model for the consumer is very different. In the cable business, right?
If you wanted to cancel your subscription, I mean, you really had to work at it. The same thing honestly was true with signing up a lot of times. Now in the streaming model, it's one click of your mouse. You know, that's the new environment and the pricing structures that, you know, that the industry has had, right? Don't really reflect that reality. They don't reflect the reality that a customer can sign up, binge your product for a month, and then, you know, and then leave you. What does that make that customer worth? Certainly not $500. There needs to be an adjustment.
What AMC is doing is essentially, you know, maintaining its revenue streams, stabilizing itself, not doing that kind of investment that values, you know, streaming customers at $500. Rather, you know, laying back, watching the marketplace, working with re-retailers like the MVPDs and waiting for our opportunity to take our great content and put it into a vehicle that truly monetizes it. That may take a little while.
Got it. Thank you.
Thank you. One moment for our next question. Our next question comes from the line of Douglas Creutz with Cowen. Your line is open. Please go ahead.
Thanks. I think this is a bit of a follow-up to your last answer. You know, everybody decided to invest in streaming very heavily, others more so than you, and it, and it hasn't worked, as you sort of identified. You're cutting costs and to, you know, to reflect that. Obviously, if you can't grow revenue, then it's still gonna be pressure on your business. Do you think your ability to grow revenue is something that's completely in your hands, or is it gonna take some changes to the market structure to make it a more healthy environment? If so, what are they?
Well, that's an interesting question. I mean, in some ways, I do think it's in our hands, right? We have great content. We have a product that the customer wants, right? From that point of view, you do get to sort of, you know, guide your destiny. On the other side, I mean, I really think that what we have to look for is a sea change across the industry. That is something that AMC is not going to be at the forefront of. We're just plain, we're not big enough, we can't drive that kind of change. The marketplace will evolve.
You know, what we need to do as a company is we need to be really in tune with it. The, we have to watch what the customers are doing, you know, how they're behaving with their subscriptions. The, you know, what kind of content they like, et cetera. The, you know, we as I said, we're not going to lead the way. I think the rest of the industry, right, the larger players in the industry will have a much greater impact than we do. The, we'll continue to watch them. We'll continue to watch the customers. We'll get much more adept at things like the research and understanding viewership patterns, and it could be and all that, so we can keep customizing and making our product into a product that consumers will want.
We'll watch the pricing. I do think that that pricing, right, is going to change. The, you know, how it's going to change exactly, you know, I take a pass on being that prescient. I do think we're gonna see change.
Great. Thank you.
Thank you. One moment for our next question. Our next question comes from the line of David Karnovsky with J.P. Morgan. Your line is open. Please go ahead.
Hi. Thank you. Just on the kinda overall shift towards driving more cash flow, I mean, wondering if there's been consideration towards changing the mix of content toward, you know, lower priced programming like non-scripted that still drives a large audience or doing less originals. Then, Patrick, wanted to see if you could just follow on your ad commentary. You know, we've heard from some of your peers about a stabilizing or improving market. Wanted to see if there was an update or maybe you could say what's assumed in your guide for the year with advertising.
Well, listen, the, on the, on the content piece, basically what we did in the last few months is we took, you know, and hung on to some our best programming. The, you know, content that performs really well. I mean, that's what we're good at. No, I don't think that we're going to change that strategy. We're just gonna try and keep it more efficient and work on the monetization models.
Yeah. On the ad market, I don't have much incremental to add other than what you've already heard from others, which is obviously scatter was very weak in the fourth quarter. You saw that in our numbers. you know, over the last couple weeks, you know, we have seen the market start to firm up a little bit. We're not prognosticating into the future in terms of what, you know, the back half of this year looks like, et cetera. Implicit in our guidance is, you know, just continued status quo. Not much to add there, but that's what's embedded in our guidance.
Thank you. Again, to ask a question at this time, please press star one one on your telephone. Our next question comes from the line of John Hodulik with UBS. Your line is open. Please go ahead.
Great. Thank you. Maybe just keeping with the D2C theme. Jim, you talked about, you know, needing a sea change for things to really improve on the from a streaming economic standpoint. I mean, I guess you guys have already addressed it, but just what's your view on the just consolidation of the industry from here? Maybe involving AMC, maybe not. Just how do you see... Do you think we're at the cusp of a sort of another wave of consolidation, sort of driven by what's happening in streaming, you know, given the sort of changes in strategy we've seen from a, from a number of the carriers? Is there any chance that you often hear about sort of bundling streaming services.
Has there been any real initiative, you know, that you've seen that could, you know, sort of bring some of these services together outside of consolidation or anything else you could tell us about, you know, what do you mean in terms of that sea change to change the economics of this business?
Well, on consolidation, I think, you know, you have to watch the customer, the consumer. The. It'd be, you know, it would be difficult right at this moment to. I don't think you'll see the industry pursue, you know, a strong consolidation movement because the industry doesn't yet know how to monetize the content. The. Once they, you know, once they reorganize themselves, the etc., and start to get, you know, a better handle on that and a better strategy with that, then, you know, then you could see consolidation. It will be consolidation around building stronger products and stronger offerings to the customers and building business. Right now, you know, in my. It's just my opinion, I don't see anybody who has the answer to this yet.
You know, without that answer, I don't get the rationale for pursuing a consolidation strategy.
On the streaming bundles question, listen, there's been obviously a lot of chatter recently in the market on this topic, and I think for good reason. You know, obviously, if done properly, it's a win-win-win for programmers, for distributors, and most importantly, for consumers. We like the idea of bundled streaming services. You know, we're, you know, we see some movement towards that. Obviously, you saw in our release, you know, we've had some interesting beta tests with Verizon around a bundle of, you know, AMC+ with Netflix. We think that holds promise. We're holding multiple conversations with other potential aggregators in the market along these same lines. We think, you know, to be successful there, obviously you need to have a high degree of complementarity, if that's a word.
You know, we really wanna make sure that, you know, as a programmer, you're adding something to the bundle. We think in our case, you know, given how well-defined our brands are, given our reputation for the premium programming that we have, and given our attractive price point, that we're a very attractive partner in this regard. The early tests have been positive, and we're leaning in, and we're hope to report more in the coming quarters.
Got it. Thanks, guys.
Thank you. This does conclude today's question and answer session for today's conference. Ladies and gentlemen, this also does conclude today's conference. Thank you for participating. You may all disconnect. Everyone, have a great day.