Q4 2023 AMC Networks Inc Earnings Call

Participants

Nicholas Seibert; VP of Corporate Development & IR; AMC Networks Inc.

Kristin Dolan; CEO; AMC Networks Inc.

Patrick Connell; Executive VP & CFO; AMC Networks Inc.

Kim Kelleher; Chief Commercial Officer; AMC Networks Inc.

Dan McDermott; President of Entertainment & AMC Studios; AMC Networks Inc

David Joyce; Analyst; Seaport Research Partners

David Karnovsky; Analyst; JPMorgan

Robert Fishman; Analyst; MoffettNathanson

Thomas Yeh; Analyst; Morgan Stanley

Steven Cahall; Analyst; Wells Fargo Securities

Charles Wilber; Analyst; Guggenheim Securities

Presentation

Operator

Good day and thank you for standing by, and welcome to the AMC Networks Fourth Quarter and Full Year 2023 earnings call. At this time, all participants are in a listen-only mode. As of the speakers' 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 that today's conference is being recorded I would now like to hand the conference over to your speaker today, Nick Seaberg, Vice President of Corporate Development and Investor Relations.
Please go.

Nicholas Seibert

Thank you. Good morning and welcome to the AMC Networks' Fourth Quarter and Full Year 2023 earnings conference call. And joining us this morning are President and Chief Executive Officer, Patrick O'Connell, Chief Financial Officer, Jim Kelliher, Chief Commercial Officer, and Dan McDermott, President of Entertainment and AMC Studios. Today's press release is available on our website at AMC Networks.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.

Kristin Dolan

Thanks, Nick, and good morning, everyone. It's been nearly a year since I joined AMC Networks. SCEO., 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 our 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 airline 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 is one minute saying in this industry that content is king. We believe that if content is king, cash is queen and we are on a path to prioritize this goal 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 AMC plus. We now have a fully ad-supported distribution ecosystem that includes our five linear networks, several targeted streaming services and programming carriage of approximately 100 channel feeds on partner fast and CTV. platform. 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 will 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 Zoom o 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 or some of our most important and long-standing commercial partners. We're pleased to have them with them on Zuma 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 Filo that will launch early this year. It will make the ad-supported version of AMC plus part of filers based video offering.
Just another example of how the ad-supported tier gives customers additional flexibility, but also boost 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 plus, and we that 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 are the only way we work with our partners. Yes, we ended the year with five of the top 20 dramas on cable and three of the top six new cable dramas. But just as importantly, the cable companies that are seeing the benefits of that linear performance also carry AMC plus 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 Macs late last year. Our shows performed well on their platform, and we saw associated viewership increases on AMC plus 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 four or five times that of linear traditional campaigns with significant boost 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 timeslots 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 shifts 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 Goh, 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 helped develop and deploy the industry's first cloud-based DVR. She then went on to become CTO and COO of cadence 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 plus and high side achieved their number one 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, Darrell Dixon, which is now the most-watched season in the history of AMC plus. And that includes the final season of The Walking Dead itself VHS 85 is shutters. Most watch film ever. The Eminence in shadow Season two is high dives most-watched season ever and toys and resonate is all blacks. Number one, 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 two strikes that shut down production for six 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 immortal detective Sam spade Parish, which is premiering at the end of March with Breaking Bad and better call, Saul jean Carlo XPOVIO in a leading role and the second season of the popular and races interview with the Vampire, which returned to AMC and AMC plus 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 Miss shown as we enter the final weeks of our promotional campaign. We're seeing enormous fan interest and 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 recognition into Activision's blockbuster video game franchise Call of Duty, proving the enduring lower of these beloved characters across the media landscape. This is meaningful indication of the continued fan interest for this universe, which is important to us, given that we have second seasons of the two other character driven spin-offs density and Darryl Jackson on the way in a world in which a premiere 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 three 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.

Patrick Connell

Thank you, Chris. And 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 one-time 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 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 257 Media, which in 2023 generated $91 million in revenue and $4 million in AOI. within our International and Other segments beginning in the first quarter of this year. This segment will be solely comprised of AMC Networks International, improving 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 non-cash 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% $582 million in 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 screening 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 had 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 continued 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 silo, the claim to AMC Studios series we produced for Apple TV as well as significant revenues associated with the delivery of certain 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 year over year. Decrease in AY. 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 Seven 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 2.7 times. 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 or 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 two years, we expect to generate cumulative free cash flow of approximately $0.5 billion in 2023. We reap the benefits of the difficult decisions. We undertook to rightsize 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 onto revenue, excluding $91 million of 2023 revenue from 25 seven media and $56 million of revenue related to siloed 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 will 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 for 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. As you know, 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% compare to 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 silo 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 seven media business. This segment will consist solely of our AMC Networks International business for AMC Networks International, excluding 25, seven media we anticipate declines in distribution revenue to be partly offset by advertising revenue growth, yielding approximately $300 million in revenue for our international segment for 2024, what are 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 airline 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 AO. 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 emphasizes 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 remained 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.

Question and Answer Session

Operator

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one again. Please stand by while we compile the Q&A.
Yes, our first question comes from the line of David Joyce with Seaport Research Partners. Your line is now open.

David Joyce

Thank you. 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 you are programmatic approach compares and contrasts with other linear networks efforts that have been moving digital and also if you could layer on to the digging into the fourth quarter, which was one that saw an acceleration of advertisers playing in some of their budgets to streamers add tiers. How are you also going to market to with that backdrop?
Thank you.

Kim Kelleher

David, it's Jim Kelliher. Thanks for your question on. I think as an industry, we continue to be an absolute leader in national linear addressable advertising. Excuse me, we're taking this difficult time and really leaning into innovation and investments in our technologies on 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 under answer your specific question regarding programmatic, we successfully developed and enabled the first biddable 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 Kristian mentioned, we had a number of partners debut this product with us in Q4, 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 the enterprise at our upfront to the audience plus combined all the development we've done for the last three years to ready for this moment on 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, 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, and it was a difficult quarter, but I think you're seeing the same headwinds. Most of our competitors are our reporting?
Yes, it's we're seeing revenue move into streaming categories, and we launched AMC plus 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.

Kristin Dolan

I would just add, David It's Chris in 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 used on digital to buy linear television, which for us. And I think for most people in the business is a huge opportunity to finally see it swing the pendulum back from digital first to shared purchase of traditional television as well as digital to support the advertiser's efforts.

David Joyce

Great. Thank you very much.

Operator

Thank you. Our next question comes from the line of David Karnovsky with JPMorgan. Your line is now open.

David Karnovsky

Thank you. And Patrick, thanks for the to 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?

Patrick Connell

Yes, sure, great.
Thanks.
The question, David, on your lesson, we took we took some tough medicine at the end of 22 to rightsize 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 pain that we took in 20 to pay 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 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, which is really neat. That being said, we continue to like our position as having ownership economics of our slate. So you'll know that, but for the most part, we own most of the shows on AMC. And so that means we've got really strong optionality in 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 and 24. And that's why we feel confident in giving you the two year guide and generating approximately [$0.5 billion] over the next two years.
Thank you.

Operator

Thank you. Our next question comes from the line of Robert Fishman with MoffettNathanson. Your line is now open.

Robert Fishman

I'd be glad to sign for Robert, thanks for taking the question. I wanted to know if you had any other color to share on the experiments with putting turned titles on MAX and if we can expect it to be used in future.
And also then furthermore, ads more generally how you guys are thinking about growing licensing revenues, balancing building a roster of exclusives exclusive for AMC plus VERSUS?
Yes.
When do you have to third parties?

Kristin Dolan

It's Christian. I'm going to let Dan take the second question and then we'll go back to the max partnership to second question around content was around sharing content between AMC plus and AMC.

Robert Fishman

Is that the question on board in places like the plug versus like between now?

Dan McDermott

Yes, I'll take I'll start with the second question, Robert. So with respect to licensing and outlook, we're focused on this is Dan. By the way, we're focused on generating the best possible return from our content investments we do, 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, um, you know, we seek to on you monetize them as efficiently as possible. And we have five linear platform, seven streaming platform. So we window through our ecosystem in the interest of maximum revenue and profit generation as far as whether that will produce for third parties like we did with silo for Apple on, we look at ourselves as being very opportunistic and highly selective and tactical. When we take on those 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 we'll sell to third parties when appropriate on. It's not our primary business though. So we're not we're not in a situation where we have to chase other platforms and are dependent upon that.

Kristin Dolan

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 receives both on MAX, but then also the associated lift in the more current seasons on for the series that we shared with Max when we have more current seasons on AMC plus.
So we shared a lot of information in a privacy compliant way.
We've seen the two companies, and I think they were pleased with hopefully some positive retention and engagement on the Mac side. And we were certainly pleased with the learnings and the increased viewership that we got on AMC plus for those series.

Dan McDermott

Yes, I'll just add one thing, which is, Adam, what that what that experiment showed us was that when we get onto a larger distribution platform in a bigger ecosystem, our content scale scales significantly and is as appealing and more so than than even in our own in our own ecosystem.

Operator

Thank you.
Our next question comes from the line of Thomas Yeh with Morgan Stanley. Your line is open.

Thomas Yeh

Thanks. I wanted to ask about the domestic linear affiliate revenue trends. I think adjusting out the fubo headwind, it look like core revenue declines kind of accelerated sequentially. Was that maybe some noise or do 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? And any color on kind of rate versus volume and some of the components there would be helpful.

Patrick Connell

Hey, Thomas, it's Patrick. Thanks for the question on. Yes, I would point at Q4 as being something of an anomaly. Domestic affiliate revenue declined 16%. If you look at the full year, the revenue decline was kind of 13%, but recall we had sort of a 3% impact from fubo. So going forward, stripping out that 3% impact that informs our 10% guide on domestic affiliate revenue going into 2024. Obviously, the vast majority of that is just it's the universe of there's a little bit of price in there as well, but we hold serve most of the time.

Kim Kelleher

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 are some big ones in there.
Dish Sling, Charter, LTEs, Mediacom, wow, Filo Bell. We did a Rogers Shaw deal in Canada, amongst others. And then also, obviously, we partnered with Comcast on the NOW TV offering. And then we launched AMC plus with Charter as you know, plus and the aforementioned Filo 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.

Thomas Yeh

Great. And then just a second one with the sale of the 25 Sun 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 network?

Patrick Connell

Yes, we've got a great international footprint with particularly strong UM 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, stateside, but these are I love it, 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 and 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 where we're doing similar things that we're doing 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.

Kristin Dolan

I would just add. Sara Kim amidst Christian. Again, this is part of the technical reworking that we're doing in order to have a consolidated back end that we can turn on streaming wherever you want globally, that's sort of the beauty of delivering over IP as opposed to trend traditional transmission, but on particularly in Spain, I just wanted to mention that we just expanded distribution of AMC plus with Vodafone this summer. And then we've made a lot of progress with our linear networks in Spain and in Portugal with AMC Select. So we partner digitally with through Amazon there. So we actually feel like there's a lot of opportunities around Avon 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.

Thomas Yeh

Okay.
Super helpful. Thank you so much.

Operator

Thank you. As a reminder, to ask a question at this time, please press star one one on your touchtone telephone.
Our next question comes from the line of Steven Cahall with Wells Fargo. Your line is now open.

Steven Cahall

Thank you.
Maybe first, just kind of stepping back from it. All you, Chris 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 just wanted to get your comments of 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 digits declines in guidance for 2024 for domestic. Could you help us think about what your expectation is for some kind of volume delivery versus pricing and what I'm trying to get at is it's just been such 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 our impressions still down on a year-on-year basis, even as you cycle into some new programming.
Thank you.

Kristin Dolan

Great. I'll take your first question, Stephen, 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, you know, streamlining it, making it, making it as efficient as possible. And Patrick's mentioned, you know, our target where we feel we can do a $1 billion in free cash flow in the next two years. And but on the top line, we're really waiting out what's going on in the industry. And what what I'm happy about is that we continue to produce through Dan and the team really high-quality content that 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 on, you know, that 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, you know, 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 casinos year to two years that think the ship will right 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 create great content for very select, but very passionate audiences as Stephen.

Kim Kelleher

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 owned working towards increasing our digital inventory through the addition of AMC plus ad-supported tier. Our seats are growing TTV. distribution through, as Kristen mentioned, we have a 100 fast speeds right now in market across 11 platforms. We see a large, a bad opportunity in 2024 as we convert that inventory as that as those impressions shift to digital, we're able to get better yields and pricing out of out of those impressions. So well, while our estimate is not great for 24, we do actually believe that 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.

Steven Cahall

Thank you.

Operator

Thank you.
Our next question comes from the line of Charles Wilbur with Guggenheim Securities. Your line is now open.

Charles Wilber

Hi, good morning. This is Charlie on for Michael Morris. I know 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? I mean, is it primarily inventory share revenue share approach? Then if any impact or lift on the viewership and engagement, you may have seen across the portfolio that have linear and subscription services? And then secondly, you just mentioned the potential international Avon opportunity. I just wanted to get your thoughts on how that may extend to the FastChannel businesses as well?
Thank you.

Kim Kelleher

Sure, Charlie. On the first part of your question, I would say I would say it's extremely important to our strategy that we are we have for sales position on selling our shows, and that has been 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 contributions of this particular line of business, but it is 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 add lead with is we see huge opportunity in a bar 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 on strong players. And as Patrick mentioned before, we know we will be at the forefront of those growing businesses.

Kristin Dolan

And Charlie, probably it goes without saying but I'll say it anyway on 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 on which we insert advertising. So whether it's fast or Avon or linear or linear on national addressable or programmatic, we just we can see ourselves the segment and then they place as needed. So we're getting really sophisticated and really optimizing every single impression that we have on 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 construct 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 leading us distributed 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

Charles Wilber

Great.
Thank you.

Operator

Thank you. And I'm showing no further questions at this time. I'd like to hand the call back over to Nick Seibert for closing remarks.

Nicholas Seibert

Thank you for joining us today, and we appreciate the interest in AMC Networks.
Have a good day.

Operator

And this concludes today's conference call. Thank you for your participation. You may now disconnect.