AMC Networks Inc. (AMCX) Q1 2015 Earnings Report, Transcript and Summary

Good morning. My name is Christie and I’ll be your conference operator today. At this time, I would like to welcome everyone to the AMC Networks’ Q1 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I will now turn the call over to Seth Zaslow, Senior Vice President, Investor Relations. Please go ahead.

Thank you. Good morning and welcome to the AMC Networks First Quarter 2015 Earnings Conference Call. Joining us this morning are members of our executive team: Josh Sapan, President and Chief Executive Officer; Ed Carroll, Chief Operating Officer; and Sean Sullivan, Chief Financial Officer. Following a discussion of the company's first quarter 2015 results, we will open the call for questions. If you don't have a copy of today's earnings release, it is available on our Website at amcnetworks.com. This call can also be accessed via our Website. Please take note of the following. Today's discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of the future performance or results and involve risks and uncertainties that could cause actual results to differ. Please refer to the company's filings with the Securities and Exchange Commission for a discussion of risks and uncertainties. The company disclaims any obligation to update the forward-looking statements that may be discussed during this call. Further, we will discuss non-GAAP financial information. We believe the presentation of non-GAAP results provides you with useful supplemental information concerning the company's ongoing operations and is appropriate in your evaluation of the company’s performance. Please refer to the press release and related footnotes for GAAP information and a reconciliation of GAAP to non-GAAP information, which we’ll refer to on this call. With that, I would now like to turn the call over to Josh.

Thank you for joining us this morning everybody. AMC Networks is after a strong start in 2015 with top and bottom-line growth in the first quarter driven by the continued strong performance of our original programming and our networks across multiple platforms. With shifting consumer behaviors continuing to reshape video marketplace therefore I spend a few minutes framing our strategic position and share a little bit about how we view our opportunities to achieve near and long-term growth and to increase shareholder value. As we know consumption patterns continue to evolved, viewers continue to gravitate toward higher quality content and each week seems to bring with an announcement of the new over the top service or so-called skinny bundle. It is this new environment that we broadly began preparing for some 10 years ago, when we implemented our original programming strategy. Today, we believe we are setup quite well to benefit from new opportunities to distribute and monetize our content on these new and reconfigured platforms in the few important ways. First as consumers observed more choice over what they watch, they are moving away from TV shows, they are indifferent too and their favoring shows that speak to them some particularly meaningful way and our shows do just that. Our content orientation and development has over the past decade been toward developing and creating high engagement, high quality programming that target select audiences and resonates with those audiences, with brands, shows and talent that are among the very favorites of those who watch them. Shows like IFC’s Portlandia, SundanceTV, Honourable Woman, WE tv, Braxton Family Values and AMC’s Mad Men better are called Saul and The Walking Dead. It is in those small part when we acquired a stake in BBC AMERICA, it take a look at the enormous fan communities around Orphan Black and Dr. Who and we think it’s clear those shows matter quite a lot to the people who watch them. So our shows are not just the show that’s on at 10, that’s after the show that’s on at 9, that’s hoping to pick-up whatever random audience who happens to hung around. We think that approach is less effective in the world in which the viewer exerts greater intention, choice and control. And when viewers have flexibility in choice our shows are among those that they actively select. In addition, there is growing consumer resistance to paying for channel and shows that they don’t value at all. As MVPD’s are increasingly discriminating in their consideration is to whether or not to carry a collection of channels at the certain rate, we feel good about our portfolio. We think its strength to have five discrete channels each of which are programmed with intend. We think its strength to have brands that are differentiated each with their own identity. We think our portfolio is well programmed and well priced. And we think this is already benefited us in our recent affiliate renewals and will continue to serve us well in this new and changing landscape. When it comes to new distribution platforms, we are active participants with our U.S. Networks now available on DISH Swing TV service as well as on Sony’s Play Station View. We see these services as additive in terms of our potential ability to reach new audiences and we will continue to participate in them. On the subject of subscription video on demand, we continue to take advantage of valuable, delayed SVOD syndication window and just last week we announced an exclusive deal with Hulu. In looking for an SVOD partner, we consider the many options available to us. We took many factors into account including economics, territories as well as the impact of the particular SVOD outlet on our linear experience. I’m pleased to say we arrived at a deal with Hulu that is very good for us and we hope very advantageous for them. As new digital offerings and opportunities emerged and as we continue to carefully consider and collaborate where and how we participate, we are confidence at the work we’ve done to procure our business for this changing environment has positioned us quite well now and for the future. Now, if I may all turn to some operational highlights for the quarter in our National Network and International segments. In the current TV season, viewership across our U.S. network is solid strong advertiser demand for our content drove double digit ad revenue growth in the first quarter. The audience profile of our networks remains quite attractive to advertisers. From IFC’s young male demo to AMC and BBC America which topped the list of the most affluent audiences on all of that supportive cable, most notably with AMC’s Mad Men, and BBC America Orphan Black. We are still in the very early days of the upfront but we believe that our investments and content are resonating with viewers and position us well with advertisers. Our National Network’s performance was once again driven by a strong quarter at AMC. AMC ranked as a top three cable network among adults 25 to 54 and adults 18 to 49 in the first quarter. In the month of February AMC was the number one cable entertainment network for adults 18 to 49, thanks to the success of new and returning originals. The Walking Dead to continue to grow at its fifth season and maintains its standing as the number one show on all of television among adults 18 to 49. The after show called Talking Dead also remains vibrant ranking as a top 10 show in the same adult 18 to 49 demo across all off television. AMC’s prequel to Breaking Bed, Better Call Saul premiered to very strong critical and viewer reception, kicking off with the highest rated premier in cable history and ending its first season as the number one new original cable serious among adults 25 to 54 and adults 18 to 49. We’ve already ordered the second season of Better Call Saul and we look forward to its return next year. AMC’s revolutionary [World Drama] return debuted its second season last month. The show which has been received quite well critically has a passionate group of core fans who were enjoying and we are hoping to grow its present audience. Mad Men now in its final run return last month with 3.6 million viewers for its mid season debut. With two episodes left to the series Mad Men remains as much a cultural phenomenon as ever. Across the company we are preparing for the launches later this year of two new series from AMC’s studios. Both of which we think will have great potential to appeal through younger audience. A companion series to the Walking Dead which is called Fear the Walking Dead and a dramatic new series in the martial arts genre called Into the Bad Lines. Both series will premier near simultaneously on AMC in North America as well as on AMC channels in close to 120 territories around the globe. This parts a bit of a milestone for a company since for a long time we’ve pursued a strategy of taking content that we owned and airing it around the world on channels we owned. In addition to launching the AMC channel globally we continue to expand distortion of our international portfolio in key regions across Europe, Latin America and Asia and we are benefitting from new agreements that are adding or repositioning our channels in order to make them more widely available. So, back to U.S., we’re very pleased with BBC AMERICA which ranked among the top 10 most upscale entertainment networks on TV in the first quarter. BBC AMERICA’s award winning series Orphan Black continues to be enthusiastically received with the particularly active and young social media following. We premiered the first season of Orphan Black across all five of our networks, our first such road block as it’s called to expose the show to a wider audience and an aggregate resulted in a more than 50% increase in viewership over the prior season premier. The returning BBC AMERICA’s series Broadchurch another show with the passionate following grew double digits in the key demo over a season one. And the networks Tuesday earth block of natural history programming is up year-over-year in both total viewers and adults 25 to 54 BBC America is U.S. home to what we think is the best natural history programming available anywhere on television. In addition to featuring celebrated shows such as Planet Earth, the network is co-producing a number of epic series which promise really to be quite spectacular including the series called the Hunt from the makers of Planet Earth and Frozen Planet which will premier early next year and little bit more about our other networks. WE tv’s pockets of strength included growing and vital line up of African-American programming with original series such as the returning Braxton Family Values and Mary Mary which continues to grow, in fact its fourth season premier during the first quarter was the series most watched in key demos. IFC’s critically acclaimed Portlandia completed the strong 5th season and the network continues to be a destination for top talent in the comedy area. Will Ferrell and Kristen Wiig return to lead a great cast in the upcoming mini-series Spoils before Dying the sequel to last year’s Spoils of Babylon and Saturday night live Fred Armisen, Bill Hader and Seth Meyers are behind IFC’s upcoming docu parody series with the working title America Documentary. Sundance TV continues to build viewership particularly among high income households. The network is maintaining its reputation for quality programming of the highest level and it was recently awarded to Peabody awards at of total of only nine given across all of television. The recognition was for original series rectify and the mini-series The Honorable Woman starring Maggie Gyllenhaal. With that overview, I’ll turn the call over to Sean S. Sullivan, who will provide some financial detail.

Thanks and good morning. As Josh highlighted our results in the first quarter were strong and the year off to a solid start. Company delivered healthy revenue AOCF and pre cash flow. We are optimistic about the outlook for the remainder of 2015 and I will touch on that after reviewing the first quarter results. In summary, the first quarter delivered total company revenue growth of 27% in AOCF growth of 55%, as a reminder the comparability of our results was affected by Chellomedia acquisition which closed in January 31st, 2014 and the BBC America transaction which closed in October. Turning to our reporting segments, the national networks revenues increased 25% or $114 million, national networks AOCF increased 42% or 76 million versus the prior year period to a total of 253 million. Advertising revenues increased 25% for the quarter to a total of $260 million, a portion of this increase related to the inclusion of BBC America. Excluding BBC A advertising growth was in the mid to high teens over the prior year period. AMC was the primary driver as it benefited from the performance of its original programming most notably the Walking Dead and Better Call Saul. Distribution revenues of the National Networks increased 26% or $62 million to a total of 302 million versus the first quarter of 2014. Affiliate fee growth for the quarter was an access of 20% on a reported basis, excluding the BBC America contribution growth was in mid-teens. The year-over-year growth rate was favorably impacted by rate restes we achieved in connection with several of our recent renewals. I’ll add some additional comments about the outlook for this revenue stream later in my remarks. Distribution revenue growth for the first quarter also reflected a strong double digit year-over-year increase in non-affiliate revenues to principally to increases in revenues related to the licensing of our scripted original programs. Most notably The Walking Dead on various ancillary platforms as well as several of our scripted Dramas on digital platforms, namely AMC’s TURN as well as Sundance’s RECTIFY and the Red Road. Moving to expenses, expenses in the quarter increased 14% for $39 million versus the prior year period. Excluding the impact of BBC America, expenses increase in the mid-single digits as compared to the first quarter of 2014. Technical and operating expenses increased 16% or $27 million compared to the prior year period 297 million. In the quarter we recorded $10 million in charges primarily related to our decision not to move forward with the Pilot White City at AMC. This amount compares to write off of 4 million in the first quarter of 2014, the remainder of the year-over-year variant principally related to the impact of BBC AMERICA activity as well as our continued investment in original programming across all of our networks. SG&A expenses were $180 million in the quarter, an increase of 12% or 30 million versus the prior year period. The increase is primarily related to the consolidation of BBC AMERICA. Marketing costs were relatively flat year-over-year due to the timing of originals across our portfolio of networks. With respect to the International and Other segment, revenues for the first quarter increased $30 million to 106 million. AOCF for the first quarter increased $70 million to a total of 6 million versus the prior year. The increase in revenues primarily reflected the consolidation of the Chellomedia business. As a reminder, we recorded three full months of Chello activity in 2015 compared to two months in the first quarter of 2014. As for AOCF, the results in the first quarter benefited from the extra month of Chello as well as the absence of $40 million in professional fees that we recorded in the first quarter of 2014 related to the acquisition. Foreign exchange fluctuations were a modest headwind in the quarter. The impact of revenue in AOCF was approximately 10 million and 2 million respectively. Moving to net income, total company net income from continuing operations for the first quarter was a $121 million or $1.66 per diluted share compared to $72 million or $0.99 per diluted share in the prior year period. Adjusted EPS for the first quarter of 2015 was $1.76 per diluted share excluding the impact of amortization of acquisition related intangibles. EPS and adjusted-EPS for the first quarter of 2015 included $1 million of restructuring charges and 10 million of miscellaneous expense related to unrealized foreign currency transaction losses. In terms of free-cash-flow, the company reported $62 million in the free-cash-flow for the three months ended March 2015. For the first quarter of 2015, cash interest was 37 million, tax payments were 13 million and capital expenditures were 18 million. Program rights amortization for the three month period was 170 million and program rights payments were 178 million resulting in use of cash of $8 million. This compares to the use of cash for programming of 36 million for the prior year period. The company made a mandatory payment of $18.5 million on its credit facility in the first quarter, as we previously disclosed in various filings, we are required to make similar quarterly payments throughout the remainder of 2015. Turning to the balance sheet, as of March 31st, AMC Networks had a net debt position of 2.6 billion a leverage ratio based on LTM AOCF of 752 million was 3.5 times. When adjusted for consolidated entities that are less than 100% owned such as BBC AMERICA, this ratio increased to slightly about 10 basis points. Consistent with our past communications, we expect to continue to delever through the combination of AOCF growth and free-cash-flow generation. Looking to the remainder of 2015, we are optimistic about the outlook for the company’s performance. As we discussed on our last call, for the full year at our National Networks, we continue to expect advertising and non-affiliate revenue to be growth drivers and anticipate managing the National Networks business to a margin that’s broadly stable with 2014. With regard to affiliate revenues, we wanted to expand a little on our expectations. We continue to expect growth in the mid to high single-digit range. However for the remainder of 2015, we expect to continue to see normalized growth that is excluding the impact of BBC AMERICA in the double-digits. Looking beyond 2015, we expect affiliate fee growth to temper as we cycle through the rate recess. At our International and Other segment, we expect results for the remaining nine months of the year to be impacted by foreign currency headwinds. With regard to our quarterly performance, we anticipate continued variability as a consequence of the specific timing of our investment in content and the airing of our shows. Looking ahead to the second quarter, we expect some unfavorable comparisons from the prior year. At the National Networks, we anticipate advertising growth excluding the impact of BBC AMERICA to be more modest given the programming lineup. On the cost side, we expect expenses to increase year-over-year most notably due to the inclusion of BBC AMERICA in our reported results as well as our continued investment in content. At our International and Other segment, second quarter revenue and AOCF are expected to be down year-over-year due primarily in the foreign currency rates in the timing of various operational items. These factors and aggregates are expected to result total company AOCF growth on our reported basis for the second quarter as relatively modest compared to the prior year period. As for the second half of the year, we’ll have more to say on that in our next call but we do expect the comparisons to be more favorable and as a result anticipate stronger performance. In terms of capital allocation, there has been no change in our strategy. Our primary focus continues to be investing in our core business, we believe this will continue to allow us to grow AOCF on a sustainable basis and we’ll generate in greatest return for our shareholders over the long-term. So with that, we’d like to move to the question and answer portion of the call. Operator, if you please open the call for questions.

[Operator Instructions] And your first question comes from Bryan Goldberg of Bank of America.

I've got two quick ones. First, on the Hulu deal, thanks for the color earlier on the strategy and I am just wondering, with this deal now in place, could you give us any more color on just the current health of the SVOD marketplace, how competitive the process was to secure your output rights, and then how should we be thinking about the per-show economics for you guys in the SVOD window? How have they changed? How has the rate card changed since 2011? And then I've got a quick follow-up.

Sure Bryan. I think that as you well aware of the subscriber growth in SVOD domestically the stated numbers of Netflix Hulu as specifically. So I think it’s been on a pure subscriber growth basis quite strong. I think that there has been an increased broadly in the amount of original programming that the main services we’re doing but while that’s occurring they are still is a very strong interest in what I might call syndicated content and particularly in content from companies like hours that is scripted, that is sequential and that builds interest overtime. So happily we see very strong interest to the type of material that our channels do. From multiple entities, in terms of the economics, we’re not at liberty of course to give out these specifics, but I would simply say it’s a pretty vital market, the competition is strong, the consumption across the multiple services is strong and our content is very particularly that which is desired.

Just a follow-up on Fear The Walking Dead, I guess it's more of a logistical question but how will be show's season one advertising be sold, will it be sold in the current upfront or will it be more of a scatter process and then on the international licensing opportunity, I guess you called out 122 territories for AMC global but how much of the world does that represent? What's the third-party sales opportunity roughly for the show?

Bryan this is Ed. So on Fear The Walking Dead that will be sold as part of the upfront domestic and in terms of its international AMC, we’ve rebrand to the MGM channels and AMC global is now in about 120 countries give or take and so fear will be on most store of all of those channels but that does leave major territories across the globe where AMC does not have meaningful distribution at this time and we will indeed be selling that off to other platforms and markets where we are not actively distributed.

Your next question comes from Michael Morris of Guggenheim Partners.

Two questions. First, Josh, in your prepared remarks, you made a comments with respect to the decision to going to partnership with Hulu about one of the factors was the impact on the experience on the linear network. So I’m hoping you could share a little more about what you meant by that. I don’t know how much detail you can go into, but what the different potential partners broad to the table with respect to impacting that experience? And Then second of all, Sean, and I know you have deflected the question a little bit about capital allocation. I understand that the priority is to invest in the business. But you are deleveraging fairly rapidly. Can you talk, even philosophically, about how you view return of capital? Whether you would return capital to shareholders in the case that you didn't have an investment opportunity that you thought had the right return profile; and if you have a preference for share repurchases or dividends or anything like that. Thanks.

Sure Michael. I think the exact impact and interplay of a what we do which I’ll call it delayed SVOD window round numbers close a year has we think different affects on different types of shows. It can have the effect of introducing new people to it, resample it and then catch up and find it urgent in watch on linear and among some shows it also that are not as urgent it can have a potentially diminishing effect on linear consumption that we’re paid on. So, it is not one size fits all it really as best we understand it bifurcates around content type and so one of the consideration is that we mentioned in the prepared remarks was what impact services that might have 10 million versus 30 million or 40 million U.S. accounts could have on our business. I don’t think it’s a precise science but we certainly took it into account than it was reflected at least in part of the outcome.

In terms on your second question, yes no change in strategy again philosophically we continue to look to do what’s best for long term growth for this business. So, as we’ve said consistently we’ll evaluate opportunities both internal and external as we executing the plan, we’re obviously significantly investing in original content across the business and as we go forward we look to be opportunistic in discipline fashion and I think return of capital is just one component of that as we look to achieve the best long term growth of business.

Josh back to your original comment you’ve spoken about the importance of the ability of the public to sample and income to the show. So, if I think about you choosing to partner with a less well distributer, a left distributed partner does that imply that you felt that there was more canalization of the audience with the larger platform?

No, not specifically. First if I may, I’ll just say Michael, it really is and emprises science and the exact relationship on a show by show basis, I don’t believe is fully understood necessarily by anyone. I was broadly indicating we’ve seen a couple of different partners and it’s A factor only A factor that we take into account and frankly something that is changing and emerging as we speak, as those numbers all different as technology emerges. So, it’s simply was A factor. I wouldn’t read anything more into it than that.

Thank you. Next question comes from Anthony DiClemente of Nomura.

I have a couple. Just on this notion of distributing your content to digital platforms and the effect that can have on linear viewership, I think in your deals with the MVPD you stuck to this concept on VOD of the rolling five episodes and as we talk to investors, I think there is a view out there that that has to change that ultimately the value is increasing for the VOD piece and perhaps diminishing for the earlier piece. And that as you saw your distribution deals, I am thinking of Apple TV that you need to just do more full-season stacking rights. So I just wonder if that is a misplaced notion or if that is the way the world is going and what are the considerations there, I mean do you guys -- are you philosophically really say opposed in providing in-season stacking rights, depending upon the economics? Just wanted to hear, Josh, your view on that and I do have a follow-up. Thank you

Sure, I think that I’ll first say that that our relationship with and distribution of our services on MVPD’s is essential, critical and our profound importance and we are very supportive in every way we can be of their efforts to make their platforms more vital and more progressive and functional and operational on different machines in the home tablets, phones et cetera. I think we are undergoing an evolution on the specifics of how those arrangements proceed and exactly what rights are granted and under what terms and circumstances and so that each time we engage with MVPD we have a robust conversation about what goes in the mix, what rights or advantage or how that is all deployed, there is a lot of variables in the mix. So, I think I can answer your question best by saying, we think our health is tied to their health and we would like and do support what they do of course the balance economics in that mix. But we think our health is tied to their health.

Okay, thanks and one other one Josh. I think it’s interesting that HBO has acquired Vice Media content. It’s an example of kind of established media company going out there and finding alternative content to bring back into the traditional echo system and as you kind of look at it how quickly and rapidly the Eco-system is, it’s changing. There are 4’s of alternative content out there that make sense for you guys to kind of capture or claim from the different world and bring back into your world into when you inconsistent. Just wondering what [indiscernible] and other couple of things and you guys have looked that but in terms of I’m just wondering if there is anything to the top of minds for you in terms of alternative content. Thanks.

Sure. We have in several instances developed TV shows from what was or what were Web TV, Web incarnations. So we’ve had our eye out, I think many others have as well on the web writ large as a sort of training ground and/or farm club if you want to call that way or development opportunity for what goes on your television and so we keep our eye on it in a key manner. We think that it is rich with content creators doing very interesting things, in short and long form and we’ve had instances several where we have both developed TV shows and Aired TV shows. So we think it’s a rich place to look, it’s a rich place to work with. We have had experiences of expanding length and sort of formulizing what were smaller pieces into more complete shows and by the way Fred Armisen and Carrie Brownstein, the people behind Portlandia to name one actually worked together very first on the Web doing shorter pieces and through a series of developments that became Portlandia. I could name a whole series of others. But I think you get the point.

And your next question comes from Ryan Fiftal of Morgan Stanley.

One clarification for Sean and one for Josh if I can. First for Sean, can you clarify little more on the affiliate’s guidance you gave? I think you said continuing at double digits this year. But then you said also it tended like reiterating tended to medium term mid to high single digit guide and does that mean that we should see affiliate’s and tamper to kind of the lower end of that range to get back to that guidance?

Thanks, Ryan. No, again just to reiterate maybe less clarification is we had enjoyed some meaningful resets that you are seeing come through really to signaling and gesturing for the rest of year that as those cycle through you’ll see that and by no means I’m saying that the act of ’15 that were at the lower end of the range. I think the mid to high single digits is what we set historically and I just wanted to call out this intervening period.

And then Josh, question on the international side to you to being going to the rebranding at the MGM network and seems like you secured the rights for both Fear of the Walking Dead and Badlands. Do you see those two shows as a significant catalyst to potentially reset affiliate fees on those networks? And if so, how long do you think that cycle would take? Any thoughts on your outlook for international affiliate fees would be great. Thank you.

Hey Ryan it’s Ed, so yes I won’t shed too much light on specific affiliate deals, but I will say yes we do see as we continue to invest in our content overseas and we bring Fear the Walking Dead and Badlands and other shows on. As our affiliate deals come over and we anticipate higher revenues mainly on the affiliate side also on the ad sales side where we’re continuing to gain momentum. And there are as contrast to the U.S. Ryan, there are many-many platforms, there are many-many distributors of all different shapes and sizes, so in terms of when those deals come up, there we did a little over the math but as they come up we do feel we will say a pay off on the investment on content.

Thank you. Our next question comes from Todd Juenger of Bernstein.

Hi, this is Dave Beckel on for Todd. Couple of questions about the 2016 pipeline for AMC, between Mad Men and Hell on Wheels it’s too early to tell, but if term were to roll off I estimate there’d be about 24 hours to replace. Maybe it’s too early, but broadly speaking, should we expect programming hours to be roughly comparable in 2016 as they were in 2015? And is there anything you’re particularly excited about in the development queue right now? And then also lastly any commentary about the ownership mix you can make, that would be helpful? Thanks.

Sure. We actually -- we really don’t look at the hours as the first variable, I know of course it matters, we look at the material and the shows as what is we make decisions upon because that is what leads to vitality and success. So we have much to look forward to in 2015, Fear the Walking Dead, Into the Badlands, many other shows, so Humans so and also a lot to look forward to and a lot of it new. So there’ll be decisions made on both real consumer performance and our own judgment about vitality. It’s frankly little premature to attempt to handicap quantitatively what happens in 2016. To the second part of your question I would say that what drives us most singularly is great stuff, is shows that work and we have a bias to own where we can because it gives us greater control, that’s the case with The Walking Dead and related material, but we will also license very happily Better Call Saul with somebody where they hold those rights. So we’ll end up I think with a mix of the exact components of which will be determined by the material.

Thank you. Your next question comes from Michael Nathanson of MoffettNathanson.

Thanks for it I have a couple for Josh and then one for Sean. Josh, sticking on the topic du jour which is Hulu versus Netflix, one of the things we've heard from other programmers is that Hulu does a good job of promoting the networks' content as the networks' original content then they also help promote a new season ahead. So can you talk a bit, was marketing a factor that Hulu may be a different type of marketing partner than Netflix was with you?

I think [Audio Gap] is a great partner and they do a great job promoting and frankly an ever better job promoting. So we’re very attracted to their structure and their capabilities, so it sure was a factor that went into the mix that was in our consideration so Michael I don’t think was the factor and we frankly think highly of Netflix as well, so but certainly it was a nice quality of Hulu’s.

And Josh another question there would be, one of the things we learned earlier on with Netflix control a lot of a data about earlier usage, is there any change in the data that you see from Hulu?

No, our relationship with Hulu is just beginning and I think each of the companies has an approach to what they here and go that we think it’s respectable and sensible for who they are. So that it didn’t configure significantly in our consideration.

Okay. And then can I turn to Sean. Sean you help with give me a sense of the few growth this year or next year. Could you give us an update now that you have those resets? What percentage of your domestically affiliate to be footprint is now under wraps for the next three years?

Yeah Michael again I’ll resist coming specifically about what deals are coming up. I think that we have said in past called little last year and half looks do I think. You have a fairly good sense of the deal that have been renewed, we certainly talk that the deals are longer not shorter. So and we’ve also said, we have a great deal of visibility and comfort as a relates to that stream. So I would just reiterate those macro points for you.

Your next question comes from Vasily Karasyov of CLSA.

I have a one for Sean and one for Josh, Sean. Do you mind I’m sorry if I missed, but did you breakout the AOCF contributions from Chellomedia and BBC for the quarter?

No, we did not.

Would you?

No, I don’t think so. I mean again specifically on BBC AMERICA, I think it’s going according to plan, it’s going well, we’re integrating it, we’re working together very well. And I think we’ve made prior comments about the nature inside and scope of that channel as it relates to the Chello it’s now been rebranded AMC Networks International. I think the entire organization is working very closely together is integrating itself and that is almost hard to break it out. I guess, I, Vasily, we direct you to Q that one we filed later today to extent you’re looking for more information in that.

Thank you. Josh you were premiere Orphan Black across multiple networks. I was wondering why you choose that show to do that. For example, you mentioned that you wanted more awareness for TURN. Why not do the same for TURN or what made Orphan Black so special in that regard?

So Orphan Black had exclusively on BBC AMERICA and it really had not have benefit of promotion across sister channels. So there was a new opportunity for BBC AMERICA. Frankly the timing was good, we’re in advance of the up front, we wanted to emphasize to manage the revenue that BBCA is now part of the AMC Networks family and that will be moving together in this upfront. So what we call the clueing cut gave us the opportunity to do that and it did seem we succeed in bringing new eyeballs to the franchise which is not easy to do by the time you get to season three.

And just on TURN I think just describe sort of perfect circumstances that invited the roadblock for Orphan Black. It is interesting, because we do think TURN is a very, very strong show. And as we mentioned in prepared remarks, we would like to see it grow. We don’t think it’s quite as editorially sympathetic and flexible as Orphan Black was for instance for WE tv, we though Orphan Black was WE tv was a good home for Orphan Black Tatiana Maslany, obviously star, a woman and the nature character in pacing of it was suitable. Just specifically about road blocking TURN, we think it’s less immediately hospitable on all five of our channels. But we are very interested in finding ways to increase the sampling because we are very good anecdotal and analytical diagnostics on it. And so we do think it has more audience potential.

Operator, while we take one last question please.

Sure your final question comes from Ben Mogil of Stifel.

So two questions, so on as far abroad, obviously Netflix offer sort of a one shop stop for all most of the mid-international markets. Given the SVOD market internationally is yet enough sort of develop that you can kind of peace together through other providers, a deal that makes sense for you home using that for same certain markets?

It’s a very interesting time for SVOD abroad. So you do have Netflix aggressively increasing their footprint. You have Amazon in a few big markets and perhaps looking to expand and then you have entrenched MVPDs looking to be frankly more aggressive in launching S5 platforms and being willing to pay competitive rates for content in mature markets. So it is a good time to have good content and one of the things that we do is look to maximize the revenue from our shows against the different windows and it really varies market-to-market.

And have you sold through the Walking Dead internationally for SVOD yet?

We have not.

Okay. And then sort of following up on international revenue for the Walking Dead, I’m assuming that lot of the situations fear will not be on a same channel abroad that Walking Dead will be, any concern about how that sort of impacts ratings?

No. The footprint is large and getting charger. We think that the anticipation of the show throughout the world is big and so we’re feeling pretty good about having fear we united with the AMC brand across the globe.

That’s great, thanks a lot.

Alright. Thank you everyone for joining us on today’s call. Operator, you can conclude the call, ma’am.