Seth Zaslow - AMC Networks, Inc. Joshua W. Sapan - AMC Networks, Inc. Sean S. Sullivan - AMC Networks, Inc. Edward A. Carroll - AMC Networks, Inc..

Michael Morris - Guggenheim Securities LLC Vasily Karasyov - CLSA Americas LLC John Janedis - Jefferies LLC Todd Juenger - Sanford C. Bernstein & Co. LLC Benjamin Mogil - Stifel, Nicolaus & Co., Inc. Ryan Fiftal - Morgan Stanley & Co. LLC John Belton - Evercore ISI Alexia S. Quadrani - JPMorgan Securities LLC.

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' Full Year and Fourth Quarter 2016 Earnings Release 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.

Thank you. I will now turn the call over to Seth Zaslow, Senior Vice President, Investor Relations. Please go ahead..

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 full year and fourth quarter 2016 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.

Of particular note, as previously disclosed last quarter, the company has renamed the non-GAAP performance measure formerly referred to as adjusted operating cash flow, or AOCF, to adjusted operating income, or AOI. The definition and components of adjusted operating income are identical to the definition and components of AOCF.

In addition, the company has modified the definition of adjusted EPS to exclude certain items that we believe affect the comparability of our performance. For further details, 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..

China Girl from the Oscar-winning director Jane Campion and starring Nicole Kidman and Elisabeth Moss reprising her Golden Globe winning role from the first Top Of The Lake. On the international front, we continue to fulfill our long-term strategy to populate our global channels with original programming, much of it produced by our own AMC Studios.

This strategy has resulted in consistent revenue growth and has been a key driver in the expansion of our international footprint.

We also continued our distribution momentum for our international channels recently, securing new deals with leading platforms throughout Europe, Latin America and Africa, reaffirming the strength of our flagship AMC Global Channel as well as other networks within our AMC Networks international portfolio.

Overall, we're quite pleased with our performance in 2016 and are well-positioned to take advantage of many growth opportunities for the business as we look to 2017 and beyond. Now, if I may, I'd like to turn the call over to Sean for details on our financial performance..

increased investment in our various digital initiatives; a decline at IFC Films related to timing; and a decrease at DMC, the technical operation facility that supports our international networks as well as other third-party clients.

For the full year, adjusted operating income reflected an increase at our international networks, offset by increased investment on our digital initiatives and a decrease at DMC.

Moving to EPS, as we disclosed in our press release, we modified our definition of adjusted EPS to make it a more relevant metric in assessing the overall performance of our business. For the fourth quarter, EPS on a GAAP basis was $0.20 compared to $1.23 in the prior-year period. On adjusted basis, EPS was $1.30 compared to $1.39 in the prior year.

GAAP EPS includes a $68 million non-cash charge, or $0.90 per share, related to DMC. As we outlined in our earnings release, we revised the outlook of this business, primarily due to competition and evolving broadcast technology resulting in the impairment.

The year-over-year change in both reported and adjusted EPS also reflect the absence of a $16 million gain that we recorded within miscellaneous income expense in the fourth quarter of 2015. As we discussed at that time, this gain was the result of the acquisition of a controlling interest in a previously non-consolidated joint venture.

For the full year, EPS on a GAAP basis was $3.74 compared to $5.01 in the prior year. On an adjusted basis, EPS was $5.73 compared to $5.54 in 2015. In terms of free cash flow, the company had a particularly strong year. We generated $426 million in free cash flow for the 12 months ended December 2016.

For the 12 months, tax payments were $106 million, cash interest was $128 million, capital expenditures were $79 million, and distributions to non-controlling interests were $9 million.

Programming rights amortization for the 12-month period was $862 million, and programming right payments were $973 million, resulting in a use of cash of $111 million. This compares to a use of cash for programming of $91 million for the prior-year period.

Turning to the balance sheet, as of December 31, AMC Networks had net debt and capital leases of $2.4 billion. Our leverage ratio based on an LTM AOI of $879 million was 2.8 times, down slightly from 2.9 times at year-end 2015.

In terms of capital allocation, our primary focus remains investment in our core business, as we believe this will allow us to continue to grow adjusted operating income on a sustainable basis. We will continue to be disciplined and opportunistic in our use of capital for repurchases and/or non-organic investments.

During the fourth quarter, we allocated $95 million of capital towards our investments in RLJ Entertainment and Funny or Die. As Josh discussed, these are two examples of investments that we believe are strategic and expand our presence on emerging digital platforms.

In the fourth quarter, we also took advantage of what we believe were attractive trading levels in our stock to accelerate our stock repurchase activity. The company repurchased $113 million worth of stock during the quarter. This represents approximately 2.2 million shares.

For the full year 2016, we repurchased approximately 4.1 million shares for $223 million. Subsequent to the end of the quarter, the company had repurchased an additional $45 million, or approximately 824,000 shares. As of last Friday, the company had $231 million available under its existing authorization program.

So program to-date, we've repurchased approximately 7% of our outstanding shares. We view our equity as an attractive investment alternative and expect to continue to utilize our share repurchase program to take advantage of this opportunity.

Beyond that, we're consistently evaluating ways we can be opportunistic, but disciplined, in the use of our capital, with our focus being on how best to generate the greatest value for our shareholders over the long term.

Looking forward to 2017, we expect to grow both total company full-year revenue and adjusted operating income in the low to mid-single digits. This growth will be led by our National Networks, where we expect distribution revenues to again be the main contributor to growth.

With respect to distribution revenues, we expect the non-affiliate revenue stream to be the more significant driver of growth. In terms of affiliate revenue, we expect the rate of growth in 2017 to accelerate modestly as compared to 2016.

We're excited about our programming lineup on all of our networks, particularly AMC, which includes an expanded mix of new and returning shows. We'll continue to look to take advantage of strong demand for our content to maximize advertising revenue.

At the National Networks, while we continue to invest in content, mainly in the form of programming and marketing, we remain focused on limiting growth in the remainder of our expense base. As a result of this focus on cost, we anticipate managing this segment to a margin that is largely consistent with 2016.

As for our International and Other segment, we expect to see revenue growth that is similar to what we reported in 2016, assuming a constant currency. As for adjusted operating income at our International and Other segment, we expect a modest decline in terms of absolute dollars in 2017.

We expect continued growth from our international cable networks, as we execute on our strategy of further developing and expanding our international footprint. This growth is expected to be more than offset by our continued investments in our digital initiatives, as well as a temporary decline in the performance at the DMC business.

As for the cadence of our performance during the year, we anticipate continued quarterly variability as a consequence of the specific timing of our investments in content and the airing of our shows. In the first quarter of 2017, we expect National Networks' advertising revenue to decline year-over-year due to unfavorable comps.

However, we're expecting those comps to turn more favorable as we move to the middle of the year. Due to the timing of expenses, most notably programming and marketing at our National Networks, we expect our most challenging comps in terms of AOI to come in the first quarter of 2017.

As the year progresses, we expect growth, particularly in adjusted operating income, to be weighted towards the back half of the year. So overall, we feel good about how the business is positioned for 2017 and the various opportunities for growth that are ahead of us. So with that, we'd like to move to the question-and-answer portion of the call.

Operator, if you could please open the call to questions..

Thank you. And your first question comes from Michael Morris with Guggenheim Securities..

Thank you. Good morning. Two topics, if I can; first, on viewership and advertising, Josh, you mentioned the significant viewing outside of the live window.

Can you help us understand the order of magnitude of the consumption outside of what the existing advertising currency is, whether that's been growing and maybe investors don't appreciate the absolute audience size? And also, have you seen any progress in monetization of that broader viewing? And is there anything we can look for this year, anything you anticipate that could help monetize that? And then, my second question is on Hulu.

Specifically, you have the SVOD relationship. I don't believe you've been announced as being included in the virtual MVPD product.

What is your outlook there? And do you have any concern that because your content is on the SVOD service, it could be used by Hulu to sort of supersede a linear relationship with you and at least deliver some of your product to the consumer? Thanks..

Sure. Yes. So, I'll take Hulu first, if I may, Mike. I think, if I may, what we said in our prepared comments is that there are three virtual MVPDs operating today, and we're a member of each of them.

So, if I can say on the merits, we think our channels are not only wise for every virtual MVPD to carry, but I might stop short of saying the best buy, but I might say the best buy and the smartest buy to include a virtual MVPD offering because, as we mentioned, we have several of the top shows on cable TV. That's a good start.

And our wholesale rate, as I'm sure you know from looking at third-party data, is relatively low. So we think it's smart business for anyone who wants to connect subscribers to a virtual MVPD to include the five AMC channels at the rate that we sell them at.

In terms of the disposition of any one negotiation, if you don't mind, Mike, I'll probably restrain from commenting and simply say that we're talking to everybody.

We really do think that at any time, whether it's now, median time or later, that when you're in the business of selling subscribers a service and you want them to connect at a price and then you need them to stay and continue to re-up every month – and I'll add, particularly if it's not supported by a bundled broadband or IP telephony package that, in a sense, can help stabilize certain connections, that AMC Networks is among, if not the, wisest choice to make of what to have.

So I'll stop short of commenting on Hulu. I understand your comment about can you get it and not get it and sort of have it because the programming is on later. I would say that the answer to that is no. You want the channels. You want them now. You want the premieres. You want 10 million people watching The Walking Dead when it premieres at that moment.

So I don't think the delayed issue is a sort of negative consideration against us..

And, Mike, it's Ed. On the other part of your question, yes, we do see significant annual growth in digital impressions. And we continue to get better at monetizing it each year. The growth of our advertising revenue on digital impressions grows by double digit, and we monetize that not only on VOD, also AMC.com.

And AMC recently launched advanced platforms on Apple TV, on Xbox, and Roku. So that is a significant area of growth for us. I would just say generally, our philosophy is if we produce compelling content, viewers will seek it out, they'll find it, and we will have the opportunity to monetize it..

Great. Thank you both..

Thank you. Your next question comes from Vasily Karasyov with CLSA..

Thank you very much. Sean, I wanted follow up on your remarks about revenue in 2017, if I may.

First of all, would it be correct to assume that you guys have high visibility into non-affiliate distribution revenue because it's driven by availability? So can you please tell us how much deceleration we should expect or at least what puts and takes are? And then, I have an advertising revenue question..

Yeah. Vasily, again, I think that I was fairly specific in terms of total company revenue, in terms of our expectation. As you know, we've seen historically significant growth on the non-affiliate and distribution.

You are correct that we do, in most cases, whether we're selling to an SVOD platform, whether we're selling internationally to foreign distributors that we do have reasonable visibility, but I'll stop short of guiding you to a percentage in terms of growth, other than we continue to invest significantly in content.

We continue to expand the number of originals, not only on AMC but on other channels as well, and that gives us confidence in the comments that we made today..

All right. Thank you. And then, about advertising revenue, you outlined all the exciting originals coming up.

Wouldn't the logical conclusion from that be that your 5% revenue growth, barring a black swan event, should be accelerating in 2017, given the market and given the, again, the number, the sheer number, of originals coming on?.

Yeah. So, Vasily, yeah, the expectation and the programming slate will result in increased hours in 2017 across the channels, specifically on AMC as well, or particularly, I should say, given the size and magnitude. As you know, we talked about the prior upfront. We talked about the pricing and the benefits that we enjoyed in that upfront.

Obviously, scatter pricing and the demand for our originals continues to be strong, and we are seeing good things in pricing. So at the end of the day, we feel good about how we're positioned. We're feeling good about creatively what we're presenting to the marketplace.

But at the end of the day, the market is the market, so I think for the rest of the year, stay tuned..

All right. Thank you very much..

Thank you. Your next question comes from John Janedis with Jefferies..

Thank you. Josh, you talked about the rapidly evolving landscape and, as you know, some of your peers have talked about somewhat of a shift in strategy to focus on a core group of networks, given the skinnying of the bundle.

And I appreciate the success you've had with distribution to-date, but was curious if you see AMC employing a similar strategy at some point in the future..

Sure, John. It's interesting. If you count the number of channels that are being offered – I'll use that polite word – to the MVPD industry from us and our peers, I'll give you some rough math. Some of our peers have 20-plus channels. Some have 15-plus channels. Some have 10-plus channels. We have 5 channels.

So, we have been of the mind for some time that quality matters, brands matter, content matters, engagement matters, investment matters. And you have to matter or you don't get a free lunch for showing up with 22 channels; that a day of reckoning would come when your content would be called to account.

And that creating that precedent would be an unwise one. And so we did expand our portfolio. And we purchased Sundance because we thought it was a brand that was very well defined and that we could contribute to through our editorial resources.

And then we purchased a controlling interest in BBC AMERICA, because we thought it was a brand that was very well defined that was supported by a substantial content initiative coming from the BBC that we could work with and complement.

And so actually, I will say that we think that we have already skinnied our offering down, by which I mean to say, each channel is vibrant. It's well defined. It's potent. And, frankly, collectively, they're under-priced. So I think we are uniquely well-positioned, by what we've done, for the changing nature of the landscape and manner of consumption..

That's helpful. Thanks, Josh. Maybe separately, I think last quarter, you talked about some viewing shifting to news ahead of the election.

And just given the news cycle and still elevated ratings for news, do you think the audience has finally normalized or shifted back to non-news or is this something we should kind of be thinking about going forward, given what seems to be the daily news cycle?.

I'm reluctant to create a prophecy about what occurs in that arena. It's been filled with surprises. Those who perhaps are more authoritative than me would have suggested a greater decline in news and events may have created more sustainability in news ratings than we would have anticipated post an election cycle.

So I'll sort of stop there and say, I don't know..

Okay, neither do we. All right, thank you..

Thank you. Your next question comes from Todd Juenger with Sanford Bernstein..

Well, hi. Good morning. I'd like to turn to two sort of more strategic topics, if I may.

So in no particular order, first, just on some of these direct OTT, if you can call them that, services that you guys participate in, either through your own brands and ownership or with partners, I think I counted at least five that were named in your remarks, Josh. I won't rename them. And I don't think that's even all of them.

I think you've got more than a handful, sort of direct, I'll call them, niche-y branded, sort of over-the-top direct services.

And the question, I guess, I'm getting at is it just seems like just a lot of pretty narrowly-targeted services that probably cost a lot to sort of create, a lot to acquire subscribers, and just one might wonder what the ultimate potential for any one of those is and collectively? And just how you think about the sheer number of all that, as opposed to maybe concentrating your resources in sort of a more robust effort, so that's one strategic topic.

The other I'd like to ask is, again, if you don't mind, both in your prepared remarks and in the press release, there's a lot of talk about AMC Studios and the great original production editorial resources you have.

Wonder, in your mind, the time placed (39:35) on how far you are willing to think about taking that studio model, and specifically, would you consider producing content directly for other parties, be they SVOD players or even other cable networks or is that too far in terms of the studio analogy? Thanks..

Sure. On the subject of defined niche OTT services, we are, by our own hand and investors in a total of four. We operate two ourselves. And we've invested in RLJ, which operates two, so that's four. I'm sorry. Forgive me. I left out BritBox, which hasn't yet launched. Forgive me. So that is five. So we think that it is early days.

And, by the way, those are all subscription, right? None of them have ads. People buy them all. And BritBox is not yet launched, but the pricing is generally between on the lowest end, a little below $5 and on the highest end, a little above $6. So they all have somewhat similar pricing. I would first say that it's early days still for niche SVOD.

It's certainly less early days for general entertainment SVOD. We have Netflix, Amazon Prime, Hulu as dedicated and they've established what their patterns are. And then, of course, there are conversions of the ad-supported premium services that have been faring, I'm sure you know better than I, HBO, SHOWTIME, STARZ, et cetera.

So, I think it's early days for these very defined niche SVOD services. What's curious about them is that they're very defined. They have an immediate constituency, and they're available with ubiquity on day one. We don't enter any of them randomly or casually.

We believe that each has a serious and fundamental premise and core audience and relationship to our own content. So forgive the length of my answer, but it's going to join to your second question a bit. So, and they're each at different stages of maturity in what is the early days. So, as we mentioned, one is called Sundance Now.

It probably, I think, speaks for itself. The other is in the horror area, the genre area that we think we have some proximity to, obviously through Walking Dead and lots of other material that we produce.

And then the British streaming service, Acorn, is something that we're pretty familiar with through our relationship with BBC and the co-productions we've done with BBC and other UK entities.

And Urban Movie Channel, which is in the RLJ portfolio, we also have some editorial proximity to by virtue of the fact that WE tv is a significant purveyor of Africa-American or urban-oriented programming. And then the to-be-launched BritBox, a partnership with our partner, BBC, and ITV is also in the British area.

So, I just wanted to clarify that it is not random or casual. And we are not on the hunt wildly for editorial areas that we don't understand well. We think we understand these very well. We understand who the people are. We understand the material that they like.

And so to your question, no, I don't think we're over-extended and I don't think we're wide or long. I actually think we're appropriately, and at the right level of risk and investment each being different, involved.

And we actually feel that it's a progressive, interesting, highly appropriate, strategic and that will yield a very good return over time. So that's the answer to the first question. To your second question, we do think that the company is becoming, and has become, more of a studio as opposed to only a channel operator.

And that already has put us in a position of making TV shows that play in our own channels; that go into a subsequent window in the U.S., generally on Hulu or Netflix; that are on our own AMC Global Channel, often in a worldwide simultaneous premiere, which allows us efficiencies in marketing; and that we sell in subsequent windows overseas where we have channels, and if we don't have channels, that we sell to SVOD services where we're not present.

So that is essentially sort of standard studio functionality. To your question about whether we would produce where we don't have an initial home for ourselves, we have not yet to-date. And we would certainly, if it was a good business, we would entertain it. We want to be careful about our financial performance and ROI.

And we want to be careful and disciplined about dealing with material that we think we have an understanding of proximity, authority and we can really understand.

So I wouldn't rule that out, but I would say that for the immediate term, our point of view is to stay, if you can call it that, somewhat close to home and to expand significantly while we're somewhat close to home because the economics are clearer and more determinable..

Thanks, as always, for your thoughts, Josh..

Sure..

Thank you. Your next question comes from Ben Mogil with Stifel..

Hi. Good morning. Thank you for taking my question.

So, in terms the virtual MVPDs, Bob Bakish on the Viacom call was saying that they thought the virtual MVPDs were still likely moving people and were still for a while going to move people from sort of higher priced services, the full package, to sort of lower price ones, but not actually add sub numbers.

Bob Iger on the Disney call was much more optimistic they would actually grow the pie in terms of sub numbers.

So, Josh, where do you stand on this sort of debate, if you will?.

Yeah. I actually think, first of all, I think it's unknown. I think consumer behavior in this arena, there's not enough data yet to – well, I haven't been exposed to enough data to sort of say with authority it will be that or that.

It may be actually a little bit of both because price-sensitive consumers, I think, and perhaps younger demos have a greater likelihood, price-sensitive and younger, to sort of ultimately result in either something equal or mildly net down.

I think that consumers who have greater means and are not as young, have a greater propensity and higher likelihood, frankly, to buy both.

And there are instances now we're seeing in reasonable numbers when we look at data, where there are actually people purchasing both or households purchasing both, which is adding net incremental to the MVPD universe. So a lot will be told, I think, as prices evolve and offerings evolve and the manner of marketing evolves.

Sorry to give you an answer that doesn't say it's one thing or the other. I really do think it's going to get a bit of both.

In the end, I would be more encouraged than discouraged about the vitality that it provides for the overall ecosystem and the number of subscribers that will ultimately be paying people who do what we do for a living, because I think that the offerings will increasingly be guided by consumer considerations and will adapt to what people want.

And they will find points of interest and sympathy that overcome irritation when somebody is like I've got too many channels and the price is too high or that show pockets of great interest when they actually perhaps even alter the manner in which they offer programming as they compete over time.

So I would be, in aggregate, very encouraged and say that there's going to be an evolution of what was a sort of one-size-fits-all-ish approach to greater variability in price, greater variability in content and greater variability in offerings. I think that will have an energizing effect on the market. We'll see some a little bit of deletion.

And we'll see some addition. And I think it's likely to be net ahead..

And the households that are getting sort of a virtual MVPD who already get traditional MVPD service, I'm not sure how much demographic data you have on them.

Are these, by and large, households who are sort of family units where you're sort of getting the virtual MVPD for the sort of teenage-aged kids? Do you have a sense of sort of the demographics around who's getting that?.

I don't have enough data to give you a really clear portrait of it. A lot of the data that I have is admittedly anecdotal and it's sort of preliminary.

But we've certainly seen some of that, just what you said, which is a second member of the household, sometimes younger, subscribing to, whether paid for by parents or not, a virtual MVPD offering while the household maintains a hard line-carried MVPD offering, video offering..

Okay. That's great, Josh. Thank you very much for the views..

Sure, Ben..

Thank you. Your next question comes from Ryan Fiftal with Morgan Stanley..

Great. Thanks. Good morning. So two, if I may, one for Ed or Josh; I just wanted to ask about the decision to run The Son on Saturdays.

I know that's in keeping with some of your past practices with Hell on Wheels, but just wondering how you were thinking about that, the risk-reward versus a Sunday slot and if there's any risk that limits potential breakout potential for that show.

And then for Sean, a question on affiliate fees; I think you said modest acceleration in 2017 versus 2016. So, my question is whether that includes any pressure from rate resets from consolidation of the MVPDs. I think some of your cable network peers have seen some temporary declines because of that.

And I'm wondering where we are in the process for working through that with you guys. Thank you..

Hey, Ryan. Right. So, on The Son, you asked a question, and you mentioned Hell on Wheels, and that was at the top of our consideration set in scheduling it. We think AMC had carved out a nice audience on Saturday nights for, hopefully, high quality dramatic series that have Western overtones, and we thought it would be good to capitalize on that.

There's a lot of competition on Sunday nights, as you're well aware. There's only 52 of them. And so we have to decide where to put our shows. And so we do a profile of the likely audience for that show and we thought that was the best play forward.

Incidentally, we're just off this weekend a very positive experience with premiering Planet Earth II, the new natural history series on BBC AMERICA on Saturday night. We did a bit of a roadblock between BBCA and AMC and SundanceTV.

But even when you look at the numbers on BBCA only, it was the highest unscripted number that we've seen in several years on the network. So very encouraging and it does say with the right kind of show, HUT levels are high enough that you can really penetrate and break through..

And then, Ryan, as it relates to affiliate fees, I think we said it consistently. I think you've seen it publicly. We have gone through a majority of our major distributors in the renewals, again, a modest acceleration in 2017 versus 2016. I won't define it by more than that.

As you know, that's a rate of growth in terms of dollars, so that factors in all elements of consolidations, sub counts, et cetera. So, I think we'll leave it at that..

All right. Thanks, guys..

Thank you. Your next question comes from David Joyce with Evercore ISI..

Hi. Thank you. This is John Belton on for David. Just a quick one, can you help us think about how much some of these new distribution platforms contributed to distribution revenue growth during the fourth quarter, particularly? Thank you..

Yeah. John, thanks for the question. So, again, we don't disaggregate. We disclose affiliate revenue. We're giving you the rate of growth. That includes not only our traditional distributors, but any of the new virtual MVPDs that are there. So, it's all captured. As Josh said, we're on Sony. We're on Sling. And we're on DIRECTV NOW.

I think it's well known in the marketplace in terms of the disposition of each of those players and their view on pricing and rate. But we provide a blended number for all distribution on the affiliate side..

Okay. Thank you..

Operator, we'd like to take one last question, please..

Thank you. Your next question is from Alexia Quadrani of JPMorgan..

Thank you.

Just one question, sort of circling back on the non-affiliate licensing revenues, really two parts; one, can you talk about, I guess, how much of a concentration that revenue was from The Walking Dead, or is it really a variety of different programming that drove that strong performance that you saw in the fourth quarter really for 2016? And then the second sort of bigger-picture part of that question, on the same topic, when you look at the outlook for 2017 and beyond, I guess how would you balance the demand for so much more original programming out there, so much more supply with perhaps higher demand from international markets and everything else for that programming? Would you say it's still very favorably skewed toward you, or does it swing one way or the other?.

Yeah, Alexia, it's Sean. I'll answer the first one and maybe Josh on the second. So, in the fourth quarter, we had a mix.

Like I said, whether it's a domestic SVOD, whether it's international distribution or otherwise, we have a mix of shows across a number of the channels on AMC from the studio, Dirk Gently, Fear The Walking Dead, Hell on Wheels, Into The Badlands, The Walking Dead, TURN. So, we have other shows on IFC, et cetera.

So, it's really a mix across the channels that really drove and just the increased number of episodes and content across all the channels that really drove that non-affiliate revenue in the fourth quarter..

Right. On the second part, I would say the overall trend, we see video consumption demand for video, high-quality video is high, continues to be high in what we call ancillary, meaning, after a show has been on our platform about a year.

Those rights continue to be sought after on SVOD and international, overseas, whether it's on our channels, whether it's on channels we don't control or in markets where we're not distributed on SVOD, the major platforms. The appetite for high-quality content remains very, very strong..

Thank you very much..

Well, thank you, everyone, for joining us on today's call and for your interest in AMC Networks. Operator, you can now conclude the call..

Thank you. This does conclude today's conference call. You may now disconnect..