AMC, WE tv Ad Sales Up

Cablevision’s Rainbow Media unit enjoyed another strong quarter, boosting its advertising sales revenue by 13 percent versus the year-ago period.

The ad-supported cable nets AMC, WE tv and IFC in Q2 generated $228.2 million in overall net revenue, improving on last year’s $206.2 million by 11 percent. When Sundance Channel, the local News 12 operations and other Rainbow business are thrown into the mix, the unit took in a grand total of $291.4 million on the quarter, up 12 percent versus $260.1 million.

Operating income at the three core networks’ unit grew 4 percent to $82.3 million compared to the prior-year period.

Cablevision credited higher pricing at AMC and WE tv for the ad sales gains. AMC finished the quarter with 89.3 million subscribers, up 3 percent from Q3 2009, while WE tv closed out the period with 64 million subs, a gain of 3 percent. IFC reaches 51.1 million subs (up 3 percent), while Sundance Channel is now in some 39.1 million homes, boosting its reach by 15 percent.

AMC ranked 18th among ad-supported cable networks in Q3, averaging 1.16 million prime time viewers, a gain of 20 percent versus the year-ago period. Adults 25-54 accounted for 40 percent of the network’s nightly deliveries (460,000). WE tv averaged 282,000 viewers in prime (down 13 percent), of whom 109,000 were women 25-54, a decline of 11 percent from 122,000.

Cablevision’s core MSO business took in $1.37 billion in net revenue, up 5 percent from the year-ago $1.3 billion. Local ad sales rose 29 percent to $36 million; sequentially, the company’s sales were up 9 percent from $33 million in the second quarter of 2010. Local ad sales account for less than 2 percent of the company’s overall revenue haul.

The cable operator closed out the quarter with 3.04 million customers, adding 9,600 high-speed Internet subscribers and 9,300 voice subs compared to the second quarter of 2010. That said, Cablevision over the course of the three-month period lost 24,500 basic video subs.

Last week, Cablevision came to terms with News Corp., striking a new retransmission-consent pact after Fox local stations had been blacked out in its New York and Philadelphia systems for 15 days. While Cablevision chief operating officer Tom Rutledge would not reveal how many customers had canceled their subscriptions as a direct result of the standoff, he said that the losses were justified by the deal it ultimately reached with the broadcaster.

“Our behavior was not uneconomic,” Rutledge said. “We were doing a rational thing by not carrying the services at the prices that were being pushed on us.”

Rutledge echoed the company’s earlier sentiments, saying that the Federal Communications Commission should have stepped in to mediate the dispute. (The FCC has noted that it does not have the authority to intervene in such matters.)

“We think it’s necessary to fight for your customers,” Rutledge told investors, before acknowledging that the standoff was “a very unpleasant way of doing business.”

Thus far in this current earnings season, national ad sales results have been robust on all fronts. The Turner Broadcasting networks were up 10 percent versus the year-ago period, taking in $848 million in sales, while Discovery Communications boosted its sales by 16 percent to $304 million. News Corp. improved 16 percent across its cable properties, which include Fox News Channel, FX and National Geographic Channel.

Meanwhile, Crown Media’s Hallmark Channel finally stopped the bleeding, reversing a seven-quarter streak of year-over-year declines. Hallmark Channel and the spinoff Hallmark Movie Channel lifted their combined ad sales dollars 5 percent to $48.5 million, as clients were drawn to a new daytime lifestyle block anchored by The Martha Stewart Show.