AMC and FX Are Ditching Ads (for a Monthly Fee) to Take on HBO and Netflix

Buyers aren’t happy but admit the move makes sense in the long run

FX+ subscribers can watch American Horror Story: Cult without ads. Frank Ockenfels/FX
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As they try to keep pace with premium cable and streaming services like HBO and Netflix in the era of Peak TV, FX and AMC are bringing the battle to a new platform: one that does not contain advertising.

Both networks recently struck deals with Comcast to offer the company’s cable subscribers ad-free access to their programming, via on demand and streaming, for an additional monthly fee. AMC Premiere, which costs $4.99 per month, launched in late June, while FX+, which is $5.99 per month, rolled out on Sept. 5. (See sidebar to compare the two offerings.)

The ad-free option, said FX Networks CEO John Landgraf, helps put his network on “equal footing” with the likes of Netflix, HBO, Amazon and Showtime as they all vie to draw audiences to the medium’s most critically acclaimed shows. Comcast approached FX about the partnership, but the network had been discussing such an offering for “years,” said Landgraf.

While FX+ is only available to Comcast subscribers for now, “we’re going to roll it out to every MVPD customer in the United States as quickly as we can,” said Landgraf, who expects to announce more partners “soon.” But he stressed that the network remains committed to ad-supported content: “I want to be able to provide an ad-free option for consumers that want it, but that does not mean that we’re not working really, really hard to improve the ad experience” for the vast majority of FX subscribers who will continue to watch that way.

That sentiment was echoed by AMC Networks’ president of ad sales Scott Collins. “Our partners understand that AMC has to serve its passionate and ever-changing audiences in new ways on new platforms,” he said. “We’ve made it very clear to everyone that AMC Premiere is an upgrade option we think will appeal to some fans, but a core focus for us very much remains the AMC ad-supported linear and digital environments.”

Buyers aren’t happy about these platforms reducing the amount of viewers seeing their ads, but they admit it probably makes sense in the long run. “Obviously, the more ad-free options there are in the world, it limits the number of eyeballs we can reach with advertising, so that is a bit concerning,” said David Campanelli, svp, director of national broadcast for Horizon Media. “However, a TV network that is overall ad-supported strengthening its offering to the public and challenging something like Netflix is ultimately a good thing, if it helps keep AMC’s or FX’s business healthy in totality, and potentially helps support the linear side of things monetarily.”

For now, Campanelli sees the new platforms as similar to the ad-free tiers from Hulu and CBS All Access, which have shown that “there’s still a fairly limited number of people” willing to pay several more dollars each month to upgrade to programming without commercials. Comcast said early response to AMC Premiere has exceeded its expectations, but declined to give any specific numbers.

Because FX+ and AMC Premiere are targeting current cable subscribers, neither is a direct-to-consumer play—at least not yet. But as their rollout continues, and other networks also begin to experiment in this space, consumers will have to decide how many streaming services and ad-free upgrades they can afford. Said Landgraf, “I don’t think anybody knows for sure where this trend finally shakes out.”

This story first appeared in the Sept. 11, 2017, issue of Adweek magazine. Click here to subscribe.

@jasonlynch Jason Lynch is TV Editor at Adweek, overseeing trends, technology, personalities and programming across broadcast, cable and streaming video.