By Tim Baysinger and Jessica Toonkel
(Reuters) - AMC Networks Inc, whose shows include "The Walking Dead," is planning to launch a commercial-free online video streaming service aimed at millennial TV subscribers, two sources familiar with the situation told Reuters this week.
Unlike standalone streaming options from Time Warner’s HBO and from CBS Corp (NYSE:CBS), AMC's would be exclusively available to consumers who subscribe to a cable TV package. AMC is doing this, the sources said, as a way to support the traditional cable television industry at a time when many younger consumers are increasingly cutting the cord.
AMC is discussing featuring digital-only spinoff shows of its existing programs like "The Walking Dead" and is considering pricing between $4.99 to $6.99 a month, according to the sources, who cautioned final details are still being worked out.
The sources wished to remain anonymous because they are not permitted to speak to the media. An AMC spokesman declined to comment.
Packaging the service as an add-on to existing cable bills allows AMC to curry favor with cable and satellite companies.
"The Walking Dead," the highest-rated show among adults 18-49 for the past five years, has experienced audience erosion in its seventh season, with ratings down nearly 16 percent with two episodes left. Among viewers overall, this season has fallen 13 percent from last year.
AMC is still betting on its popularity with younger, tech-savvy viewers. The network currently has four of the top 10 highest rated shows with adults 25-54 in ad-supported cable, according to Nielsen.
As television networks struggle with declining advertising sales as more brands look to place ads online, selling a subscription-based offering could also be a way to recoup lost ad revenue. AMC will hold an event for advertisers next month during what is known as upfront season, when many U.S. media companies try to sell the bulk of their advertising inventory for the next year.
As viewers increasingly watch programming on their own time, live TV viewing have has declined across the entire TV ecosystem.
This wouldn’t be the first time that AMC offered a streaming-only option to consumers. The company has launched Shudder, aimed at horror fans, and one for its cable network Sundance. The company also has an online application where cable subscribers can view its network with commercials.