Starz CFO Talks Original Content Push, Deals
UPDATED: Asked if Starz was an acquisition target, Scott Macdonald said "the management team is focused on the long-term."
Starz will continue to offer a strong lineup of movies, while ramping up original programming to 65-75 hours a year in 2016/2017, CFO Scott Macdonald said at an investor conference on Wednesday.
Asked about continuing chatter that Starz could be an acquisition target, he said the executive team led by CEO Chris Albrecht is focused on running the business for the long-term. "The management team is focused on the long-term here," he said.
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Appearing at the Bank of America Merrill Lynch 2013 Leveraged Finance Conference in Boca Raton in a session that was webcast, Macdonald was asked about Starz's interest in international and a recent $1 billion AMC Networks deal for Liberty Global's European content arm Chellomedia. He said that deal would not have paid off for Starz, particularly at the price target it fetched. He cited Starz's still-developing original slate and a current lack of international rights to enough originals, but he said Starz continues to look at international as a growth opportunity.
Macdonald once again emphasized Wednesday the importance of originals, saying Starz would continue to ramp up its production of original shows. Right now, they make up only about 5 percent of the company's schedule, but they accounted for 49 of the 100 top programs on the Starz platform over the past year, he said.
He added that the firm sees no lack of quality shows being pitched to Starz or moving into development. He cited Albrecht's reputation with creatives given his past running HBO.
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"We will be cost effectively ramping up our originals over the coming years," Macdonald told the conference. From 36 hours in 2013 and 50 hours in 2014, original hours will rise to 65-75 in 2016/2017, the CFO said. Albrecht previously had mentioned a target of 75 hours per year within the coming years.
"We just really started out in this space," Macdonald explained in touting the potential upside, but also emphasized: "We are not going to abandon movies." Retaining strong first-run and older movies is a key part of the firm's strategy and important for its content mix, he said.
Outlining Starz's 2014 originals, he touted Michael Bay's Black Sails, which launches in January, the second season of Da Vinci's Demons, new shows Power and Outlander, which he said should bring in often under-served female premium TV viewers, and Fortitude.
Macdonald also showed a slide that cited 1.1 million average daily viewers for Starz and Encore, followed by HBO and Cinemax with 900,000 and Showtime with 200,000.
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