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Lionsgate swung to a first quarter loss for fiscal year 2022, as the studio’s Starz premium TV platform hit 16.7 million global streaming subscribers.
The latest financials from the Hollywood studio come as Lionsgate remains a persistent subject of M&A chatter as digital titans like Facebook, Apple and Amazon muscle into Hollywood. On the deal side, Lionsgate recently picked up a 20 percent stake in the Spyglass Media Group, while also nabbing around 200 titles, or most of the feature film library belonging to Spyglass.
On the company’s earnings call, CEO Jon Feltheimer touted the Spyglass deal, and the company’s strategic position in an M&A-heavy market.
“If the media consolidation of the past year has taught us anything, it’s that the global appetite for content is greater than ever,” Feltheimer said. “And to paraphrase Keanu Reeves in John Wick 3, we have that content, lots of content — in our world-class library, our deep film and television pipelines and throughout our global streaming platform at Starz. We live right in the sweet spot of global consumer demand — bold, original, high-end premium scripted television and film.”
Feltheimer also touted new licensing opportunities from ad-supported streaming services.
“The growth of the nearly $10 billion AVOD market has created opportunities for us to license existing television series, with AVOD revenues up 104 percent from last year, to sell original new television series, an area where we have always been a first mover, and to extend the revenue food chain for shows entering syndication,” he said. “In fact, AVOD accounted for nearly two-thirds of our recent syndication sales for the hit comedy Weeds.”
For the three months to June 30, Lionsgate recorded a quarterly loss attributable to shareholders at $45.4 million, compared with a year-earlier profit of $51.1 million.
For the first quarter, Lionsgate reported adjusted earnings of 18 cents per share, against a year-earlier profit of 23 cents per-share.
That beat a Wall Street estimate for 9 cents in an adjusted per-share profit for the latest financial quarter. Fourth-quarter revenue came to $901.2 million, compared with a year-earlier $813.7 million.
The studio’s media network revenue, which mostly comprises the Starz premium cable and streaming channel, came to $382.3 million, against a year-earlier $367.3 million. The total media networks global subscribers rose to 28.9 million year-over-year, with Starzplay International subscribers growing 106 percent year-over-year to 7 million.
The Motion Picture segment revenue were $291.2 million, compared with a year-earlier $280.7 million. And the TV production revenue was $386.1 million, well up from a year-earlier $195.7 million when Lionsgate’s TV division was impacted by the pandemic.
“I think there will be a strong, robust platform for us to monetize our movies in the theatrical market,” Feltheimer said during the call, when asked about the future of theatrical, while adding that “we have found this period of change as a place to seek opportunities.”
“When you look at the theatrical market, even though it is not all back, big brands are working,” he added. “I think we have a ways before we can talk about what a normalized box office looks like, when you think about the variants and such.”
Lionsgate is seeing the greatest growth for the Starz platform on the digital front as pay TV providers migrate to the online space.
“I’m pleased to report that we were able to lean into our resilient business model to drive strong financial results in the quarter. We filled our content pipelines with exciting new properties and added valuable new titles to our library,” Feltheimer said.
Feltheimer added: “Like the rest of the industry, Starz subscriber growth was impacted by the decline in at-home viewership and, importantly, a light content quarter due to COVID-driven production delays. However, the strong opening of Power Book III: Raising Kanan two weeks after the quarter ended sparked a return to strong global subscriber growth, which we expect to continue for the rest of the year.”
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