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Lionsgate on Thursday swung to a fiscal third-quarter loss on rising revenue, as the Hollywood studio drives into streaming saw its global subscriber base for Starz, Starzplay Arabia and Pantaya grow to 28.5 million, up from 27 million subscribers at the end of its second quarter.
Starzplay, Starz’s international streaming service, also said Thursday it has inked an output deal with Lionsgate for split theatrical streaming rights in the U.K. for the studio’s recently released and upcoming feature films. Under the multiyear agreement, Starzplay subscribers in the U.K. will get access to Lionsgate first-run movies, including Knives Out, Bombshell and Angel Has Fallen, among others, six months after the titles first debut on Amazon Prime Video in the U.K.
Lionsgate earlier unveiled an output deal with Amazon for the U.K., giving Amazon first window streaming rights in the U.K. for the studio’s recently released and upcoming theatrical films, starting on Jan. 1 on this year. The deals come as Amazon and Starzplay face new competition, with the recent global launch of Apple’s Apple TV+ streaming service and Disney’s Disney+.
Lionsgate reported adjusted earnings of 14 cents per share for the three months ending on Dec. 31, which fell short of a Wall Street estimate for 18 cents in per-share earnings during the latest quarter. The studio swung to a quarterly loss of $91.2 million, against a year-earlier profit of $23 million.
Third-quarter revenues came to $998.5 million, against a year-earlier $933 million. That represented a $77 million beat as analysts had projected quarterly revenues of $918.4 million.
The studio’s motion picture revenues were $473.9 million, up from $362.3 million a year ago, on strong box office from Knives Out and John Wick: Chapter 3 – Parabellum. Television production fell to $189.4 million, from $217 million in fiscal 2019.
During an analyst call, Lionsgate CEO Jon Feltheimer confirmed production starts set for John Wick 4 and a Knives Out sequel as he touted franchise potential for both properties.
The media networks segment, driven by Starz, reported revenue of $382.4 million, up 4.3 percent from $366.8 million.
The company said its Starz cable and streaming asset finished the quarter with 26.2 million subscribers, or 19.9 million linear subscribers and another 6.3 million OTT customers in both the domestic and international markets.
During the analyst call, Feltheimer also recalled Comcast NBCUniversal and Lionsgate recently agreeing to terms on a new carriage deal for Starz that includes continuing access of Starz networks on Xfinity TV and future carriage on Comcast’s Peacock streaming service.
“At Starz, beginning on the domestic front, we continued our transition in the quarter to an on demand environment that will ultimately result in higher ARPU linear subscribers and higher value over-the-top subscribers. We reached a multifaceted long-term agreement with Comcast that provides a revenue glide path into a new distribution arrangement, allows us to build an a la carte, revenue sharing business together and includes a content licensing deal with Peacock,” said the exec.
NBCUniversal will also license content to Starz for the U.S. market and on its international streaming service, Starzplay, now available in 49 countries.
Lionsgate also reported Thursday that Starzplay Arabia had another 1.7 million subscribers and Pantaya, the Spanish-language streaming platform, was at 600,000 customers at the end of the quarter. Global OTT subscribers for Lionsgate reached 8.6 million.
“Our Motion Picture Group turned in a strong performance in the quarter, led by the worldwide box office success of Knives Out, while our TelevisionGroup secured a number of important scripted series and pilot commitments and Starz continued to grow its over-the-top platform worldwide,” Feltheimer said earlier in a statement that accompanied his latest financial results.
“Our Starzplay international rollout remains on track to achieve financial and subscriber targets that we expect totranslate into meaningful incremental value creation,” the exec added. Lionsgate has projected the Starzplay international subscriber to grow to between 15 and 25 million over the next five years.
Shares of Lionsgate closed up 1 percent on Thursday at $10.08 on the New York Stock Exchange, and the stock rose 4 percent to $10.50 in early after-hours trading.
Feb. 6, 3 p.m. Updated with comments by CEO Jon Feltheimer made during an analyst call.
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