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Lionsgate has swung to a first quarter profit for fiscal year 2021, as the studio’s Starz premium TV platform hit 11.4 million global streaming subscribers.
For the three months to June 30, Lionsgate swung to a quarterly profit attributable to shareholders at $51.1 million, against a year-earlier loss of $54 million.
The COVID-19 crisis started near the end of Lionsgate’s fiscal fourth quarter, so the latest first quarter earnings represent the first snapshot of the full impact on the Hollywood studio from the coronavirus pandemic.
For the first quarter, Lionsgate reported earnings of 23 cents per share, against a year-earlier loss of 25 cents per-share. That beat a Wall Street estimate for 2 cents in a per-share profit. The adjusted earnings of 39 cents per-share beat an analyst consensus of 21 cents.
Fourth-quarter revenue came to $813.7 million, compared with a year-earlier $963.3 million, which beat an analyst estimate of $770.3 million in overall revenue for the latest quarter.
The studio’s media network revenue, which mostly comprises the Starz premium cable and streaming channel, came to $367.3 million, against a year-earlier $372 million. Starz reported domestic over-the-top subscribers at 7.4 million at the end of the first quarter, up from 6.8 million last quarter.
Lionsgate predicted it will get to between 13 million and 15 million OTT subscribers globally for Starz by the end of fiscal 2021 as the greatest growth for the platform is on the digital front as pay TV providers migrate to the online space.
“Our programming at Starz is working. The identity of the Starz brand is resonating. The growth of its domestic over the top business is robust. Its international platform is successfully differentiating itself at a critical inflection point in the marketplace. And the proposition that bringing Lionsgate and Starz together allows us to accelerate the growth of our direct-to-consumer offering by using the full portfolio of our resources is fulfilling its promise,” Lionsgate CEO Jon Feltheimer told analysts during a conference call.
Lionsgate reported 11.4 million global streaming subscribers for Starz, and in all 25 million overall subscribers for the premium platform at the end of the latest quarter. Starz is currently in 50 countries as it continues a global expansion.
The motion picture segment revenue was $280.7 million, compared to a year-ago $397.8 million due to fewer theatrical releases amid movie theater closures during the pandemic.
The studio on the analyst call confirmed that a John Wick 5 sequel was in the works, and that John Wick 4 is slated to hit theaters on the Memorial Day weekend in 2022. “We hope to shoot both John Wick 4 & 5 back to back when Keanu (Reeves) becomes available early next year,” Feltheimer announced.
Feltheimer added Jennifer Grey will both executive produce and star in a new Dirty Dancing movie for Lionsgate from Warm Bodies director Jonathan Levine.
TV production revenue fell 30 percent to $195.7 million, due mainly to the timing of series as pandemic-era production shutdowns impacted the TV division. Library revenue was a record $219 million, driven by strong demand for content and the syndication of Mad Men in the quarter.
“We entered a lucrative, multifaceted syndication deal for Mad Men with Amazon Prime internationally, Amazon’s IMDb TV domestically, AMC, and STARZPLAY. We’re readying our next big property Weeds for syndication in the fall. And on the heels of last year’s record revenue, our library continued its outsized performance in the quarter as we continue to capitalize on demand for content,” Feltheimer told analysts.
Lionsgate also discussed having its horror pic Antebellum bypass a theatrical debut in the U.S. and head straight for premium VOD amid the ongoing novel coronavirus pandemic. “From a movie-meeting-cultural moment, there’s no better time for it to reach its audience, which factored into our decision a bit,” Joe Drake, Lionsgate Motion Picture Group chairman, told analysts.
Lionsgate announced Thursday that the horror film, starring Janelle Monáe, will debut on PVOD on Sept. 18. In some select overseas markets, the movie will play in cinemas. “The economics look really strong. It allows us to still speak to the consumer directly, and yet the downstream appetite in pay and beyond is strong. It’s a really strong model for us,” Drake added.
He argued Lionsgate remained committed to the theatrical release model post-pandemic. “As that business opens up, we’ll be ready to exploit it aggressively. And yet you have seen in this moment new opportunities to be created,” Drake said.
Antebellum will be priced at $19.99 in the PVOD window, with no theatrical play for the horror pic yet planned. Moving Antebellum straight to homes follows Lionsgate during the pandemic launching the I Still Believe and The Secret movie titles in PVOD.
Drake also touted the landmark PVOD deal between AMC Theatres and Universal Pictures, which reduces the theatrical window to 17 days in return for revenue sharing. “There’s some things to really like about that deal. It treats all the parties as partners in the theatrical and PVOD space. It’s trying to create a partnership model where everyone wins,” he told analysts.
3:30 p.m. Updated with comments by Lionsgate execs made during an analyst call.
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