Lionsgate Q3 Home Entertainment Revenue Falls, Starz CEO Chris Albrecht Departs

Lionsgate Feb. 7 reported third-quarter (ended Dec. 31, 2018) home entertainment revenue from movies of $149.7 million, down 31% from revenue of $189 million during the previous-year period. Through nine months of the fiscal year, movie revenue fell 22% to $462 million compared to $588.6 million last year.

Sales of DVD and Blu-ray Disc movies fell 35% to $68 million from $104 million, while digital sales dipped about 4% to $81.7 million from $85 million.

Through nine months, packaged media movie revenue is down 33% to $209 million from $311.5 million last year. Digital sales are down less 9% at $253 million from $277.1 million.

Sales of TV shows on disc reached $2.5 million, compared to $4.1 million during the previous-year period. Digital sales reached $10.9 million, down 58% from $25.7 million last year.

Motion Picture segment revenue reached $362.6 million. Segment profit decreased 19.9% to $43.5 million, reflecting underperformance of certain titles in fiscal 2019 compared to the outperformance of Wonder in the prior year quarter.

Media Networks segment revenue increased to $366.8 million due to strong OTT (i.e. Starz) subscriber growth. Segment profit increased 9.6% to $134.1 million from the prior-year quarter. Overall domestic subscribers were sequentially consistent in the quarter at 25.1 million and up 1.1 million year over year.

Starz had a strong revenue and subscriber quarter, ending the quarter with 25.1 million overall domestic subscribers, which was consistent sequentially and up 1.1 million subscribers from the prior year quarter.  Starz achieved strong over-the-top (OTT) subscriber growth for the sequential quarter as well as year-over-year.

“We’re pleased to report a strong quarter with significant free cash flow and continued revenue and subscriber growth at Starz,” CEO Jon Feltheimer said in a statement.  “As we refill our feature film and television pipelines at a robust pace and take our integration of Lionsgate and Starz to the next level, all signs are pointing to strong growth in the year ahead.”

Feltheimer gave a shoutout to departing Starz CEO Chris Albrecht, who helped transition the pay-TV and OTT platform following Lionsgate’s $4.4 billion acquisition in December 2016.

“[Chris transformed] Starz from a legacy media network to a forward-looking streaming platform,” Feltheimer said on the fiscal call.  “He worked closely with me to position Starz for the next phase of its growth and he leaves behind a strong programming slate and a talented leadership team. I’m confident we will maintain our momentum without missing a beat.”

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