November 7, 2019
Lionsgate-owned Starz saw its domestic OTT service add a record 1.2 million subscribers in the second quarter (ended Sept. 30), to end the period with 5.6 million subs, its best sequential growth quarter ever. The service is targeting 6 million subs by the end of the fiscal year.
Starz ended the quarter with 27 million total global pay-tv subscribers, up 1.8 million from the prior year quarter, and 24.7 million total domestic subs — down about 400,000 subs from the prior-year quarter.
The pay-TV tally is under threat from ongoing carriage issues with Comcast Cable, which accounts for about a third of Starz’ subs. Comcast has threatened to replace Starz with Epix unless it can negotiate more favorable terms.
Regardless, CEO Jon Feltheimer said Starz Play (available outside the U.S. only) remains on target to reach 4 million international subscribers in fiscal 2020 — due in part to now being operational in five countries.
“Even as our industry is undergoing the most disruptive secular change in its history, all of our core businesses have staked out strong, sustainable and unique positions within the ecosystem and are performing very well,” Feltheimer said in a statement.
The media networks segment revenue was relatively flat from the prior year quarter at $374 million, while segment profit declined 14.8% to $104.6 million driven by investment in the expansion of subscription streaming serviced Starz Play International. The service added about 200,000 subs in the quarter.
Motion picture segment revenue increased 7.1% to $405.8 million and segment profit increased nearly 300% to $51 million from the prior-year quarter reflecting the strong theatrical performances of Scary Stories to Tell in the Dark, Angel Has Fallen and Rambo: Last Blood, as well as the continued outsized ancillary performance of John Wick: Chapter 3 — Parabellum.
Television production segment revenue of $274 million was up 80.1% from the prior-year quarter, while segment profit increased 34% to $12.6 million due to an increase in revenue from television episodes delivered.