Lionsgate Posts Quarterly, Fiscal-Year 2019 Losses

There might be a reason Lionsgate reportedly considered selling Starz to CBS for billions of dollars. The studio/distributor had a rough fiscal fourth quarter (ended March 31) and operating year 2019.

The Santa Monica, Calif.-based company posted a quarterly loss of $159.1 million compared to net income of $89.6 million during the previous-year period. Revenue fell nearly 13% to $913.7 million, compared with more than $1 billion in the year-ago period.

For the fiscal year, Lionsgate recorded a net loss of $284.2 million, compared with net income of $468.1 million in fiscal 2018.

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The motion picture segment saw revenue decrease 20% to $1.46 billion in the fiscal year, due primarily to a smaller film slate in fiscal 2018. Segment profit decreased 28% to $129 million.

The studio’s Robin Hood reboot, starring Jamie Foxx and Ben Mendelsohn, among others, misfired at the box office, generating just $30.8 million on a reported $100 million production budget. The title generated nearly $54 million internationally.

A more detailed look at home entertainment results is forthcoming pending release of the company’s 10K filing.

Regardless, CEO Jon Feltheimer tried to put a positive spin on the results.

“We’ve completed a very active and productive fiscal 2019 in which we set in place all the elements for strong growth and continued value creation in the year ahead,” Feltheimer said in a statement.

Meanwhile, Starz Networks — with 24.5 million pay-TV subscribers — generated operating profit of $108.6 million on revenue of $355 million. That compared to operating profit $114.7 million and revenue of $350.5 million in the previous-year period.

For the fiscal year, operating income reached $488 million on revenue of $1.44 billion. That compared to operating income of $468 million on revenue of $1.4 billion in 2018.

Starz’ much-hyped over-the-top streaming video service narrowed its operating loss to $1.8 million on revenue of $6 million. That compared to an operating loss of $7.7 million on revenue of $2.9 million in the previous-year period.

For the fiscal year, Stars OTT narrowed operating loss to $11.3 million from $38.9 million. Revenue increased to $18.1 million from $7.1 million in 2018.

“We’ve … refocused on extracting maximum value from our franchise properties and are capitalizing on an extraordinary opportunity to continue Starz’s global expansion and cement its stature as one of the leading international pure play subscription video-on-demand services,” Feltheimer said.

Lionsgate Gets Boost from ‘John Wick 3’; Reported CBS Interest in Starz

NEWS ANALYSIS — Lionsgate had a good weekend as it prepares to report fourth-quarter (ended March 31) fiscal results on May 23.

Shares rose nearly 15% May 17 after a media report surfaced that CBS two months ago offered Lionsgate $5 billion for Starz, the premium pay-TV platform that includes a branded subscription streaming video service with global appeal.

Lionsgate declined the bid for being too low (it wanted $5.5 billion), despite the fact the offer trumped the studio’s market capitalization.

Santa Monica, Calif.-based Lionsgate bought Starz for about $4.4 billion in 2016 – the transaction giving the studio/TV show creator viable over-the-top distribution (3 million+ subscribers), in addition to more than 25 million pay-TV subs.

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Starz is also available in Canada through Bell Media, the Middle East (Starz Play Arabia) as well as via Amazon Channels in the United Kingdom and Germany.

Then on May 19 it was reported that the third installment of Lionsgate’s antihero John Wick franchise had unseated Disney’s superhero blockbuster Avengers: Endgame at the weekend domestic box office with $57 million in ticket sales.

With another $92.2 million in international ticket sales, John Wick: Chapter 3 — Parabellum tracked more than $149 million in revenue.

The Keanu Reeves starrer as an ex-hitman relentlessly pursued by would-be evildoers, topped the 2014 original John Wick ($14.4 million) and sequel, John Wick: Chapter 2 at $30.4 million, according to Box Office Mojo.

The latest box office tally should prove fortuitous for home entertainment.

The first two installments generated almost $43 million in revenue from nearly 3 million combined DVD/Blu-ray Disc unit sales.

Indeed, John Wick: Chapter 2 was the 16th best-selling disc in 2017, according to The-Numbers.com.

 

 

Poll: 44% Say Netflix Vital Source of Video Content

While Disney rolls out its branded “Disney Plus” subscription streaming video service for investors, new data from Hub Research finds that 44% of consumers consider Netflix an important source of content.

The research firm’s “The Evolution of Video Branding” study found that the vast majority of respondents from a January poll of 1,692 consumers in the United States chose Netflix over other over-the-top video services for their video content.

Other entertainment sources include CBS (29%), ABC (28%), NBC (28%) and ESPN (24%).

Among younger respondents (16-34 years-old), 59% opted for Netflix, followed by Hulu (26%), ESPN (24%), HBO (17%) and Amazon Prime Video (17%). Among older respondents CBS ranked first with 41%, followed by ABC (37%), NBC (37%), Netflix (35%) and Fox (26%).

Notably, the report found that while respondents were familiar online TV services such as Hulu with Live TV, YouTube TV, DirecTV Now, Sling TV, and PlayStation Vue, 80% claimed they were unaware of what each platform’s value proposition was.

Indeed, among younger respondents, simply branding video content “original” was enough to make them consider streaming it. And 69% considered Netflix the best choice for original fare.

“It would be easy to explain Netflix’s strong position as a must-have TV source by citing the sheer variety of its content,” Peter Fondulas, principal at Hub and co-author of the study, said in a statement. “Then again, the same can be said of the variety of shows on broadcast networks. Whether it’s a function of a higher level of show quality or of strong branding — or both — Netflix has managed to set itself apart from networks that offer a similarly wide variety of genre choice.”

Susan Levison Named Head of WWE Studios

World Wrestling Entertainment (WWE) is doubling down on original content. The company has named longtime TV executive Susan Levison head of WWE Studios, reporting to WWE co-president Michelle Wilson.

Levison comes from CBS Television Studios, where she was SVP, alternative programming, responsible for all unscripted development and production across cable, streaming and digital platforms. While at CBS, she produced unscripted projects and series in a variety of genres.

Susan Levison

WWE Studios develops and produces scripted and non-scripted series, documentaries, animated programming and feature films, including just released Fighting with My Family, starring Dwayne Johnson.

The studio’s TV shows include “Total Divas” and “Total Bellas” on E!, “Miz & Mrs.” on USA Network, as well as documentaries in partnership with HBO and ESPN. Movie franchises include The Call and The Marine.

“WWE Studios is making a big push in global content across genres and platforms to reach new audiences, super-serve our passionate fans and further establish the WWE brand,” Wilson said in a statement.

Prior to CBS, Levison served as EVP, original programming & production at VH1, overseeing more than 350 hours of original programming and development annually. During that time, Levison ramped up their scripted efforts, developing the critically-acclaimed drama, “Hindsight.” She also launched “Love & Hip Hop: Hollywood,” which ranked as cable’s highest-rated new unscripted series of 2014, and the Nicole Richie soft-scripted series, “Candidly Nicole.”

Previously, Levison helped to launch FishBowl Worldwide Media, a startup production company, where she developed, sold and produced scripted and unscripted series for Bravo, Discovery, TruTV, Animal Planet, Fuse and VH1.

CEO: CBS May Put OTT Originals on Broadcast TV to Drive SVOD Traffic

For years Hollywood studios and producers put primetime TV shows on DVD to jumpstart consumer interest in a show’s upcoming fall season launch or syndication availability.

Now, CBS is considering bowing past seasons of original over-the-top video programs from the CBS All Access platform on broadcast television to help drive consumer interest in subscription streaming video.

All Access and Showtime OTT, which finished 2018 with more than 8 million combined subscribers, are projected to reach 25 million combined subs by 2022.

Speaking on the Feb. 14 fiscal call, acting CEO Joe Ianniello said the concept has become reality to media companies producing and distributing original content in the digital age.

“The great part of owning the intellectual property is you have [distribution] choices,” Ianniello said.

He said the traditional business model releasing an older TV show into syndication was to monetize catalog programming, increase consumer awareness of the program (if still airing on primetime) and the broadcast network in general.

Specifically, CBS management is considering broadcasting the original season of “The Good Fight,” the CBS All Access exclusive spin-off of “The Good Wife,” which ended its primetime broadcast run in 2016, on primetime.

“What if … we put it on the CBS broadcast network to drive subscribers back to CBS All Access?” said Ianniello, adding that SVOD original programming has to have mass appeal to work on the broadcast network.”

“The promotional platform that the TV network has is bigger than the streaming platform and/or other cable networks,” he said.

Separately, Ianniello said that unlike other media companies pulling original programs from SVOD services such as Netflix, CBS would continue to shop content to the best distribution channel.

As a result, Get Out director Jordan Peele’s reboot of “The Twilight Zone” for All Access in the United States will be distributed by Netflix internationally.

“If a third-party is better able to monetize it than our infrastructure, we should take the excess value we’ve receive and redeploy it into making more content,” Ianniello said.

Regardless, the executive said putting online original programming on broadcast TV could reduce content development costs and make more efficient use of intellectual property and CBS franchise brands.

“We’re discussing it as we speak,” Ianniello said.

 

 

 

Joseph Ianniello Acting CEO at CBS Following Moonves Exit, Settlement with National Amusements

Joseph Ianniello, current COO at CBS Corp., is now acting CEO following the Sept. 9 departure of beleaguered boss Les Moonves in the aftermath of additional accusations of inappropriate behavior in the workplace. Moonves had been the head of CBS for 24 years.

Ianniello, who joined CBS in 2005, has been COO since June 2013. The chairman position will remain open pending the appointment of a permanent CEO.

Moonves and CBS will donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace. The donation, which will be made immediately, has been deducted from any severance benefits that may be due Moonves following the board of directors’ ongoing independent investigation.

Moonves will not receive any severance benefits (rumored to be around $120 million) at this time (other than certain fully accrued and vested compensation and benefits); any payments to be made in the future will depend upon the results of the independent investigation and subsequent board evaluation.

Moonves’ high-profile exit was in part triggered by a follow-up story in The New Yorker by Ronan Farrow that detailed additional accusations from six women alleging sexual misconduct by Moonves over a 20-year period.

In a statement late Sunday night, Moonves said “untrue allegations from decades ago” are not consistent with “who I am.” Moonves said he was “deeply saddened” to be leaving the company and wished nothing but the best for the organization.

CBS also announced a settlement with corporate parent National Amusements (and Viacom), which includes dismissing their pending litigation and previous corporate bylaw amendments.

In addition, five current independent directors and one National Amusements-affiliated director have stepped down from the board, and six new independent directors have been elected. The new board will be comprised of 11 independent directors and 2 NAI-affiliated directors.

First Season of ‘Star Trek: Discovery’ Coming to Blu-ray and DVD Nov. 13

A panel for the CBS All Access series “Star Trek: Discovery” held Aug. 5 at the Star Trek Las Vegas convention included the announcement that the first season of the show will arrive on Blu-ray Disc and DVD Nov. 13 from Paramount Home Media Distribution and CBS Home Entertainment.

The discs will include all 15 episodes from the first season, plus two hours of extras, including deleted and extended scenes, featurettes, and interviews with the show’s cast and creators.

The series, a prequel to the original 1960s “Star Trek” series set 10 years before the days of Capt. Kirk, debuted on the CBS All Access streaming service Sept. 24, 2017. A second season is slated to debut in 2019.

The show stars Sonequa Martin-Green as a Starfleet officer seeking redemption after she is blamed for igniting a war between the Federation and the Klingons. The cast also includes Doug Jones, Anthony Rapp, Mary Wiseman, Jason Isaacs and Michelle Yeoh.

Amazon’s preorder link for the discs offers the Blu-ray at $50.99 and the DVD for $41.99.

CBS: All Access and Showtime OTT Expected to Top Combined 8 Million Subs Earlier Than Expected

CBS Corp. Aug. 2 announced that it expects over-the-top video platforms, CBS All Access and Showtime OTT, to reach a combined 8 million subscribers by 2019 – a year earlier than the previous 2020 projection.

The $5.99 and $10.99, respectively, priced services are projected to reach 16 million combined domestic subscribers by 2022 — excluding international subs.

“[They] are surpassing our expectations,” CEO Les Moonves said on the fiscal call. He said All Access is having success in Canada — the platform’s first international launch, with plans to bow service in Australia next.

“We’ll be entering territories where our content is already in great demand, and where our OTT platforms are getting huge traction, particularly among younger viewers,” Moonves said.

When asked about Amazon Channels’ impact on subscriber growth for All Access and Showtime OTT, Moonves said the commerce giant has been “absolutely amazing” helping grow subs.

“They’ve been at the top of the list. We get more [subs] from them than any of our partners,” he said. “We like what they do.”

Moonves said he could see five original shows launching on each platform network over the next couple of years.

“[They] certainly proven themselves, making a lot of hits,” he said. “We’re really pleased with their hunger to do more. More new shows means more new subs.”

The CEO, who is under internal investigation for inappropriate behavior in the workplace following an expose in The New Yorker, declined comment on the situation.

CBS said it continues to grow in content licensing, development and distribution to a host of third-party distributors such as Apple, Netflix, and TBS.

Indeed, content licensing and distribution second-quarter (ended June 30) revenue increased 3.7% to $1.09 billion from $1.05 billion in the previous-year period. Original content production was up 10% from the previous-year period.

 

CBS Studios International Signs Parrot Analytics for Audience Measurement

Data tracking firm Parrot Analytics has signed a subscription agreement to provide global audience demand data on specific content to CBS Studios International.

Parrot Analytics CEO Wared Seger

“We’re thrilled to welcome the forward-thinking team at CBS Studios International to our family of thought-leading partners around the world” said Wared Seger, CEO of Parrot Analytics. “Today’s fragmented media landscape presents a challenge for studios, networks and OTT platforms in understanding the relationship between audiences and content.

Parrot Analytics has developed the world’s only global cross-platform, country-specific audience demand measurement system. Parrot Analytics captures a wide spectrum of actual audience behavior including video streaming consumption, social media, blogging platforms, file-sharing and peer-to-peer consumption spanning more than 100 countries. This provides some insight into demand for content across all content distribution platforms in all markets around the world.

“For global teams like CBS Studios International, it is even more critical that cross-platform content benchmarking is readily available for the team to drive critical distribution plans,” Seger said. “While the world is becoming more global, local market nuances are more important than ever in the world of content; making a global measurement system all the more critical. From leveraging our global cross-platform measurement system to breaking new ground with our Content Genome/Exposome project, we look forward to working with CBS Studios International teams around the globe to maximize the value of their content, fuel their strategic growth plans and further stand out in a crowded marketplace.”

CBS Studios International licenses programming to more than 200 markets in more than 60 languages across multiple media platforms. The division distributes programming from CBS Television Studios created for the CBS Television Network, The CW, CBS All Access and other platforms, as well as content from CBS Television Distribution, Showtime Networks, CBS News, CBS Films and a library of more than 70,000 hours of programming.

“As global media consumption evolves, it’s important to use advanced analytics to better understand how audiences are reacting to our programming,” said Barry Chamberlain, president of sales at CBS Studios International. “We look forward to utilizing Parrot’s detailed insights and analysis for our international team and clients.”

Analyst: Amazon Should Buy CBS to Compete Against Netflix

Despite spending billions on original content, Amazon Prime Video (100+ million) still lags behind Netflix (125 million) in subscribers and content cachet, according to analyst firm MoffettNathanson.

Solution: Acquire CBS Corporation, the media giant headed by Les Moonves with $21 billion market capitalization, major TV network, original online content production (“Star Trek : Discover” and “The Good Fight”) and burgeoning OTT video platform, CBS All Access.

“Rather than build it out over time, we wonder if Amazon would embrace a ‘buy it’ model and seek to acquire a traditional media company with content creation skills, deep proprietary content libraries, sports production capabilities, and burgeoning OTT ambitions,” Michael Nathanson said in a note. “Of all the companies available, CBS is the most logical fit.”

With a market cap above $820 billion, Amazon would appear to  be able to afford CBS — even in the hyper media M&A market that saw AT&T acquire Time Warner for $85 billion, and Disney offer more than $70 billion for 20thCentury Fox Film.

CBS, of course, is in the corporate crosshairs of parent National Amusements, which also is majority owner of Viacom (Paramount Pictures, BET, Nickelodeon, MTV, etc.). Spearheaded by Shari Redstone, National Amusements wants to re-combine CBS and Viacom — despite the former’s lukewarm interest.

CBS has an October 3 court date to determine whether it has the legal authority to undermine National Amusements’ voting power on the board of directors.

“If CBS is given their freedom from NAI’s control (which we doubt), we believe that an M&A premium would quickly emerge,” Nathanson said.