Lionsgate Motion Picture Segment Q1 Revenue Declines Due to Lack of High-Profile Home Entertainment Releases

Lionsgate Aug. 9 said its motion picture segment, which includes home entertainment, reported a 23% decline in first-quarter (ended June 30) revenue to $365.3 million from $472.4 million in the previous-year period.

Operating income fell 41% to $51.6 million compared to operating income of $86.9 million last year.

Specifically, motion picture packaged media revenue topped $76.5 million, down 43% from $132.5 million during the previous-year period. Digital media revenue fell 15% to $86.2 million from $101.5 million.

Packaged media sales of TV content topped $1.8 million, up 64% from $1.1 million last year. Digital sales plummeted 60% to $16.1 million from $41.6 million.

The studio attributed the decline in part to year-over-year home entertainment revenue from John Wick: Chapter 2 and the international revenue from Oscar winner La La Land.

Indeed, John Wick: Chapter Two generated $29.3 million on sales of 1.7 million combined DVD/Blu-ray Disc units in 2017, according to

Media networks segment revenue increased by 3% to $354.9 million due to solid OTT revenue growth. Segment profits were essentially flat from the prior year quarter due to costs associated with Starz’s international rollout and a moderate increase in domestic marketing spend. Domestic subscribers increased 300,000 sequentially in the quarter, reaching 23.8 million, with growth in both traditional MVPD and OTT subscribers.

Television production segment revenue increased by 7% to $279.4 million in the quarter as gains in domestic license fees and international revenue offset the comparison to a prior year quarter that included a digital media licensing agreement for the Starz original series Power. Segment profit decreased by 64% to $15.6 million in the fiscal quarter.

“Our global content machine is operating at full throttle, and we continue to invest in a programming and international rollout strategy at Starz that is working,” CEO Jon Feltheimer said in a statement. “Our initiatives in the quarter continued to strengthen Lionsgate’s stature as a unique and essential part of the media ecosystem.”

Lionsgate Ups Q3 Home Entertainment Revenue

Lionsgate Feb. 8 reported third-quarter (ended Dec. 31, 2017) home entertainment revenue of $216.7 million, which was up 12.7% from revenue of $192.2 million during the previous-year period.

Home entertainment includes Lionsgate’s legacy studio and former Starz Distribution (Anchor Bay Home Entertainment) business.

Specifically, the studio generated $185.3 million from the sale of movies, up 11% from $167 million during the previous-year period. Sales of TV content declined 13.3% to $20.2 million.

Top-selling 2017 packaged media release, John Wick: Chapter 2, generated $29.2 million on sales of 1.67 million combined DVD/Blu-ray Disc units, according to The– Data does not include 4K UHD Blu-ray and digital retail.

Media Networks reported revenue of $11.2 million, up from $1.9 million last year.

Overall, Media Networks revenue increased 6% to $382.9 million driven by higher over-the-top (OTT) revenue growth and revenue from worldwide digital media licensing arrangements, offset in part by subscriber losses at certain MVPD’s.

Theatrical revenue increased 14% to $539.1 million due to strong domestic box office of Wonder and continued international performance of La La Land and American Assassin. Segment profits of $54.3 million compared to $55.9 million in the prior year quarter.

Television production revenue of $227.3 million compared to $231.0 million in the prior-year quarter. Revenue was comparable to the prior year quarter as increased revenue from deliveries of television series were partially offset by a decrease in syndicated licensing revenue. Segment profits of $22.7 million compared to $27.5 million in the prior year quarter.

Lionsgate’s backlog – contracted future revenue on the licensing of film and television product not yet recorded – was $1.2 billion at Dec. 31, 2017.