Lionsgate’s Silent Workhorse: Home Entertainment

NEWS ANALYSIS — To hear Lionsgate CEO Jon Feltheimer on the recent fiscal call, the studio/distributor is pushing aggressively into the over-the-top video market via Starz and positioning itself as a major supplier of original television content.

While the longtime executive gave a shoutout to home entertainment for generating a record $600 million in catalog revenue for the fiscal year ended March 31, Feltheimer didn’t elaborate further on DVD/Blu-ray Disc and digital movies’ outsized impact on the company’s motion picture segment revenue — other than to mention Lionsgate’s penchant for “creating and owning iconic IP with tremendous evergreen value.”

Indeed, Lionsgate sold about $257 million in packaged-media product in the fiscal year, down about $500,000 from 2019. Disc sales of major feature movies increased nearly 43% to $154.8 million from $108.4 million in the previous-year period.

Packaged media/digital movies represented 42.2% of the motion picture segment’s $1.67 billion revenue for the year — twice the percentage of theatrical, according to Lionsgate’s 10K fiscal filing released May 27.  The tally is up 14.1% from revenue of $1.46 billion in fiscal 2019. The motion picture group represented 43% of Lionsgate’s consolidated revenue for FY 2020.

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Lionsgate packaged-media releases are distributed in North America by Disney-owned 20th Century Fox Home Entertainment, and by Lionsgate U.K. internationally.

Lionsgate said it shipped 45 million combined DVD/Blu-ray Disc units in fiscal 2020, ranking sixth among all studios. In the 2019 calendar year, the studio held 9% market share in home entertainment, including a box office-to-home entertainment conversion rate 25% above the industry average.

Box office-to-home entertainment conversion rate is calculated as the ratio of the total of both first cycle DVD release revenue and total digital platform revenue for a theatrical release compared to the total North American revenue from such theatrical release.

Top-selling discs in the fiscal year included theatrical releases Cold Pursuit, Tyler Perry’s Madea Family Funeral, Rambo: Last Blood and Midway.

Lionsgate Home Entertainment Drives Record $600 million FY Catalog Revenue

Strong home entertainment sales of DVD, Blu-ray Disc and digital catalog titles helped Lionsgate report record $600 million in catalog revenue for the fiscal year ended March 31.

The studio also saw strong retail sales from new releases Midway and Knives Out, the No. 6 and No. 10 top-selling movies in 2020, respectively, according to the NPD Group’s VideoScan tracking service.

The motion picture segment reported $393 million in revenue in the fourth quarter, up nearly 10% from $358 million in revenue during the previous-year period. For the year, revenue topped $1.67 billion, a 14% increase from revenue of $1.46 billion in the previous fiscal-year period. Segment profit was $101 million.

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The only new theatrical release in the quarter, I Still Believe, was in theaters for only four days before exhibitors ceased operations due to the coronavirus. Lionsgate pivoted quickly to launch the title in the $19.99 premium video-on-demand window to mitigate lost theatrical revenue.

Television production segment revenue was $258 million and segment profit was $22 million driven in part by strong library sales.

“We reported a strong quarter to end a solid fiscal year despite the disruption posed by the COVID-19 global pandemic,” CEO Jon Feltheimer said in a statement.

‘Midway’ Wins Battle for Disc Sales

Lionsgate’s Midway debuted at No. 1 on the NPD VideoScan First Alert chart, which tracks combined DVD and Blu-ray Disc unit sales, and the dedicated Blu-ray Disc sales chart the week ended Feb. 22, one of four new releases to make the top 10.

Midway, which depicts the United States’ efforts in World War II against Japan from the Pearl Harbor attack in December 1941 through the Battle of Midway in June 1942, grossed $56.8 million at the domestic box office.

Another newcomer, Sony Pictures’ A Beautiful Day in the Neighborhood, landed at No. 2 on both charts, selling about half as many copies as Midway. A docudrama about a reporter interviewing children’s television icon Mr. Rogers, the film earned $61.6 million at U.S. theaters.

The previous week’s top seller, 20th Century Fox’s racing drama Ford v Ferrari, slid to No. 3 on both charts.

The newly released 21 Bridges, from Universal Pictures, debuted at No. 4 on the overall sales chart and No. 5 on the Blu-ray chart. The action-thriller, which stars Chadwick Boseman as a New York detective hunting a pair of cop killers, was produced by the Russo brothers of “Avengers” fame and  earned $28.5 million at the domestic box office.

Warner’s Joker, in its seventh week on shelves, was No. 5 on the overall sales chart and No. 6 on the Blu-ray chart.

The fourth newcomer in the top 10, Fox’s Jojo Rabbit, debuted at No. 6 overall and No. 4 on the Blu-ray chart. Written and directed by Taika Waititi, who won the Adapted Screenplay Oscar, the dark comedy tells the story of a boy growing up in Nazi Germany at the end of World War II. It earned $32.8 million at the American box office.

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Blu-ray Disc formats accounted for 62% of first-week unit sales of Midway, with the 4K Ultra HD Blu-ray comprising 17% of its total sales. Beautiful Day‘s total was 54% Blu-ray (8% UHD), while 21 Bridges had 52% of its total from Blu-ray, and Jojo Rabbit had 78% (18% UHD).

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On the Media Play News rental chart for the week ended Feb. 23, Midway took the top spot while 21 Bridges landed at No. 2.

Ford v Ferrari dropped to No. 3, with A Beautiful Day in the Neighborhood at No. 4, and Paramount’s Playing With Fire dropping three spots to No. 5.

Top 20 Sellers for Week Ended 2-22-20
Top 20 Rentals for Week Ended 2-23-20
Top 20 Selling Blu-ray Discs for Week Ended 2-22-20
Top 20 Blu-ray Market Share for Week Ended 2-22-20
Sales Report for Week Ended 2-22-20
Digital Sales Snapshot for Week Ended 2-24-20

 

‘Midway’ Flies to First on Redbox Charts

Lionsgate’s war drama Midway debuted in the No. 1 spot on Redbox’s kiosk disc rental and On Demand charts the week ended Feb. 23.

The Redbox disc rental chart tracks DVD and Blu-ray Disc rentals at the company’s more than 40,000 red kiosks. The Redbox On Demand chart tracks digital transactions, including both electronic sellthrough and streaming rentals.

Another newcomer, Universal Pictures’ 21 Bridges, bowed at No. 2 on the disc rental chart and No. 4 on the digital chart.

The previous week’s top title on both charts, Fox’s racing drama Ford v Ferrari dropped to No. 3 on Redbox’s kiosk disc rental and No. 2 on the On Demand chart.

Sony Pictures’ Mr. Rogers docudrama A Beautiful Day in the Neighborhood debuted at No. 4 on the disc chart and No. 3 on the digital chart.

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Paramount’s Playing With Fire, slipped to No. 5 on the kiosk chart and No. 6 on the On Demand chart.

The newly released Jojo Rabbit, also from 20th Century Fox Home Entertainment, was No. 6 on the disc chart and No. 5 on the digital chart.

Top DVD and Blu-ray Disc Rentals, Redbox Kiosks, Week Ended Feb. 23:

  1. Midway (2019) — Lionsgate
  2. 21 Bridges — Universal
  3. Ford v Ferrari — Fox
  4. A Beautiful Day in the Neighborhood — Sony Pictures
  5. Playing With Fire — Paramount
  6. Jojo Rabbit — Fox
  7. Joker — Warner
  8. Doctor Sleep — Warner
  9. Terminator: Dark Fate — Paramount
  10. Gemini Man — Paramount

 

Top Digital, Redbox On Demand, Week Ended Feb. 23:

  1. Midway (2019) — Lionsgate
  2. Ford v Ferrari — Fox
  3. A Beautiful Day in the Neighborhood — Sony Pictures
  4. 21 Bridges — Universal
  5. Jojo Rabbit — Fox
  6. Playing With Fire — Paramount
  7. Joker — Warner
  8. Parasite — Universal
  9. Zombieland: Double Tap — Sony Pictures
  10. Terminator: Dark Fate — Paramount

 

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Merchandising: The Battle for ‘Midway’ Exclusives

Target and Best Buy each offered an exclusive Steelbook edition of Lionsgate’s Midway Blu-ray release Feb. 18.

Best Buy, for which the Steelbook edition is the most typical exclusive, had the 4K Ultra HD Blu-ray version of Midway at $29.99.

Best Buy’s ‘Midway’ 4K Ultra HD Steelbook

Target’s Steelbook was for the regular Blu-ray edition of the war film, offered at $24.99.

Target’s ‘Midway’ Blu-ray Steelbook

Walmart also had an exclusive for Midway, though it was more low key, pairing the 4K Ultra HD Blu-ray combo pack at $24.96 with a special bonus digital copy of another World War II film, Emperor, redeemable through Vudu.

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For another WWII film released during the week, the news wasn’t so much about retailer promotions as it was which stores were even carrying it. The Oscar-winning Jojo Rabbit, from 20th Century Fox, wasn’t even stocked in a few Walmarts. And Target wasn’t offering the 4K Ultra HD version in stores. Copies of the film in all formats were still available on the chains’ websites.

Among other notable deals for the week, Target offered 20% off select Disney movies.

War Film ‘Midway’ Flies Home in February

Lionsgate will release director Roland Emmerich’s Midway through digital retailers Feb. 4, and on Blu-ray Disc, DVD and 4K Ultra HD Blu-ray Feb. 18.

The film details the 1942 Battle of Midway during World War II, a clash between the American fleet and the Imperial Japanese Navy which marked a pivotal turning point in the Pacific Theater.

The cast includes Ed Skrein, Patrick Wilson, Luke Evans, Aaron Eckhart, Nick Jonas, Darren Criss, Mandy Moore, Dennis Quaid and Woody Harrelson.

The film earned $56.5 million at the domestic box office.

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The disc and digital editions of the film will include an audio commentary by Emmerich, the film’s trailer, and the featurettes “Getting It Right: The Making of Midway” and “The Men of Midway.”

The Blu-ray versions will also include the featurettes “Roland Emmerich: Man on a Mission,” “Turning Point: The Legacy of Midway,” “Joe Rochefort: Breaking the Japanese Code” and “We Met at Midway: Two Survivors Remember.”

The 4K Ultra HD disc will include Dolby Vision and a Dolby Atmos soundtrack.

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