Lionsgate Mulls Starz Spin-Off as Unit Adds 1.3 Million Q2 SVOD Subs, Tops 18 Million Worldwide

Starz, the multiplatform distribution network owned and operated by Lionsgate, Nov. 4 reported an increase of 1.3 million subscribers in the second quarter (ended Sept. 3). The increase brings the global sub count to 18 million across Starz’ multiple branded streaming platforms, including StarzPlay Arabia, a non-consolidated equity method investee. StarzPlay International subs grew 97% year-over-year to 7.5 million across 60 countries.

The sub increases come as Lionsgate announced it would entertain spinning off the SVOD unit as a standalone publicly held company. Starz is currently headed by Jeffrey Hirsch.

“On Nov. 2, the company’s board authorized the management’s team to explore potential capital markets alternatives for its media networks business (Starz) including, but not limited to, a full or partial spin-off, split-off, issuance of a tracking stock or other transactions,” Lionsgate said in a regulatory filing.

Lionsgate acquired Starz in 2016 for $4.4 billion. Since that time, the company has transitioned the brand from pay-TV to over-the-top video, with additional platform launches overseas. At the same time, Lionsgate management feels Starz has not been properly valued by the market.

“The world has certainly changed because you have enormous competition and a lot of streamers around the globe,” Michael Burns, vice chairman of the board, said on the call. “But we think we’re very well positioned in that world.”

Overall, Lionsgate’s media networks unit totaled 30 million subs (including pay-TV), with segment revenue of $384.7 million, par with the previous-year period. Operating profit decreased to $5.5 million, driven by higher programming and content spend and marketing costs.

“Starz drove growth … with the strong premieres of three new series in the quarter,” CEO Jon Feltheimer said in a statement.

The media networks segment includes the domestic distribution of Starz branded premium subscription video services through OTT platforms and distributors and on a direct-to-consumer basis through the Starz App.

It also includes StarzPlay International, which represents revenue primarily from the OTT distribution of the company’s branded subscription video services outside of the United States.

Through March 31, media networks also included other streaming services, which represented primarily formerly owned Spanish language streaming service Pantaya. Lionsgate sold its interest in Pantaya earlier this year.

Lionsgate Selling Stake in Pantaya Spanish-Language SVOD

Lionsgate is selling its 75% stake in Spanish-language subscription streaming VOD platform Pantaya to joint-venture partner Hemisphere Media Group for $124 million.

Lionsgate and Hemisphere, the latter targeting the U.S. Hispanic and Latin American markets with broadcast, cable television and digital content platforms, launched Pantaya in 2017 as the first Spanish-language over-the-top video service in the U.S. The $5.99 monthly platform ended the most-recent fiscal period with 900,000 subscribers. Hemisphere estimates the sub base will grow to 2.5-3 million by the end of 2025.

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“We’re very proud to have helped build Pantaya into the leading premium Spanish-language platform in the U.S., and Hemisphere is the right owner to continue their growth and success,” Lionsgate COO Brian Goldsmith said in a statement. “We look forward to an even more robust strategic content relationship among Lionsgate, Starzplay and Pantaya that benefits Pantaya’s continued ascendancy.”

Pantaya CEO Paul Presburger, who remains in charge of the service, said the platform increased its subscription base by 40% in 2020.

“We believe we have significant runway for additional expansion ahead,” he said.

With its Starz brand, including SVOD versions in internationally such as Starzplay and Lionsgate Play, Lionsgate is looking to focus streaming resources and investment internally. The studio/distributor will continue with a broad strategic content relationship between Starzplay, Hemisphere and Pantaya going forward, according to company officials.

StarzPlay Starts Production on First Series Filmed in Spain

StarzPlay March 16 announced the start of production on “Express,” the streamer’s first international original series to be filmed and produced in Spain. The action thriller will be available through the platform’s service in Spain and Latin America, and in the United States on Pantaya, Lionsgate’s Spanish-language SVOD.

Produced by The MediaPro Studio, the eight-episode, one-hour series is scheduled to shoot for 17 weeks on location in and around the city of Madrid.

“Express” is the first local production from StarzPlay, which is creating international originals through co-production opportunities to further curate its content offering for subscribers.

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“Express” tells the story of a criminal psychologist, Bárbara (Maggie Civantos), and her family after she becomes the victim of one of the newest, virally spreading forms of violent crime…express kidnappings.

Other cast members include Goya award-nominated Kiti Mánver (“El Inconveniente,” “Women on the Verge of  a Nervous Breakdown”), Vicente Romero (“Malaka,” “Cell 211”) Loreto Mauleón (“Patria”), Esteban Meloni (“Los Internacionales,” “Vidas robadas”), Alba Planas (“SKAM”), Ana Marzoa (“Locked Up,” “Lifeline”), Omar Banana (“Veneno”, “Amor superdotado”), Bernardo Flores (“Women in Charge”) and the young actresses Carmen Daza and Manuela Rojas.

The MediaPro Studio Distribution will manage the series’ international sales.

Spanish-Language SVOD Service Pantaya Bows New Original Series ‘La Negociadora’

Spanish-language subscription streaming video service Pantaya, a Lionsgate and Hemisphere Media Group joint venture, Feb. 2 announced the new original series “La Negociadora,” starring Barbara Mori (Rubi, Dos lunas).

Pantaya will premiere the first three episodes in the United States. and Puerto Rico on Feb. 11, followed by three new episodes every Thursday. The whole series will be available to binge on March 4. Claro Video will premiere the series in Latin America simultaneously.

Eugenia Velazco (Mori) is a renowned criminal attorney who is about to face her most challenging case when her past comes back to haunt her and a terrorist group takes siege of the city by planting a series of bombs and keeping dozens of hostages.

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“We are thrilled to team up again with Pantaya and Claro Video to bring a must-watch premium series to [consumer] homes,” executive producer Manolo Cardona of 11:11 Films & TV said in a statement. “We believe ‘La Negociadora’ will achieve a milestone in the genre for its great production, direction, performances, photography, script and staging.”

Lionsgate co-launched $5.99 monthly Pantaya in 2017 as the first Spanish-language over-the-top video service targeting the Hispanic community in the United States.

“La Negociadora” marks the television return of Mori after a five-year absence. The series also stars Diego Cadavid (Nicky Jam: El Ganador), Carlos Aragon (Cuna de Lobos), Ximena Ayala (Doña Flor y sus dos maridos, Capadocia), Adrian Ladron (La 4ta Compañía), Karina Gidi (Los Adioses), Horacio Garcia Rojas (Diablero), Marcela Guirado (Todo Mal, Silvana Sin Lana), Aldo Gallardo (Los Miserables, La Patrona), Albi de Abreu (Por amar sin ley, Luis Miguel: La Serie), Ivan Lopez (Amor en custodia) and Marco Treviño (Malos Habitos).

The 12-episode original series is directed by Juancho Cardona and David Ruiz. It is written by Raúl Prieto, Rosa Clemente, Connie Acosta and Leo Felipe Campos and produced by 11:11 Films & TV and Star Contents.

Lionsgate Eyeing Consumer-Direct Movie Option While Pledging Loyalty to Theatrical

With studios increasing distribution of select titles direct to consumers in the home while theaters remain largely shuttered worldwide, Lionsgate has dabbled in the PVOD window, releasing I Still Believe to consumers just weeks after its March 12 theatrical debut.

On a May 21 fiscal call, Joe Drake, chairman of the Lionsgate Motion Picture Group, was asked if the studio would consider distributing titles directly rather than through third-party platforms such as iTunes, Google Play, Vudu and Amazon, among others.

Drake, who said Lionsgate remains bullish on the theatrical business model, said the D2C concept, like a lot of the distribution status-quo during the COVID-19 pandemic, is being analyzed and tweaked, while remaining in solidarity with the theatrical window.

“One of the things [Lionsgate] prides itself on is being flexible and agile,” Drake said. “We still believe theatrical is a big driver of our business, and will continue to play aggressively in that space.”

Lionsgate’s first theatrical release is slated for Aug. 21 with horror film Antebellum.

At the same time, the executive said that when the studio sees an opportunity for distributing a movie direct to the consumer, it won’t hesitate. Drake didn’t directly answer whether that would include bypassing existing transactional VOD platforms in favor of Starz or another proprietary platform.

Lionsgate currently releases about 30 movies a year through digital channels, a strategy Drake said the studio would expand, but not at the expense of exhibition partners.

“I don’t think any company has done a better job exploiting niches and opportunities with audiences, and we’ll continue to do that,” he said.

Separately, Lionsgate said it is actively working with credit card companies such as American Express to include free Starz OTT service as part of a promotion. The studio/distributor currently has a Redbox promotion by which new Starz subscribers get nine free one-day kiosk disc rentals at a $5 monthly fee for 90 days.

“We think some of [those] consumer bases [with Redbox] overlap. We think there’s a great partnership there. We’ll continue to talk to almost anybody,” said Kevin Beggs, chairman of Lionsgate Television Group.

Lionsgate expects to generate upwards of 15 million combined Starz OTT, StarzPlay, Spanish-language Pantaya and StarzArabia subscribers by the end of the fiscal year. It ended the quarter with 10 million.

Lionsgate Spanish-Language SVOD Service Bowing First Original Program

Lionsgate Feb. 21 announced that its Spanish-language streaming video service Pantaya is set to launch its first-ever original scripted series, “El Juego de las Llaves” (“The Game of Keys”) this fall.

Production with Hemisphere Media Group is already underway in Mexico City on the 10-episode comedy, which will debut in the U.S. on Pantaya and internationally in more than 200 countries on Amazon Prime Video.

“El Juego de las Llaves” is a comedy about long-term monogamy, self-realization and desire. The series follows four long-lasting couples who are friends that decide to swing. In the comedic aftermath, each character must face the impact of the decision they have made on their relationship and personal outlook on sexuality.

The cast includes Maite Perroni (“Cuidado Con El Angel,” “Rebelde”), Humberto Busto (“El Chapo, Oso Polar), Marimar Vega (La Boda de ValentinaAmor de mis Amores), Sebastián Zurita (Ciudadano Buelna, Cómo cortar a tu Patán), Horacio Pancheri (Un Camino Hacia el Destino), Fabiola Campomanes (“Teresa,” “Mi Corazon Es Tuyo”), Hugo Catalan (“Falsa Identidad”), and Ela Velden (“Caer en Tentación,” “Despertar Contigo”).

“When we approached Corazón Films, which has been a distribution partner on Lionsgate films in Mexico, we knew we wanted to do something premium, original and enticing that viewers wouldn’t get anywhere else,” Paul Presburger, CEO of Pantaya, said in a statement.

 “We anticipate ‘El Juego de las Llaves’ to be appointment-viewing for our core audience in the U.S., and is unlike anything seen in the space before,” said Mario Almeida, VP of development, programming, and acquisitions at Pantaya.