Cinedigm Ups Q3 Streaming Revenue, Fiscal Loss

Strategic investments in over-the-top video continue to positively impact Cinedigm’s fiscal bottom line. Streaming channel revenue increased 85% in the third quarter (ended Dec. 31, 2020) versus the prior year quarter. Ad-supported streaming channel revenue increased 79% sequentially over the second quarter and 150% over the prior-year quarter. Digital content licensing and sales increased 34% year-over-year, driven by third-party partners such as Amazon. Combined OTT video streaming and digital revenue increased 58% versus prior year quarter and 36% sequentially over the prior quarter.

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Total streaming minutes in the quarter were 907 million, a new company record, up 391% versus the prior-year quarter. Total monthly ad-supported streaming channel viewers rose to 22.6 million, up 303% over the prior-year quarter.

“As demonstrated by the fantastic organic growth results we have achieved this year, our platform and technology give Cinedigm a clear competitive advantage in launching, operating and scaling streaming services profitably and efficiently,” Erick Opeka, chief strategy officer and president of Cinedigm Networks, said in a statement. “Tens of millions of consumers around the globe are shifting their entertainment spend from cable to streaming. Amidst this perfect storm, we have a clear opportunity to leverage our unique platform and market position to build and acquire a compelling portfolio of enthusiast services catering to tens of millions of passionate fans. It is the perfect strategy at the ideal moment in history.”

That said, Cinedigm reported a net loss of $9.7 million on revenue of almost $10 million. That compared with a net loss of $2 million on revenue of $11.5 million in the previous-year period. This decrease was primarily due to the expected decline in Cinedigm’s cinema equipment business and the negative impact of the pandemic on theatrical revenue. and temporary DVD warehousing and distribution center shutdowns due to the virus.

CEO Chris McGurk said Cinedigm is laser-focused on building a portfolio of targeted enthusiast channels through acquisition, including most-recently The Film Detective, Fandor, Screambox, and separately Matchpoint streaming technology.

“We have significantly reduced our debt and have substantial cash reserves, which gives us the firepower to continue to rapidly execute this strategy in the face of limited competition because of our expansive global distribution footprint and huge library of digital content,” McGurk said.

Indeed, total debt was reduced by $25.7 million, or 51%, versus Dec. 31, 2019; compared with March 31, 2020, total debt was reduced by $23.7 million or 48.3%.

Lionsgate Home Entertainment Revenue Up Through Nine Months of Fiscal Year

Lionsgate home entertainment continues to see a digital lifeline as the pandemic undermines major new movie releases due to theatrical closures and limited seating.

The studio Feb. 4 reported third-quarter (ended Dec. 31, 2020) motion picture revenue of $250 million, down almost 48% from revenue of $474 million during the previous-year period. Segment operating income, which includes home entertainment, inched up 2% to $50 million from $49 million last year — despite higher theatrical and ancillary revenue in the prior-year quarter.

Like other studios/distributors, Lionsgate attributed the motion picture decline to the pandemic that has seen 65% of major market theatrical screens shuttered and major releases backlogged, curtailing packaged-media and digital releases.

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“Our success in generating strong returns from early PVOD, multiplatform, and hybrid models for the films FataleAntebellumRunI Can Only Imagine and The Secret speaks to our ability to monetize current films, while at the same time working with our theatrical exhibition partners to plan for the future,” CEO Jon Feltheimer said on the fiscal call.

The studio said five feature films have returned to production, three new film productions have started, and in the coming months Lionsgate will begin shooting the Wonder sequel White Bird from director Marc Forster; Shotgun Wedding, starring Jennifer Lopez and Josh Duhamel; Are You There, God? It’s Me, Margaret from producer James L. Brooks; Borderlands, teaming Kevin Hart and Cate Blanchett; and John Wick 4, starring Keanu Reeves for 2022 release.

Total home entertainment movie revenue in the quarter fell 16.5% to $159.5 million, from $190.9 million during the previous-year period. DVD/Blu-ray Disc sales tallied $36.2 million, down almost 52% from $75.4 million in the previous-year period. Digital revenue increased 6.5% to $123.1 million from $115.5 million last year.

Through nine months of the fiscal year, home entertainment movie revenue is down 6.4% to $476.8 million from $509.1 million last year.

Top-selling packaged-media releases in 2020 included Midway and Knives Out.

Television production in Q3 saw operating income swing to black with $30 million on revenue of $228 million. That compared with an operating loss of $6 million and revenue of $189 million the previous year.

Television home entertainment content sales skyrocketed to $61.1 million, from $10.6 million the year before. Disc sales topped $3.1 million, up from $600,000. Digital revenue reached $58 million, up exponentially from $10 million in the previous-year period. Through nine months, home entertainment sales of TV content is up 150% to $124.7 million from $49.8 million a year earlier.

In spite of the challenges, Lionsgate is currently shooting 19 scripted television series and, another 20 unscripted shows around the world.

Through nine months of the fiscal year, total home entertainment revenue topped $601.5 million, up about 2% from revenue of $589 million during the previous-year period.

Meanwhile, Lionsgate’s move into over-the-top video distribution continues to grow. The Santa Monica, Calif.-based studio saw global subscribers, including StarzPlay Arabia, a non-consolidated equity method investee, increased to 28 million, with global OTT subscribers increasing 900,000 to 14.6 million, 52% of the total. StarzPlay International OTT subscribers grew 26% in the quarter and domestic OTT subscribers posted gains of 300,000 subs.

Starz SVOD subs in the U.S. increased to 9.5 million, up 31% from 5.6 million during the previous-year period. International subs increased to 2.4 million from 700,000. Spanish-language based SVOD Pantaya ended the period with 900,000 subs, up 50% from 600,000 subs a year ago.

“From the Starz acquisition four years ago, through the international rollout that began in 2018, we’ve been converting and scaling Starz into a modern, data-driven global subscription leader that has become the first ‘traditional’ service to have more over-the-top than linear subscribers, a critical digital inflection point,” Feltheimer said. ” By the end of next quarter, we expect streaming revenue to surpass traditional for the first time as well.”