Starz Adds 400,000 Q1 Members, Tops 4.4 Million Subs

Starz added 400,000 domestic streaming video subscribers in the first quarter, ended June 30, to finish the period with 4.4 million members since launching in 2012.

It was the $9 monthly Lionsgate-owned OTT video unit’s best-performing quarter in terms of sub growth.

Total Starz sub growth, including pay-TV channels and StarzPlay internationally, increased by 2.6 million to 26.5 million, which includes 24.4 million domestic subs.

As a result of the sub growth, Lionsgate’s Media Networks division increased revenue 4.9% to $372.4 million.

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Segment profit for Starz Networks increased 3.4% to $103.7 million, which was offset by ongoing content investment in StarzPlay.

Indeed, overall Media Networks profit declined to $60.6 million from $88.5 million in the previous-year period due to content costs.

On the fiscal call, Starz COO Jeffrey Hirsch defended the SVOD service’s subscription price as Disney readies less expensive $6.99 Disney+ service on Nov. 12.

“If you look at the history of Starz, we’ve always been a premium, add-on television,” Hirsch said.

Lionsgate’s global expansion of Starz has resulted in the development of an additional 20 episodic programming projects, according to Kevin Beggs, chairman of the media company’s TV group.

Beggs dismissed Netflix’s headline-grabbing mega production deal with “Game of Thrones” creators David Benioff and Dan Weiss, contending Lionsgate doesn’t chase those kinds of deals.

“For writers and directors who are overperforming, there’s always been an unbelievable upside the way we structure our deals,” Beggs said, alluding to Lionsgate’s practice affording content creators with multiple compensation options, including backend unavailable at Netflix’s business model.

TV Time: Amazon’s ‘Carnival Row’ Most Anticipated New Show, Netflix’s ‘Mindhunter’ Most Anticipated Returning Show in August

Amazon Prime’s “Carnival Row” is the most anticipated new show and Netflix’s “Mindhunter” is the most anticipated returning show coming in August, according to TV Time’s “Anticipation Report” chart.

TV Time is a free TV viewership tracking app that tracks consumers’ viewing habits worldwide and is visited by more than 1 million consumers every day, according to the company. TV Time’s “Anticipation Report” is based on data from those users.

“Carnival Row,” a fantasy series about mythical creatures starring Orlando Bloom and Cara Delevingne, debuts Aug. 30. “The Dark Crystal: Age of Resistance,” a series prequel to the Jim Henson film The Dark Crystal, also debuting Aug. 30, is the No. 2 anticipated new series.

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Among returning shows, the second installment of “Mindhunter,” Netflix’s crime thriller series, debuts Aug. 16. TV Time users also anticipate three other Netflix returning series at No. 2, No. 3 and No. 4, respectively: “Cable Girls,” hitting Aug. 9; “Dear White People,” debuting Aug. 2; and “GLOW,” coming Aug. 9. Starz’s drug kingpin drama “Power,” the sixth and final season of which hits Aug. 25, took the No. 5 spot among returning series.

Most Anticipated New Shows for August:

  1. “Carnival Row” (Amazon Prime) — Aug. 30
  2. “The Dark Crystal: Age of Resistance” (Netflix) — Aug. 30
  3. “Infinity Train” (Cartoon Network) — Aug. 5
  4. “Why Women Kill” (CBS) — Aug. 15
  5. “BH90210” (Fox) — Aug. 7

 

Most Anticipated Returning Shows for August:

  1. “Mindhunter” (Netflix) — Aug. 16
  2. “Cable Girls” (Netflix) — Aug. 9
  3. “Dear White People” (Netflix) — Aug. 2
  4. “GLOW” (Netflix) — Aug. 9
  5. “Power” (Starz) — Aug. 25

Season 2 of ‘American Gods’ Arrives on Digital July 22, Disc Aug. 20 from Lionsgate

American Gods: Season 2, the continuing saga of the fantasy battle between new and old gods based on Neil Gaiman’s bestseller, arrives on digital July 22 and Blu-ray (plus digital) and DVD Aug. 20 from Lionsgate.

Renewed for a third season on the heels of the Starz Original’s sophomore debut, “American Gods” stars Ricky Whittle (“The 100”), Golden Globe winner Ian McShane (2004, Best Television Actor – Drama Series, TV’s “Deadwood”; John WickHellboy), Emily Browning (Sucker PunchSleeping Beauty), and Pablo Schreiber (“Orange Is the New Black,” “Law & Order: Special Victims Unit,” 13 Hours).

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In season two, the battle moves inexorably towards a crisis point as the destinies of gods and men collide. While Mr. World plots revenge for the attack against him in season one, Shadow throws in his lot with Wednesday’s attempt to convince the old gods of the urgency for full-out war, with Laura and Mad Sweeney in tow.

The release includes three featurettes:

  • “The House on the Rock: Setting the Stage,” a closer look at the location;
  • “The Second Coming: Neil Gaiman on Season Two”; and
  • “Gods and Ends: Random Musings from the Cast.”

‘Spanish Princess’ Coming to Digital July 29 and Disc Aug. 13 From Lionsgate

The historical miniseries The Spanish Princess will arrive on digital July 29 and Blu-ray and DVD Aug. 13 from Lionsgate.

The third installment in the trilogy that began with the Golden Globe-  and Emmy Award-nominated The White Queen (2014, Best Television Limited Series or Motion Picture Made for Television; 2014, Outstanding Miniseries) and the critically acclaimed The White Princess, The Spanish Princess tells the story of the strong-willed princess of Spain, Catherine of Aragon, played by Charlotte Hope.

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Drawn from the bestselling novels The King’s Curse and The Constant Princess written by Philippa Gregory, the miniseries returns to the world of Tudor royal court intrigue, told from the viewpoint of the women and shedding light on a previously untold corner of history, the lives of people of color living and working in 16th century London. Spanish princess Catherine has been promised the English throne since she was a child. She arrives in England with her diverse court, including her ladies-in-waiting Lina — a Spanish noble of African-Iberian descent — and the sweet and free-spirited Rosa. When her husband, Prince Arthur, dies suddenly, the throne seems lost to Catherine until she devises an audacious plan and sets her sights on the new heir, the charismatic and headstrong Prince Harry, who will one day rule as King Henry VIII.

Hulu, FX Getting Lionsgate Movies

Disney-owned Hulu and FX reportedly are getting pay-TV access to select Lionsgate movies beginning in 2020.

Epix, the pay-TV channel owned by MGM Studios, currently has the rights to Lionsgate movies, which include Oscar winner La La LandThe Hunger Games and Saw franchises, among others.

The John Wicks franchise starring Keanu Reeves is licensed separately to HBO through 2021. Twentieth Century Fox, which Disney recently acquired, also has a deal with HBO through 2022.

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Lionsgate co-owned Epix with Viacom and MGM, until selling its stake to the venerable studio in 2017.

The two-year deal, first reported by The Information, enables Santa Monica-based Lionsgate to migrate its movies to Starz Play, the subscription streaming service launched in 2016.

Lionsgate acquired Starz in 2016 for $4.4 billion.

Notably, it was Starz that started licensing studio movies to OTT services through an exclusive deal with Netflix in 2008 that gave the SVOD pioneer access to 2,500 movies for pennies on the dollar from Disney, Sony Pictures and others.

Six years later, then-CEO Chris Albrecht would call the Netflix agreement “terrible,” as it helped the streaming service generate subscribers looking for cheaper access to Hollywood movies.

“For a very low price [Netflix] got access to all our stuff and it devalued our wholesale and resale prices,” Albrecht told an investor group. He left Starz earlier this year.

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.

Video Streaming Widens Appeal Over Pay-TV Among Telecom Customers

Video streaming expanded its lead over subscription TV service in terms of customer satisfaction, rising to a score of 76 on the American Customer Satisfaction Index’s 100-point scale.

According to the ACSI Telecommunications Report 2018-2019, subscription TV service stagnated at 62, tied with internet service providers for last place among all industries tracked by the ACSI — subscription TV, ISPs, fixed-line telephone service, video-on-demand service and video streaming service.

Video streaming topped all industries tracked.

“Video streaming once again proves itself to be the best of the telecom industries in customer satisfaction,” said David VanAmburg, managing director at the ACSI. “Traditional telecom providers have tried to step up their game, but they’re not providing original content the way video streaming is, and in part they suffer guilt by association — if customers aren’t satisfied overall with Comcast, they’re probably going to ding Comcast’s on-demand service too.”

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Among video streaming services, Netflix secured first place at 79 after sharing the lead with Sony’s PlayStation Vue and Amazon Twitch the previous year. Netflix ranked at the top for original content among all streaming services, according to the ACSI. Sony’s PlayStation Vue landed in second place at 78, followed by the Microsoft Store at 77. Hulu stepped up to match Amazon Prime Video and Apple iTunes at 76. Five services clustered at 75: CBS All Access, Google Play, Amazon’s gaming platform Twitch, Walmart’s Vudu and Google’s YouTube. Dish Network’s Sling TV was the most improved, meeting HBO at 74. Starz matched the combined score of smaller platforms at 72, while Showtime followed close behind at 71. AT&T’s DirecTV Now fell to 69, ahead of only Sony Crackle, which remained unchanged at 68.

For the past six years, customer satisfaction with subscription TV has languished in the mid-to-low 60s, according to the study. AT&T’s U-verse TV held the lead for subscription TV at 69, followed by Verizon’s Fios at 68 and Dish Network at 67. AT&T’s satellite TV service DirecTV came in at 66, Altice’s Optimum tallied 61, and Charter’s Spectrum came in at 59 to tie with Cox Communications. Frontier Communications and Comcast’s Xfinity came in at 57. Mediacom followed closely at 56. Altice’s Suddenlink tumbles to the bottom of the category at 55.

Customer satisfaction with video-on-demand service slipped to an ACSI score of 67 as viewers continue to turn toward streaming services such as Netflix and Hulu, according to the study. AT&T’s U-verse TV service held the lead a year ago, but this year shared the top spot with Verizon’s Fios at a score of 72. Satellite provider Dish Network dropped to 71 but remained just ahead of DirecTV, unchanged at 70. Frontier Communications debuted in the category with a score of 67, in line with the industry average. Three decliners met at 66: Cox Communications, Altice’s Optimum and Comcast’s Xfinity. Charter’s Spectrum remains unchanged at the bottom of the category with a 64.

Unchanged at a score of 62, ISPs remain at the bottom of the ACSI rankings. Most ISPs are still falling short of providing good service at an affordable price, according to the ACSI release. Verizon’s Fios was stable at the top of the category with an ACSI score of 70, but AT&T Internet closed in at 69. Altice’s Optimum fell to 63 but remained the leader among coaxial providers. Meanwhile, Comcast’s Xfinity inched closer to the industry average at 61. Cox Communications tallied 60, tying Altice’s Suddenlink. Charter’s Spectrum and CenturyLink came in at 59.

Starz EVP Marta Fernandez Stepping Down

Marta Fernandez, EVP of original programming at Starz, reportedly is stepping down less than six months after being promoted to the position. Fernandez has been with the Lionsgate-owned pay-TV channel since 2007.

Starz and a branded subscription streaming video service have been owned by Lionsgate since 2016 after the studio acquired the company for $4.4 billion. Media reports last week suggested CBS had offered Lionsgate $5 billion for Starz, which was declined.

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Starz CEO Chris Albrecht exited the company in February.

Fernandez’s contributions to Starz included spearheading various “Spartacus” – themed series, including “Blood and Sand,” “Gods of the Arena,” “Vengeance,” and “War of the Damned,” in addition to “Boss,” “Flesh and Bone,” “Ash vs Evil Dead,” “Da Vinci’s Demons” and “Black Sails,” among others.

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.

 

 

‘Apple Channels’ Platform Launches Offering Access to Third-Party Streaming Services

Apple May 13 has formally launched “Apple Channels,” an app enabling users access to third-party subscription streaming services such as HBO Now, Showtime OTT and Lionsgate-owned Starz, among others.

The platform mimics Amazon Prime Channels, which bowed in 2015 offering Prime members direct access to HBO Now, Showtime, CBS All Access, Shudder, Sundance Now, Dove Channel, Acorn TV, Urban Movie Channel, among other others.

Amazon Channels, which maintains control over third-party OTT usage among Prime members, in addition to revenue sharing deals, has been credited by WarnerMedia, LIonsgate and CBS for driving subscriber growth for their respective brands.

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Apple Channels reportedly is getting from 15% to 30% of third-party revenue from subscribers registering through The App Store on Apple devices.

In addition, Apple Channels users can only stream third-party content through its app on Apple devices; not on other platforms such as Roku, Google Chromecast or PlayStation Vue, among others.

Current third-party SVOD subs can access the platforms through Apple Channels. The platform is not Apple TV+, the new SVOD platform launching later this year.