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.

Discovery, StarzPlay Partner for SVOD Distribution

Discovery and StarzPlay March 16 announced a partnership that will see the former’s Dplay streaming video service available across the Middle East and Asia (MENA) on StarzPlay, Starz’s international SVOD based in Dubai with more than 1 million subscribers.

The agreement affords StarzPlay subs access to thousands of hours of content, segregated into playlists dedicated to specially curated interest verticals — including crime, lifestyle, food, wildlife and more. New content will be added to the platform each month.

Discovery TV franchises include “Shark Week,” “MythBusters,” “Gold Rush,” “Expedition Unknown,” “House Hunters International” and “Say Yes to the Dress,” among others.

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“This is the first time Discovery is taking its content beyond the pay-TV universe in the region and opening it up to a whole new customer base,” Amanda Turnbull, GM, Discovery Middle East & Africa, said in a statement. “As we commence our pivot toward digital, this milestone sets the benchmark for Discovery’s continued growth in the digital space.”

Following a free trial period of up to one-month (varies across the region), monthly subscription to the content costs AED/SAR15 ($4) per month as an add-on package.

“With this partnership we are starting a new chapter in company’s growth to become the one-stop shop for premium content,” said Danny Bates, chief commercial officer of StarzPlay.”

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Dplay will be available in Q2 2020, through existing StarzPlay apps, including Apple TV. StarzPlay is available to download online and via respective iOS and Android app stores.

 

StarzPlay Streaming Marvel Movies Ahead of Disney+ Euro Debut

Disney’s subscription streaming service is coming to Europe and other regions outside the United States. But Lionsgate’s StarzPlay is already streaming Marvel movies in the Middle East and North Africa (MENA) region.

Due to pre-existing arrangements, Marvel superhero titles such as Iron Man, starring Robert Downey Jr., Iron Man 2, Iron Man 3; Captain America: The First Avenger, Captain America: The Winter Soldier, Captain America: Civil War, and Guardians of the Galaxy, Guardians of the Galaxy Vol. 2 and The Avengers: Endgame are all available on the $8.99 monthly service.

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Disney and Starz last year made a marketing deal enabling Starz-licensed Star Wars: The Force Awakens to be available instead on Disney+ when it launched on Nov. 12, 2019.

Before the launch of Disney+, CEO Bob Iger told analysts the company was “encumbered” by licensing arrangements it had with a number of different distributors, notably Netflix and Starz.

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Lionsgate Licenses Box Office Titles to StarzPlay Streaming Platform in the U.K.

StarzPlay, the Lionsgate-owned international subscription streaming video service, Feb. 6 announced a theatrical output deal with corporate parent Lionsgate for split first pay streaming rights in the United Kingdom to the studio’s recently released and upcoming feature films.

Under the multiyear agreement, StarzPlay subs in the U.K. will be able to access Lionsgate original films Knives Out, Bombshell, which has earned three Academy Award nominations, and actioners Angel Has Fallen and Rambo: Last Blood along with Lionsgate UK’s The Personal History of David Copperfield and Military Wives. Lionsgate’s feature film slate grossed nearly $1.3 billion at the global box office in 2019.

“One of our top priorities is to supply StarzPlay with a deep roster of exciting Lionsgate content that complements their original programming and 3rd party acquisitions as they continue to launch their service around the world,” Jim Packer, president of worldwide television & digital distribution, said in a statement. “This agreement reflects a thoughtful and flexible approach to our windowing strategies, while building value through the continued combination of our IP creation and platform distribution capabilities.”

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Starz EVP of International Digital Networks Superna Kalle said the agreement “only scratches the surface” what the two companies can achieve working together.

“Offering consumers great content is key to growing our subscriber base as we continue our international rollout,” Kalle said.

The deal was negotiated by Lionsgate President of International Television & Digital Distribution Agapy Kapouranis, SVP and Head of Europe, Middle East and Africa Television Sales Nicky Wood, and VP of U.K., Turkey & Greece Television Sales Nazneen Sethi.

The Lionsgate movies join StarzPlay TV series “The Act,” “Pennyworth,” “Castle Rock” and “The Spanish Princess.”

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StarzPlay, launched in 2018, has expanded its streaming platform into 49 countries. It gives subscribers the opportunity to watch a highly curated portfolio of Starz premium content, films and television series from Lionsgate’s 17,000-title library, and an exciting line-up of third-party acquisitions, with future Starz Originals airing exclusively on StarzPlay day-and-date with the U.S.-based Starz OTT.

Lionsgate Ups Q3 Motion Picture Segment Profit; Streaming Video Costs

Liongate’s motion picture group, which includes home entertainment, Feb. 6 reported third-quarter (ended Dec. 31, 2019) operating income of $49 million, which was up 12.5% from operating income of $43.5 million in the previous-year period.

Revenue increased 30% to $474 million from $362.6 million during the previous-year period. The studio attributed much of the gain to the box office success Knives Out, which is expected to top $300 million at the worldwide box office, as well as the continued outsized ancillary home entertainment performance of John Wick: Chapter 3 — Parabellum.

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Knives Out, which features an ensemble cast, has generated more than $294 million at the global box office since launching Nov. 27, 2019.

Separately, Keanu Reeves actioner, John Wick: Chapter 3 — Parabellum, finished 2019 as the ninth best-selling DVD/Blu-ray Disc release according to VideoScan tracking data.

“Our Motion Picture Group turned in a strong performance in the quarter,” CEO Jon Feltheimer said in a statement.

At the same time, Lionsgate continues to push over-the-top video distribution — specifically Starz and StarzPlay internationally. The streaming services ended the period with more than 8.6 million subscribers. The company has projected StarzPlay international subscriber growth from 15 million to 25 million over the next five years.

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The legacy pay-TV businesses Starz, StarzPlay Arabia and Pantaya reached 28.5 million subs in the quarter. The overall global total reflected an increase of 2.1 million subscribers, up 8% year-over-year. Total domestic Starz subs declined 1.2 million year-over-year to 24.1 million.

Rollout of StarzPlay International and Starz OTT continue to balloon costs and negatively impact the bottom line. StarzPlay posted a segment operating loss of nearly $40 million, while streaming services lost $9.8 million. Both units lost a combined $5.8 million in the previous-year period.

StarzPlay Inks Content Deal With Image Nation Abu Dhabi

StarzPlay, the international subscription streaming video service owned by Lionsgate, has inked an original production deal with Image Nation Abu Dhabi. StarzPlay is separate than Starz OTT, the domestic $8.99 SVOD service.

StarzPlay/Image Nation anthology co-production of Urban Legends, with each episode telling a different story. The series will explore regional tales and fables from the Middle East that seek to resonate with StarzPlay’S Arabic speaking audience. Production will commence in 2020 with the Arabic-language content set to be released towards the end of the same year.

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The announcement follows Image Nation’s recent focus on episodic content, having released documentary series History of the Emirates. The series launched on local and international channels around the UAE’s 48th Annual National Day and is currently airing in 50 countries around the world on National Geographic.

“This is a real milestone in StarzPlay’s development as we enter into a new realm, producing our own original Arabic content for the first time,” Maaz Sheikh, co-founder/CEO at StarzPlay, said in a statement. “We hope this is the beginning of a long and productive journey with Image Nation as we enter into the original content space, initially with a focus on Arabic language.”

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StarzPlay is available in 20 countries across the Middle East, North Africa and Pakistan, with more than 10,000 hours of content including premium movies, exclusive and Arabic series.

Starz Rolls Out International Play App

Starz Nov. 25 announced it has launched its international StarzPlay app in Brazil, France, Germany, Mexico and the United Kingdom, with plans to launch in 20 additional countries in 2020.

Lionsgate-owned Starz has more than 5.6 million domestic over-the-top video subscribers. StarzPlay is a separate SVOD service outside the United States.

“Expanding our direct-to-consumer product into the global arena … gives subscribers seamless entry to our platform and premium content on their device of choice, while also providing us with access to key consumer data insights as we continue to position ourselves for success in the evolving content ecosystem,” CEO Jeffrey Hirsch said in a statement.

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StarzPlay ($5) is currently available in Europe and Latin America on Apple TV; in France, Germany, Mexico and the U.K. on Amazon Prime Video channels; Mexico on izzi and Totalplay; in Spain on Orange and Vodafone; in the U.K. on Virgin Media; in France on Orange; and as Starz in Canada in alliance with Bell Media.

Subscribers in select countries have access to hundreds of movies and series, including Starz Originals such as the recently debuted “The Spanish Princess” and “Dublin Murders,” as well as curated series including “The Act” and drama “Mr. Mercedes” and movies like Hitch, Ferris Bueller’s Day Off and No Country for Old Men.

Amazon Prime Channels Launches in Mexico

Amazon has expanded its Prime Channels video platform to Mexico, affording members in the country access to third-party subscription streaming video services.

Launched in 2015 in the United States, Prime Channels is an attempt to thwart online TV and pay-TV by offering Prime subscribers direct access to alternative streaming services.

The platform has been credited helping SVOD services such as HBO Now, StarzPlay, Cinedigm’s Dove Channel, CBS’ Showtime OTT, BritBox and Viacom’s Paramount+ generate sustainable subscriber bases.

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“We are excited to bring even more selection to our Prime members in Mexico with the launch of Prime Video Channels,” Greg Hart, VP of Amazon Prime Video, said in a statement. “By simplifying our customers’ entertainment experience all within the Prime Video app, we can make it even easier for them to select, subscribe and enjoy their favorite TV shows and movies from our channel providers.”

Amazon Prime Channels is also available in the U.K., Germany, Austria, Japan and Canada.

 

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.