Cineverse Ups Q3 Streaming Video Subscriptions 30% to 1.4 Million

Streaming technology and entertainment distributor Cineverse Feb. 14 announced that its third-quarter (ended Dec. 31, 2023) subscription-based streaming video revenue increased 13% to $3.4 million from $3 million in the prior year period. Total paid subscribers grew 30% to 1.4 million from 1.07 million last year, and up 11% from 1.26 million at the end of the last fiscal quarter.

Los Angeles-based Cineverse posted a quarterly net loss of $2.8 million on revenue of $13.3 million, compared to net income of $5 million on revenue of $27.9 million in the previous-year period. The company attributed the loss to its $3 million investment in Metaverse, a transaction that was originally acquired in a cashless transaction. Excluding that deal, net income in the quarter was $200,000.

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Contributing to the revenue decline was the loss of the company’s legacy digital cinema business ($7.2 million in revenue, 84% operating margin), and comparison to last year’s theatrical success driven by the horror movie Terrifier 2, which resulted in a $3.8 million decrease in theatrical revenue.

Cineverse secured the rights to Terrifier 3, which is currently filming and scheduled for release next year.

Advertising-based revenues declined 31% to $4.1 million, primarily due to ongoing channel optimization efforts, a non-recurring technical transition with a large free ad-supported streaming television (FAST) platform partner, and the current economic climate in the advertising market.

Cineverse continues to outsource internal functions to India, which has resulted in the elimination of 29 positions, and helped generate upwards of $8 million in annualized direct operating and SG&A cost reductions.

“Our more than two-dozen enthusiast streaming channels and multiple revenue streams…provides us with an opportunity to improve our profitability by optimizing our portfolio by eliminating channels that generate lower margin revenues and, instead, focusing resources on higher return channels,”  CEO Chris McGurk said in a statement.

Chicken Soup for the Soul Entertainment CEO: ‘Best Financial Quarter in Our History’ Following Redbox Acquisition

Chicken Soup for the Soul Entertainment’s $375 million acquisition of Redbox in May is paying off for the streaming video distributor.

The company, whose assets also include Crackle and PopcornFlix, among other ad-supported platforms, Nov. 14 reported net revenue of $72.4 million in the third quarter (ended Sept. 30), up 149% from revenue of $29.1 million during the previous-year period. The net loss increased 20% to $20.1 million, from a net loss of $16.7 million a year ago.

CEO William J. Rouhana Jr. attributed the revenue increase and loss surge largely to the Redbox acquisition, which included the assumption of $325 million in Redbox’s debt.

“This has been the best financial quarter in our history, and our position in the free and low-cost streaming ecosystem is stronger than ever after completing the acquisition,” Rouhana said in a statement.

CSSE did not disclose Redbox’s operating results, which includes 34,000 legacy disc rental kiosks as well as branded TVOD and free ad-supported streaming TV (FAST) platform. The company has not yet posted its 10Q filing.

“Despite a slowing economy, I am optimistic about the days ahead as we continue to serve value-conscious consumers across kiosk, transactional and ad-supported video on demand services,” Rouhana said.

CSSE also announced the promotion of Jason Meier to CFO of Chicken Soup for the Soul Entertainment effective Nov. 15. Meier served as the company’s chief accounting officer since September 2021. Chris Mitchell will continue as the CFO of the parent company, Chicken Soup for the Soul Holdings, and will remain a member of the board of directors of Chicken Soup for the Soul Entertainment.

Imax Ups Q3 Revenue 21%, Net Loss Grows to $9 Million

Theatrical exhibitor Imax Oct. 31 reported a third-quarter (ended Sept. 30) net loss of $9 million, widened almost 7% from a net loss of $8.4 million in the previous-year period. Imax saw revenue increase 21% to $68.8 million from $56.6 million in the prior-year quarter.

Through the first nine months of the fiscal year, Imax has narrowed its net loss 22% to $25.4 million, from $32.4 million a year ago. Revenue has increased 39% to $202.8 million, from $146.3 million.

CEO Richard Gelfond

CEO Richard Gelfond attributed the revenue increase to the company’s diversified revenue model, including local-language movies, and acquisition of streaming technology company SSIMWAVE, enhancing its ability its branded screen images in the home.

“[We] demonstrated the strength of [our] differentiated model in the quarter to grow revenue, box office, and [pre-tax earnings] despite a temporary slowdown in the Hollywood pipeline,” Gelfond said in a statement.

The executive is eyeing “significant potential tailwinds” this quarter with the release of Black Panther: Wakanda Forever and Avatar: The Way of Water, the latter the long-awaited sequel to the highest grossing Imax film ($270 million) of all time.

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“In the short-term, SSIMWAVE is expected to generate incremental revenue and be accretive in 2023, and in the long-term open a new world of possibility for our image enhancement capabilities — across not only streaming and theatrical, but gaming, virtual reality (VR) and augmented reality (AR),” Gelfond said.

Netflix Beats Guidance, Adds 2.4 Million Subs Globally, Including 100,000 in North America

Netflix is back on the subscriber growth bandwagon. And beating its chest.

The subscription streaming VOD behemoth Oct. 18 said it added 2.4 million net subscribers in the third quarter (ended Sept. 30), including 100,000 subs in North America. The streamer had expected to add only 1 million subs globally. It lost 1.3 million North American subs in the previous second quarter.

Netflix ended the quarter with more than 223 million subs worldwide.

“After a challenging first half, we believe we’re on a path to reaccelerate growth,” co-CEOs Reed Hastings, Ted Sarandos and CFO Spencer Neumann wrote in the shareholder letter.

Indeed, after successive fiscal quarters of relative doom and gloom (for Netflix anyway), executives took the opportunity to gloat. The quarter featured some of the streamer’s biggest ratings hits, including limited series, “Dahmer — Monster: The Jeffrey Dahmer Story,” “Stranger Things” season four, South Korean hit “Extraordinary Attorney Woo,” Ryan Gossling actioner The Gray Man, and military romance Purple Hearts.

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Netflix said it has higher viewer engagement than any other streamer with room for growth. The streamer said it accounts for 8.2% of all TV time in the U.K., which it said is 2.3 times bigger than Amazon Prime Video and 2.7 times greater than Disney+.

In the U.S., Netflix accounts for 7.6% of all TV time, which it said is 2.6 times greater than Prime Video and 1.4 times greater than the combined Disney, Hulu and Hulu + Live TV.

More importantly, Netflix says all of its competitors are losing big money trying to catch up.

“Building a large, successful streaming business is hard — we estimate they are all losing money, with combined 2022 operating losses well over $10 billion versus [our] $5 to $6 billion annual operating profit,” wrote the executives.

Netflix is projecting net subscriber growth of 4.5 million in the current fourth quarter, ending Dec. 31. That compares with 8.3 million net adds in the previous-year period. The streamer contends that the usual seasonality and strong content slate will drive sub growth. The Nov. 3 launch of the pending ad-supported subscription tier is not expected to have a material impact on Q4 earnings.

“Our aim is to give our prospective new members more choice — not switch members off their current plans,” Hastings & Co. wrote. “Members who don’t want to change will remain on their current plan, without ads, at the current price.”

Lack of Movie, Streaming Releases Sink Hasbro’s Q3 Entertainment Segment Fiscal Results

Hasbro Oct. 18 reported third-quarter (ended Sept. 25) TV/Film/Entertainment segment revenue of $211.6 million, which was down 35% from revenue of $327.1 million during the previous-year period.

The game, toy and consumer products company said film and TV revenue declined 26% when comparing year-over-year fiscal results that included streaming releases of the Come From Away and Finch released on Apple TV+ in the prior period.

Family Brands revenue declined 78% primarily due to the delivery of the film My Little Pony: A New Generation to Netflix in the third quarter of 2021, which did not have a comparable film release this year.

As a result, the segment reported a pre-tax loss of $4.8 million, compared with a pre-tax profit of $44.1 million a year ago.

“As expected, the third quarter is our most difficult comparison and was further impacted by increasing price sensitivity for the average consumer,” CEO Chris Cocks said in a statement.

The company said it is merchandising seven new theatrical releases and more than 20 streaming and TV shows, starting with November’s Marvel Studios’ Black Panther: Wakanda Forever and the company’s own “Transformers: EarthSpark” animated scripted series produced by Entertainment One and streaming on Paramount Global’s Nickelodeon platform.

“To achieve our full-year outlook, we are projecting Hasbro’s fourth quarter revenue to be approximately flat versus last year on a constant currency basis,” Cocks said.

Lionsgate: Starz Streaming Approaching 20 Million Subscribers

Lionsgate Feb. 3 announced that its Starz-branded subscription streaming services ended the third quarter (Dec. 31, 2021) with a combined 19.7 million subscribers worldwide. That’s up more than 44% from 13.7 million during the previous-year period.

Speaking on the fiscal call, CEO Jon Feltheimer said Starz, which includes StarzPlay International and StarzPlay Arabia, remains “solidly on track” to reach its target of 50 million to 60 million global subscribers by 2025.

The platform’s original and licensed (to third-party) content includes “Outlander,” “Droughtlander,” “Power,” “Power Book IV: Force,” “Ghost,” “Shining Vale” with Courteney Cox, Greg Kinnear, Sherilyn Fenn and Mira Sorvino; “Gaslit,” and a second season of “P-Valley,” among others.

“We’re relying on a combination of hyper-focused programming, early mover advantage and our ability to complement as well as compete with other platforms,” Feltheimer said.

Lionsgate continues to up Starz’s profile as it explores options on either selling or spinning-off the property. Co-chairman Michael Burns said the company would be providing updates on the process “at the appropriate time.”

Separately, motion picture revenue increased $25 million in the current quarter due to increased television revenue and theatrical revenue, partially offset by lower home entertainment revenue due to fewer releases in the current quarter.

Theatrical revenue increased $3.9 million due to an increase of $3.6 million from the company’s feature film category, which included seven days of revenue from the Dec. 25, 2021, release of American Underdog, the biopic about former Rams QB Kurt Warner. In the prior year’s quarter, theaters were mostly closed due to circumstances associated with the COVID-19 global pandemic.

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Television Production revenue increased $210.4 million due to increased intersegment revenues from the licensing of Starz original series, and a greater number of television episodes delivered to third parties, as compared to the prior year’s quarter.

The current quarter six new and seven renewed Lionsgate television shows were picked up by third-party platforms. The company has five series streaming on HBO Max; a new series at ABC and Fox; the recent pickup of the Lincoln assassination series, “Manhunt,” following the two-season renewal of “Mythic Quest” at Apple+; and a series order for “Swimming With Sharks” for The Roku Channel after a successful airing of Zoey’s Extraordinary Christmas.

The increases in television production and motion picture revenue were largely offset by increased intersegment eliminations, primarily associated with higher television production revenue (a substantial portion of intersegment eliminations relates) for licenses of original series to Starz Networks and StarzPlay International, both in the media networks segment.

Overall, Netflix lost $45.6 million on revenue of $885.4 million. That compared with revenue of $836.4 in the previous-year period. Through nine months of the fiscal year, revenue is up 12.5% to $2.7 billion.

“Our television group achieved a banner performance in the quarter in new series pickups and current series renewals, our library continued to generate strong high-margin revenue, and our motion picture group assembled a great pipeline of branded intellectual properties,” CEO Jon Feltheimer said in a statement. “Though COVID-related production delays resulted in diminished subscriber growth relative to our expectations in the first half of the year, putting pressure on revenue and segment profit in the current quarter, Starz’s programming is back on track and expected to translate into continued subscriber growth going forward.”

Revenue from Lionsgate’s 17,000-title film and television library was $771 million for the trailing 12 months.

Lionsgate Q3 Home Entertainment Revenue Declines 27% Due to Fewer Releases

Lionsgate Feb. 3 reported third-quarter (ended Dec. 31, 2021) home entertainment revenue of $159.4 million, down almost 28% from revenue of $220.6 million in the previous-year period. Home entertainment includes sales of Lionsgate-produced movies and TV shows across physical and digital formats.

Motion picture retail sales topped $144.9 million, which included $31.3 million in combined DVD/Blu-ray Disc and 4K UHD Blu-ray titles. That compared with $159.5 million in sales, including $36.4 million in physical media in the previous-year period.

TV show revenue topped just $14.1 million in the quarter, including $1.7 million on disc. That compared with revenue of $61.1 million, and $3.1 million on disc.

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Lionsgate said the 9.2% revenue decrease in movie retail sales was due to lower digital-media revenue of $15.3 million in Lionsgate’s movie category, driven by fewer releases. In particular, the current quarter included revenue from the release of The Protégé, which compared to revenue in the prior year’s quarter from the initial release on a streaming platform of Run and from the premium video-on-demand (PVOD) release of Antebellum.

TV content sales decreased $46.6 million due to significant digital media revenue in the prior year’s quarter for season six o “Power” and the second syndication license of “Mad Men” seasons one to seven.