Starz and BBC Studios’ BritBox will come together on a new bundle next quarter as streamers big and small continue to pair up, said Lionsgate CEO Jon Feltheimer.
Starz’ strong core demos “make it a bundling partner of choice,” he added on a call after the company reported earnings for the June quarter. The combination will see the respective apps bundled directly through Starz.com.
“By leveraging its advanced tech stack, Starz is enabling the creation of a compelling and complimentary offering that pairs Starz hits like Outlander and The Serpent Queen with BritBox’s unmatched collection of original series such as Vera Shetland and Blue Lights alongside iconic library classics like Downton Abbey and Killing Eve.”
Starz is set to assume a higher profile as Lionsgate splits in two with execs confirming a year-end 2024 timeline. Lionsgate Studios, which merged with a SPAC, has been a separately publicly traded company since April. For now, the old Lionsgate Entertainment still controls most of Lionsgate Studios. At the the split, most of Studios will be spun out to shareholders, except for the circa 13% already owned by the SPAC investors, leaving two pure play companies — Starz and Studios, both more focused businessess.
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Lionsgate posted a mixed June quarter with revenue down 8% ti $835 million but losses narrowing $$61 million from ($71 million). It was the first quarter of Lionsgate’s fiscal 2025.
Library sales, always a standout, saw $882 million for the trailing 12-month period.
“We’re pleased to report a solid quarter despite unprecedented industry disruption and the aftereffects of the strikes,” Feltheimer said.
The studio business saw revenue and operating profit both dip about 6% to, respectively, $588 million and $58.3 million.
Motion Picture sales fell but profits jumped. At Television that was reversed as profit growth was impacted by lingering impacts of the strike on the timing of deliveries in a heavily backloaded year.
Media Networks, that’s Starz, saw North American revenue flattish at $345 million and profit jump 54% to $58.5 million.
North American OTT subscribers increased 5.5% to 13.2 million year on year but fell sequentially.
Earlier this week, Starz notified its U.S. customers of a $1 monthly rate increase
As shock waves linger from the pandemic and Hollywood strikes, Feltheimer said there some things Lionsgate can’t control but others it can, like costs. He noted millions in savings by cutting producer deals after acquiring Canada’s eOne, the production company acquired from Hasbro in late 2023.
“In television, we’re reducing the number of combined Lionsgate and eOne producer deals by 70% with $30 million in projected annualized savings,” he said on a call after quarterly earnings.
Feltheimer said Lionsgate is really pleased with the deal and Jim Packer, head of worldwide TV and digital distribution, recalled some key things about it: Lionsgate Canada is now a significant player; eOne used to control key Lionsgate franchises (Hunger Games, John Wick) in some big territories, now it’s all one family; And procedurals were a soft spot in Lionsgate’s library until eOne gave it The Rookie along with 20 others.
At its real estate operations, Lionsgate consolidated offices and plans to reduce lease expenses by 30% on a pro forma basis over a three-year period. And Feltheimer said it’s currently analyzing AI applications to its business “in everything from more efficient library utilization and production and marketing benefits to broader G&A efficiencies in order to continue to take cost out of the business.”