Lionsgate sees streaming numbers rise, but revenues hit by Hollywood strikes

US studio Lionsgate reported solid gains in its North American streaming business in its fiscal third quarter, with overall media revenues up despite a decline in the linear business and the company’s exiting its Lionsgate+ service from international markets.

Lionsgate CEO Jon Feltheimer

However, the company’s overall revenues dropped because of the hit taken last year to production from the Hollywood writers and actors’ strikes.

Lionsgate had previously unveiled plans to split into two companies, with the studio business to be spun off via a Special Purpose Acquisition Company (SPAC) led by Eagle Equity Partners. Lionsgate Studios is expected to float on the NASDAQ exchange in the spring with a full separation to follow by the year end.

The remainder of the company, the Starz streaming and networks business, added 700,000 North American streaming subscribers in the quarter to take its total in this market to 13.43 million.

Starz domestic US streaming subs rose to 12.63 million at the end of quarter, up from 11.56 million a year previously, with linear subs declining to 7.1 million, down from 8.02 million, giving a US Starz total of 19.73 million.

Lionsgate+ subscribers, excluding territories the company has exited or plans to exit, numbered 3.25 million, down from 3.77 million for the prior quarter and from 3.47 million for the prior year. Starzplay Arabia, the group’s Middle East JV, had 3.19 million subscribers at the end of the quarter, up from 3.04 million for the prior quarter and 2.55 million a year earlier.

Total linear and OTT subs for Lionsgate numbered 25.92 million at the end of the fiscal third quarter, down from 28.1 million a year earlier.

Lionsgate+ subs in markets exited or still to be exited (Australia, continental Europe, Japan, Latin America and. The UK) numbered 1.1 million at the end of Q3.

Lionsgate’s media networks revenue for the quarter amounted to US$417.2 million, up from US$380.3 million a year earlier, with profit rising from US$49.5 million to US$85.5 million.

However, Lionsgate’s overall revenues dropped from US$1 billion to US$975.1 million, with adjusted OIBDA falling from US$167.8 million to US$150.9 million when the studios business was added.

“We’re pleased to report another strong financial quarter in which the performance of our diversified businesses gives us confidence that we can continue to deliver the growth our investors expect,” said Lionsgate CEO Jon Feltheimer.

“The investments we made in the quarter to acquire eOne and expand our partnership with 3 Arts, along with our plan to launch Lionsgate Studios as an independent, publicly-traded pure play content company, will continue to enhance the strength of our businesses moving forward.”