Lionsgate investors are likely looking ahead to the impact La La Land will have on next quarter but for now the performance of the studio’s TV segment is a bright spot.
Lionsgate TV product segment saw its quarterly revenues climb 39% to $229 million, which the company said was the second highest total ever. The studio gave credit to an increase in television deliveries including episodes of "Orange is the New Black," the new series "Dear White People" and the three-hour musical event "Dirty Dancing."
On the strength of the revenue boost, the segment’s profit increased 117% to $26 million.
"We're pleased to report increased profits across our film, television and media networks divisions as well as another strong revenue performance from our Television Group," said Lionsgate Chief Executive Officer Jon Feltheimer in a statement. "We've just completed one of our busiest and most productive quarters ever as we continue to scale our global content platform and integrate Starz into our operations. Our strong film and television offerings are now complemented by our Starz premium network that is becoming a ‘must-have’ value proposition for the digital age."
With the Starz acquisition now complete, Lionsgate didn’t offer comparable numbers for its media networks segment, did report quarterly revenues of $85 million and segment profit of $33 million. But, on a combined pro forma basis (reflecting the integration of Starz for all periods) the segment grew revenues 3% in the quarter, according to a news release.
On Wednesday’s earnings call, much of the conversation centered on Starz, according to Jefferies analyst John Janedis, including talk of the trajectory of subs, revenue and margins. He warned that Starz’s OTT product, which last year claimed it had reached the 1 million subscriber mark, could be negatively impacting total subscriber numbers.
“Total subs declined seq. from 56M to 55.3M—while early, it appears that churn with OTT subs could be a contributing factor—a trend worth watching,” wrote Janedis in a research note.
In spite of the strong TV performance—and the fact that motion picture profits are up 55%, helping lead to total quarterly revenue of $752 million, up 12%—Lionsgate still posted a net loss of $31 million during the quarter.