Starz OTT reaches 2M subcribers as linear channels drop 100K subcribers in Q2

American Gods
"American Gods" premiered in April on Starz. (Lionsgate)

Lionsgate’s Starz OTT service reached 2 million subscribers, but the linear network dropped another 100,000 and is down to 24.1 million subcribers, according to Jefferies analyst John Janedis.

The new totals for Starz OTT come after last month, when the company revealed that its OTT subscriber base had surpassed 1 million.

The slightly vague subscriber update was tucked into an announcement that Starz had “significantly invested” in its app and OTT programming over the past 14 months and increased its OTT and on-demand content library by 125% to 5,500 titles.

RELATED: Starz more than doubles OTT content, pushes past 1M subscribers

As for the Starz traditional linear network, Janedis believes things will pick back up during the next quarter thanks to the timing of upcoming programming.

“The impact from ATT U-Verse continues, but should be offset by growth of OTT subs, particularly as Starz staggers new programming to reduce churn (Survivor's Remorse on 8/20, Outlander 9/10). LGF believes they can continue to increase subs modestly over the long term, and drive ARPU higher with the OTT positive mix shift,” wrote Janedis in a research note.

New Starz OTT subscriber figures are accompanied by Lionsgate’s first-quarter results, which are marked by $1.01 billion in total revenue and $174 million in net income attributable to Lionsgate shareholders.

"With our second straight billion-dollar revenue quarter, combined with strong bottom line profits, the scale of our global content platform is reflected in our financial results as well as our operational achievements. We continued to grow our content business in the quarter by launching significant new premium properties, expanding the reach of current brands and adding to the Lionsgate-owned or controlled platforms across which we monetize our intellectual property," said Lionsgate CEO Jon Feltheimer in a statement.

Lionsgate said new results were not directly comparable to the year-ago quarter due to the Starz acquisition, but the company did outline segment results on a combined pro forma basis.

Media networks segment revenues rose 9.2% to $390.5 million but segment profits fell 7.9% to $109.5 million due to Lionsgate spending more to market a higher number of original series at Starz.

Lionsgate's television production segment revenues fell 18.6% to $156.6 million due to the timing of episodic deliveries, but segment profits rose to 22.3% to $12.6 million.