Lionsgate says it will pull its direct-to-consumer streaming service in seven international markets as the company continues to explore a potential sale of its premium movie network Starz.
The decision to exit the seven countries contributed around $218.9 million of the $1.75 billion in operating losses reported by Lionsgate on Thursday.
Lionsgate offered its global streaming service under the Starzplay brand until September, when the product was relaunched as Lionsgate+. The re-brand did not affect Lionsgate's multiplex movie network and streaming service in the United States, which continues to carry the Starz brand.
All told, Lionsgate said it ended its most-recent financial quarter with 27.3 million global subscribers, an increase of about 1 million compared to the last quarter and a 52% increase from 2021.Of those, 20.1 million subscribe to Starz in the U.S. through cable or streaming, with the remaining 14.8 million subscribed to Lionsgate+ in foreign markets.
Despite this bump, the company said it plans to stop offering Lionsgate+ in Germany, France, Italy, Spain, the Nordics, the Benelux and Japan as it works to streamline the media business ahead of a potential spin-off or sale.
"Economic and industry headwinds are having the greatest impact at Starz, where we are exiting seven international territories," Jon Feltheimer, the chief executive of Lionsgate, said during a conference call with investors and reporters. "This will allow us to streamline Starz’s international business and return it to profitability more quickly while continuing to build on the opportunities created by a strong Starz original series slate and focused content strategy domestically."
Splitting off the media side is seen as one way to help Lionsgate focus on its more-lucrative studio and licensing businesses. On Thursday, Lionsgate said the studio business generated $654.9 million, down slightly from the $666.9 million reported at this time last year. The studio's overall profit was $69.1 million, which was nearly half of the $130.3 million reported last year. Television production accounted for $430.9 million in revenue, a drop from $336 million reported in 2021.
On the production and licensing side, executives said business is good: A new prequel rooted in the John Wick series called "The Continental" was recently sold to Comcast's NBCUniversal for Peacock, where it will be available to viewers in the U.S. next year. This week, Lionsgate said “The Continental” will be available internationally on Amazon Prime Video under a similar licensing agreement.
"The global rollout of The Continental is positioned to be one of the streaming events of 2023," Feltheimer said. "It puts a solid exclamation point on the continued growth of John Wick into one of the world's premier action franchises, driving value across our television and film businesses."
Article updated with U.S./international subscriber count break out.