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Lions Gate Entertainment's (LGF.A) Starz and Amazon to Partner
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Lions Gate Entertainment (LGF.A - Free Report) recently announced its partnership with Amazon (AMZN - Free Report) to offer Starz and MGM+ bundle to Prime members in the United States at 20% discount to boost subscribers.
This bundle is part of a long-term partnership between both the companies. Starz membership costs $8.99 per month and MGM+ costs $5.99 per month. In this bundle, both would be available for $11.99 per month, which is at 20% effective discount.
Amid the ongoing fight for share in the streaming market, Starz and MGM+ are teaming up to have a larger market share of the market. Starz’s domestic subscribers declined by 1.1 million in the last quarter of 2022, including a decline of 700,000 streaming subs and 400,000 linear subs to stand at 19.9 million (11.6 million streaming and 8.3 million linear).
Starz’s original series include Outlander the Power Universe, P-Valley and the upcoming new seasons of Party Down and Blindspotting. MGM+ originals include drama like Godfather of Harlem starring Forest Whitaker, sci-fi horror series From, Western adventure, Billy the Kid, A Spy Among Friends, War of the Worlds, Rogue Heroes and Belgravia.
Lions Gate Entertainment Corp. Price and Consensus
It spent significantly on premium content for Starz in second-quarter 2023 after the sixth season of Outlander released in May, the second season of P-Valley released in June and The Serpent Queen released in September, all of which have gained a lot of traction.
Despite working on improving its content library, Lions Gate was not able to get the desired results due to economic and industry headwinds, which led to it exit from seven territories in the previous quarter.
In the third quarter, management has been planning to cautiously spend on content and not chase for subscribers and therefore focus on profitability. They would now also look for bundling and packaging opportunities like bundling of Paramount Global (PARA - Free Report) owned Paramount+ and Showtime and the evolution of HBO Max and Discovery+ bundled offering by Warner Bros. Discovery (WBD - Free Report) .
Paramount+ and Showtime is offering its bundle at $11.99 per month while HBO Max and Discovery plus is yet to announce its price point. HBO Max and Discovery plus bundle is expected to charge a premium price as they currently charge $14.99 and $6.99 per month, respectively.
Lions Gate and Starz will be separated by September 2023 as planned. This will help the two core businesses to pursue separate strategic and financial paths, which would ensure better results. Strategies are being made so that both the entities would have a strong balance sheet by the end of the year.
Shares of Lions Gate have declined 19% in the past year, compared with the Zacks Consumer Discretionary sector’s decline of 17.5% in the same period.
Lions Gate reduced its net debt by $42 million this quarter. Cash position was further strengthened in the quarter with the receipt of $43 million from the partial sale of interest in STARZ Play Arabia.
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Lions Gate Entertainment's (LGF.A) Starz and Amazon to Partner
Lions Gate Entertainment (LGF.A - Free Report) recently announced its partnership with Amazon (AMZN - Free Report) to offer Starz and MGM+ bundle to Prime members in the United States at 20% discount to boost subscribers.
This bundle is part of a long-term partnership between both the companies. Starz membership costs $8.99 per month and MGM+ costs $5.99 per month. In this bundle, both would be available for $11.99 per month, which is at 20% effective discount.
Amid the ongoing fight for share in the streaming market, Starz and MGM+ are teaming up to have a larger market share of the market. Starz’s domestic subscribers declined by 1.1 million in the last quarter of 2022, including a decline of 700,000 streaming subs and 400,000 linear subs to stand at 19.9 million (11.6 million streaming and 8.3 million linear).
Starz’s original series include Outlander the Power Universe, P-Valley and the upcoming new seasons of Party Down and Blindspotting. MGM+ originals include drama like Godfather of Harlem starring Forest Whitaker, sci-fi horror series From, Western adventure, Billy the Kid, A Spy Among Friends, War of the Worlds, Rogue Heroes and Belgravia.
Lions Gate Entertainment Corp. Price and Consensus
Lions Gate Entertainment Corp. price-consensus-chart | Lions Gate Entertainment Corp. Quote
Lions Gate’s Change in Strategy to Boost Bottom Line
This Zacks Rank #2 (Buy) company has a vast library of content on Starz. This helps to boost viewership and subscriber for its OTT platform. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It spent significantly on premium content for Starz in second-quarter 2023 after the sixth season of Outlander released in May, the second season of P-Valley released in June and The Serpent Queen released in September, all of which have gained a lot of traction.
Despite working on improving its content library, Lions Gate was not able to get the desired results due to economic and industry headwinds, which led to it exit from seven territories in the previous quarter.
In the third quarter, management has been planning to cautiously spend on content and not chase for subscribers and therefore focus on profitability. They would now also look for bundling and packaging opportunities like bundling of Paramount Global (PARA - Free Report) owned Paramount+ and Showtime and the evolution of HBO Max and Discovery+ bundled offering by Warner Bros. Discovery (WBD - Free Report) .
Paramount+ and Showtime is offering its bundle at $11.99 per month while HBO Max and Discovery plus is yet to announce its price point. HBO Max and Discovery plus bundle is expected to charge a premium price as they currently charge $14.99 and $6.99 per month, respectively.
Lions Gate and Starz will be separated by September 2023 as planned. This will help the two core businesses to pursue separate strategic and financial paths, which would ensure better results. Strategies are being made so that both the entities would have a strong balance sheet by the end of the year.
Shares of Lions Gate have declined 19% in the past year, compared with the Zacks Consumer Discretionary sector’s decline of 17.5% in the same period.
Lions Gate reduced its net debt by $42 million this quarter. Cash position was further strengthened in the quarter with the receipt of $43 million from the partial sale of interest in STARZ Play Arabia.