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Lions Gate (LGF.A) Eyes Strategic Partnerships for Growth

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Lions Gate (LGF.A - Free Report) has been pursuing strategic acquisitions and alliances to enhance its competitive position and maximize returns.

The company recently partnered with BBC Studios Los Angeles to co-produce and build original scripted series and formats for the U.S. market.

With this partnership, the company aims to bring the expertise of BBC Studios, which per Lions Gate management, “is known for showcasing the best content with British DNA”  to the U.S. audience and beyond.

Notably, BBC has been working with U.S. titans like HBO, Starz and AMC on high-end projects for quite some time now. BBC is best known for its successes with scripted formats such as Getting On and The Night Of on HBOas well as unscripted ones like Dancing with the Stars on ABC and Life Below Zero on National Geographic Channel

Lions Gate, which seeks to build a diversified portfolio for future growth, stands to benefit from the premium content and creativity of the British brand. The number of formats and intellectual property that the company will gain from the alliance makes us optimistic.

Partnerships — A Growth Driver

Lions Gate has been gaining from its focus on profitable areas and strategic buyouts like that of Starz. These are helping the company to emerge as a major player in the TV space and regain lost ground in streaming network.

The company is trying hard to keep pace with changing consumer preference in terms of content. We note that evolution of alternative motion picture distribution channels such as home video, pay-per-view, streaming services, video-on-demand, Internet and syndicated and broadcast television is a growing concern.

However, the company’s increasing partnerships with the likes of Universal Music Group (UMG) and 3 Arts among others is anticipated to provide significant boost to the top line. The company partnered with UMG to create music-based TV projects. The deal provides Lions Gate exclusive access to UMG’s ideas and concepts before making it available to other studios.

Furthermore, Lions Gate and Universal Music Publishing Group (UMPG) also entered into an agreement wherein the latter is responsible for the company’s music publishing segment globally.

We believe Lions Gate’s strategy to emerge as a major player in the TV space will enhance its competitive position. Notably, the motion picture industry is highly competitive with the presence of players like Comcast Corporation (CMCSA - Free Report) , Twenty-First Century Fox, Inc. (FOXA - Free Report) and Viacom Inc. .

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