UPDATED: Starz CEO Jeff Hirsch said “mid-budget films play better on our service than anything else,” as per the exclusive first-window output deal for Lionsgate and Summit films announced this morning.
“Movies are important to our service. Big box office movies drive a lot of acquisitions and conversions,” he said on a Q&A at a Morgan Stanley media conference Tuesday afternoon. “It’s also great that I can walk across the street with [Motion Pictures Group chairman] Joe Drake and say ‘Look, how did this perform, can we make another one?’”
Growth, however, is mainly driven by original series. How many? Sixteen, he said. “We will have 12 this year, rising to 16 next year.”
Hirsch describe Starz as he has in the past as a “B-tier” service, focused on adults led by Black women, without sports news or kids’ fare. An A-tier service – the usual suspects – would bank between 200 to 300 million subscribers, he said. The B-tier would come in at 20% to 40% of that (so anywhere from 40 to 120 million subs).
Starz cable and streaming assets stood at about 27 million when it announced its latest earnings in February, over half from streaming. It’s going for 60 million overall by 2025, the vast majority expected to be streaming. It costs $8.99 in the U.S., which Hirsch said is key. “Over ten [dollars] is always an ‘either-or’ decision. If it’s below ten, it’s an add on.”
Lionsgate and its premium subscription platform Starz have closed a multiyear, exclusive first window output deal for all theatrically released Lionsgate and Summit label films when current agreements expire at the end of 2021 and the end of 2022.
The agreement will bring Starz franchises including John Wick as well as Borderlands, White Bird: A Wonder Story, Are You There God, It’s Me Margaret, Hunger Games prequel The Ballad of Songbirds & Snake and future installments of the Saw franchise.
Lionsgate CEO Jon Feltheimer called the agreement “the next logical step in capitalizing on the combination of our two companies. It gives our brands and franchises an exciting new platform home, accelerates the convergence of our studio and platform businesses and will support Starz’s continued growth into one of the world’s leading premium subscription platforms.”
Starz has 28 million subscribers, more than half are streaming subscribers. It offers more than 7,500 premium television episodes and feature films.
“We’re pleased to continue deepening our premium content offering for our subscribers with Lionsgate’s highly anticipated films featuring some of today’s biggest stars,” said Alison Hoffman, President of Domestic Networks for Starz. “Combining our strong slate of original programming focused on narratives by, about and for women and underrepresented audiences with Lionsgate’s diverse pipeline of both commercially successful and critically acclaimed franchises further enhances the value proposition we bring to our subscribers and partners.”
“We are immensely proud of our exciting, commercially broad and creatively varied film slate,” said Lionsgate Motion Picture Group Chairman Joe Drake. “With a focus on attracting A-list storytellers and stars to collaborate on a slate filled with big branded entertainment, Lionsgate’s content strategy amplifies and aligns perfectly with Starz’s premium high-end programming.”