Steve Beeks: Lionsgate Bullish on Home Entertainment

30 May, 2014 By: Erik Gruenwedel

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Despite a 11% drop in home entertainment revenue in its most recent fiscal year, Lionsgate remains positive on the market going forward, according to Steve Beeks, co-COO and president of the motion picture group.

Home entertainment revenue from both motion pictures and television content declined to $863.9 million from $964.1 million, due primarily to fewer releases. Indeed, in the fourth quarter, Lionsgate released four titles on disc compared with six in the prior-year period, which included The Twilight Saga: Breaking Dawn — Part 2 and The Hunger Games.

Speaking May 30 on the mini-major’s fiscal call, Beeks said the reduced home entertainment revenue in the quarter and fiscal year was largely due to the timing of releases and slate of titles.

In fiscal 2013, Lionsgate had 19 major releases compared with 13 in fiscal 2014, which ended March 31. In addition, Beeks said revenue from subscription video on demand services such as Netflix tends to be “lumpy,” meaning it can consolidate in one quarter versus over several fiscal periods.

He said that through the first five months of 2014, home entertainment consumer spending is flat with a year earlier, which Beeks characterized as “great” news for the industry.

“We haven’t really seen any softness in home entertainment overall,” he said.

In fact, Beeks said ongoing consumer adoption of digital movie sales, early availability ahead of packaged media, the launch of Comcast’s digital storefront and the UltraViolet cloud-based platform combine to drive the market.

The executive said Lionsgate is seeing margin growth in operating dollars on studio releases. He said operating margin dollars on The Hunger Games: Catching Fire will be 90% of the original Hunger Games, underscoring the growth of digital sellthrough.

“We’re fairly bullish on home entertainment,” Beeks said. “The growth in digital is really the exciting thing happening in home entertainment.”

 

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