Lionsgate’s Beeks Touts Redbox Deal, TV DVD and Digital

11 Aug, 2009 By: Erik Gruenwedel

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Steve Beeks, president and co-COO of Lionsgate, said in an Aug. 11 analyst call that the widely publicized decision to distribute titles through Redbox had been carefully planned and would have little impact on sellthrough.

“We believe the Redbox model will ultimately expand the business by increasing the number of impulse rentals and by putting packaged media rental opportunities in places where none existed previously,” Beeks said. “And it should accomplish this without a dramatic impact on sellthrough.”

The executive said the ongoing cable TV success of “Weeds” and “Mad Men” continue to favorably affect packaged media sales.

“[‘Weeds’] is doing so well (four seasons have been released on DVD) that we estimate it will ultimately reach $100 million in home entertainment revenue from its first seven seasons,” Beeks said. “‘Mad Men’ will generate $20 million in sales on Blu-ray and standard DVD for its first two seasons.”

He said digital revenue in the first quarter increased 68% from a year ago, with video-on-demand revenue now representing 10% of theatrical box office.

“The good news [regarding rentals] is that consumer transactions are up,” Beeks said. “The same is true with digital, which is why we’re so aggressive with all of the digital retailers.”

Overall first-quarter revenue increased 30%, to $388 million, from $298.5 million last year, reflecting strong growth in television production, overall motion picture group revenue, highlighted by a strong performance from Mandate Pictures, and new revenue of $27.8 million from TV Guide Network and TV Guide.com.

Lionsgate co-chairman and CEO Jon Feltheimer said the studio remained upbeat regarding new acquisition deals for TV Guide Network and nascent cable pay-TV/online channel Epix with partners Paramount Pictures and Metro-Goldwyn-Mayer.

The studio said its content commitments to Epix, which launches Oct. 1, exceeded $40 million.

“The real story this quarter was the continued strong growth of our diversified asset base,” Feltheimer said.

Lionsgate announced its financial results Aug. 10.

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