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Lionsgate CEO Lauds Packaged Media in France

5 Oct, 2010 By: Erik Gruenwedel

Citing changing consumer demands for entertainment consumption, Lionsgate CEO Jon Feltheimer Oct. 5 urged media companies to better connect with their customers through social media and related technologies.

Delivering a keynote at the annual MIPCOM digital entertainment confab in Cannes, France, Feltheimer said studios, television networks and distributors could do a better job establishing relationships with new media pioneers such as Facebook founder Mark Zuckerberg.

“We need to create new relationships ... with people who install telephone lines … build mobile networks … [and] connect millions of people through bits and bytes,” Feltheimer said. “And, when we speak to them, we need to monetize these relationships... and the problem is we don't know how.”

Feltheimer said Santa Monica, Calif.-based Lionsgate has done a good job targeting the increasingly niche consumer underscored by the success of the mini-major’s Tyler Perry movies, multi-platform pay-TV service Epix, TV DVD releases of “Mad Men” and “Weeds” and over-converting (from theatrical) packaged media business.

The studio’s three over-converting DVDs (high home entertainment revenue compared to theatrical) in the most recent quarter included Daybreakers, From Paris With Love and The Spy Next Door. This year, VOD/digital has accounted for $8 million, or 22% of Lionsgate’s overall home entertainment revenue. In 2006 digital and VOD accounted for about $3.4 million, or 5% of the home entertainment revenue.

The CEO, who was set to receive a “Personality of the Year” award in the evening, could use the praise considering he remains in the crosshairs of activist shareholder Carl Icahn. The renegade Wall Street financier has been unrelenting in his unsolicited buyout efforts of Lionsgate common shares.

Icahn, who is also playing a key role in Blockbuster’s exit from bankruptcy, has been critical of Feltheimer’s leadership, Lionsgate’s board of directors, bloated overhead and related expenditures.

Lionsgate’s board last month again rejected Icahn’s $7.50-per-share offer, arguing the studio had turned corner following the positive box office results from recent theatrical releases The Expendables and The Last Exorcism.

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