Lionsgate, Beeks Project Strong 200923 Dec, 2008 By: Erik Gruenwedel
Lionsgate, like most studios and media companies, enters 2009 with one eye on the economy and the other firmly on the bottom line. The Santa Monica, Calif.-based mini-major in 2008 grew revenue (up 30%) and market share significantly (from 5.5% to 7.7%), in addition to maintaining steady margins.
“We now have major-studio-level market share,” said Steve Beeks, president and co-COO.
Approaching year’s end, home entertainment was poised to generate $700 million in revenue. Library sales, which included international, home entertainment and TV, was expected approach $300 million.
The company, which employs about 550, continues to claim the highest box office-to-DVD conversion rate of any studio in the industry. It manages this through a combination of brand management and releasing films in a strategic "sweet spot," which involve ‘R’-rated and edgier ‘PG-13’-rated films that sustain box office revenue from $30 million to $70 million each.
DVD and Blu-ray releases of The Bank Job, The Forbidden Kingdom, Meet the Browns and Rambo, among others, plus video-on-demand (VOD) and digital, helped boost home entertainment revenue in the most recent quarter 32%, to $178.3 million, from $135.2 million during the prior-year period.
Strong DVD sales of the third season of television series “Weeds” ($6 million) and first season of “Mad Men” ($5 million) also contributed to the results.
Beeks, a longtime proponent of Blu-ray Disc, said BD player and software sales since Black Friday in November provided a bellweather curve for the overall home entertainment business and presented, in his view, an encouraging sign of where home video is going.
“All the studios have said that we needed a reasonably priced player, and as you can see from the consumers response, not only did they jump on the [lower-priced] hardware, they jumped on BD movies as well,” Beeks said.
The executive said the studio noticed a “huge jump” in Blu-ray movies, with sales up significantly over the last few weeks for both new releases and library.
We still think that all [industry] HD packaged-media sales will come in at about $850 million to $900 million,” Beeks said. “As recently as a few weeks ago, some people were writing that off and indicating it might be as low as $750 million.”
Top-performing Blu-ray movies for Lionsgate over the year include The Forbidden Kingdom, all the “Rambo” titles, 3:10 to Yuma, The Bank Job and several catalog titles that registered four or five times what their DVD sales were, according to Beeks.
“Blu-ray is projected to be 10% of home media revenue, and The Dark Knight is projected to be 17% of all packaged-media revenue,” he said. “We are planning on Blu-ray being at least 15% of [our] next month’s revenue.”
Key January titles include Bangkok Dangerous, My Best Friend’s Girl, Disaster Movie, Saw V and Tyler Perry’s The Family That Preys.