Lionsgate Likes Same-Day VOD, DVD Tests12 Feb, 2007 By: Erik Gruenwedel
Lionsgate appears pleased with ongoing two-market tests with Comcast Communications regarding releasing movies on video-on-demand (VOD) and DVD simultaneously.
The Santa Monica, Calif.-based mini-major, along with other studios, has been participating in tests since last fall.
“So far we have seen no cannibalization of the expected [DVD] sales rate and very little impact on rental in the test markets compared to the controlled markets,” said Steve Beeks, president of Lionsgate, in a Feb. 12 investor call.
Beeks said the tests would continue for another two weeks for further review and did not indicate a switch in the studio's DVD release window strategy regarding cable was imminent.
CEO Jon Feltheimer said “every way [the studio] windows” its movies is under review and believed Lionsgate's independent status endeared itself to such experimentation.
“The breadth of conversations with Comcast is far greater than just should we do another [distribution] channel,” said Feltheimer.
The studio has electronic sellthrough and broadband video-on-demand deals with CinemaNow, Movielink, Amazon's Unbox, Fox Interactive Media, Xbox Live, Netflix, Wal-Mart and Monday's announcement with Apple's iTunes.
Feltheimer said Lionsgate has sold 600,000 episodic downloads of its Showtime series “Weeds,” in addition to 400,000 DVDs.
Beeks said Lionsgate, since last year, has a 11% market share for all titles released in the Blu-ray high definition format, beginning with The Descent last December.
He said the studio has released 18 titles in the format and plans to have up to 50 titles in release by the end of 2007.
Last week, Lionsgate cited strong television and foreign sales of horror film Hostel, Tyler Perry's Madea's Family Reunion, The Punisher, Crank and the “Saw” franchise when posting third quarter (ended Dec. 31) income of $20.5 million, compared to profit of $3.1 million during the same period last year.
Total revenues for the Santa Monica, Calif.-based mini-major, which included a 9% increase in motion picture revenue to $221.6 million, surged 11% to $254.5 million from $229.3 million last year.
Home video revenue, the largest component of the studio's motion-picture segment, topped $113.6 million, a 2% decline from $115.9 million last year.
Lionsgate reiterated that the bulk of its DVD release slate is skewed toward the end of fiscal year 2007 (March 31).
Principal DVD drivers in the quarter included Akeelah and the Bee, An American Haunting, the 15th anniversary special edition of Reservoir Dogs, The Descent, Saw II and See No Evil.
In January, Lionsgate shipped nearly 12 million combined DVD units of Crank, Employee of the Month, Saw III and The Incredible Iron Man, the most for one month in the studio's history.