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Lionsgate Says It Will Focus on Niche and Catalog

16 Jul, 2007 By: Thomas K. Arnold



LAS VEGAS — Touting what they say is a dominant share of the catalog market, Lionsgate executives in their annual mid-year summit with key retailers outlined a market-driven strategy for the future — a future in which mainstream product, and mainstream DVD consumers, will be less significant than ever before.

Lionsgate president Steve Beeks also announced the company in fiscal year 2007 posted consolidated revenue of $976.7 million, up from $945.4 million the previous year. Of that, the largest chunk, $538 million, came from home entertainment, $8 million more than in fiscal year 2006.

“We started out as a small company in Canada, and we are now the largest independent in the United States,” Beeks said. He noted that the company recently expanded into the United Kingdom and has plans to move into Australia in the coming months.

“Since the acquisition of Artisan in December 2003, every division of the company has experienced rapid growth,” Beeks said.

Beeks said Lionsgate should finish the new fiscal year with about $400 million in box office revenues. Overall company revenues for fiscal 2008, which ends March 31, 2008, are expected to exceed $1 billion.

In its core home entertainment business, Lionsgate through June 24 claims a 6% market share, sellthrough and rental combined, right behind the six majors, Beeks said. Lionsgate's catalog business is expected to grow to $201 million this fiscal year, up from $178 million in 2006, Beeks said.

The minimajor's research chief, Michael Youn, noted that as the DVD business plows ahead in its mature phase, the core 13-50 demographic is spending less, while younger children and consumers over the age of 50 are spending more. Research shows consumers in the once-hot 13-50 demographic are expected to spend $1.2 billion less on DVD this year than in 2004, while consumers under the age of 12 will likely spend $1 billion more and the 50-and-up set will likely spend $200 million more.

Generally categorized among the late adopters, kids and older adults have significantly increased spending on niches like family, action, horror, fitness and Christian DVDs over the last two years, Youn noted, and also have shown a greater propensity to buy catalog product — particularly premium-priced collections and boxed sets, both of movies and of TV shows.

Accordingly, Lionsgate leads all studios in catalog unit growth — the studio upped its unit shipments by 29.1% between 2005 and 2006 — and also will focus more on these and other niche markets, while continuing to release mid-range theatrical features with a continued emphasis on horror.

Home video highlights for the remainder of the year include Delta Farce, a comedy with Larry the Cable Guy that grossed $8 million theatrically; the $7 million theatrical action thriller The Condemned, with WWE star Stone Cold Steve Austin; Away from Her, a festival favorite about the effects of memory loss on an aging couple that stars Julie Christie and Olympia Dukakis; and Bugs, a horror film with Ashley Judd and Harry Connick Jr. from Oscar-winning director William Friedkin, of The Exorcist and The French Connection fame.

Also in the pipeline: the brutal torture film Captivity, with Elisha Cuthbert, which opened the July 13 weekend on more than 2,000 screens and will hit DVD Oct. 30, just in time for Halloween; Doctor Strange (Aug. 14), the fourth in a series of animated films based on Marvel Comics characters that have sold a combined total of more than 2.5 million units; the direct-to-video sequel Stir of Echoes 2 (Nov. 20), with Rob Lowe; and the thriller Shattered, with Pierce Brosnan playing a bad guy who kidnaps a couple's daughter and instead of ransom wants to destroy their lives.

Lionsgate also will distribute Xenon Pictures' “Snoop Dogg's Hood of Horror,” a hip-hop horror trilogy that premiered at the Los Angeles Film Festival.

Former Marvel Studios CEO Avi Arad introduced another upcoming Lionsgate release, “Bratz: The Movie” – which he described as “'The Breakfast Club' meets ‘Bring It On.’ The first theatrical and live-action “Bratz” release opens the weekend of Aug. 3 on more than 2,500 screens and will be heavily promoted on DVD in the fourth quarter selling season.

Lionsgate also intends to further exploit its Tyler Perry franchise, which has resulted in DVD sales of some 18 million units over the last two years. Two new theatrical films are in the pipeline: Why Did I Get Married, opening Nov. 16, and Meet the Browns, coming in February 2008. The franchise also includes a new play, What's Done in the Dark, and the “House of Payne” TV series, which debuted June 6 and has resulted in a 100-episode pickup from TBS.

Lionsgate's partnership with Studio Canal will bring three new series: a Director's Series, focusing on the works of such legendary directors as Alfred Hitchcock, Jean Renior and Jean-Luc Godard; a Celebrity Series, focusing on such big-screen icons as Brigitte Bardot, Catherine Deneuve and Sophia Loren; and the Meridian Collection, launching in 2008 and featuring acclaimed and influential films from around the world.

Lionsgate also intends to step up its activities in the faith-based and Latino markets. Coming up in the Christian arena are The Case for Christ, based on Lee Strobel's best-selling books of the same name, and Max Lucado 3:16, based on the author's new book, which is shipping more than 1 million units worldwide. In the Latino market, Lionsgate has assembled a group of telenovela actors in a new film called Ladron Que Roba a Ladron (“Thief Who Robs Thief”), an “Ocean's Eleven”-style action comedy opening on the big screen Aug. 31.

Also headed for theaters are Trade, a film from producer Roland Emmerich (Independence Day) on human trafficking; Saw 4, the fourth film in the brutal torture franchise, opening in theaters Oct. 26; two films starring Jessica Alba, Good Luck Chuck (a romantic comedy opening Sept. 21) and The Eye (a horror thriller opening Feb. 1, 2008); Sylvester Stallone's John Rambo; the martial arts thriller War, opening in theaters Aug. 24; and, from the producers of Walk the Line, the Western 3:10 to Yuma, with Russell Crowe and Peter Fonda, opening Oct. 5.

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