Video Helps Lions Gate Turn Q2 Profit9 Nov, 2004 By: Erik Gruenwedel
Video releases of The Punisher, Dirty Dancing: Havana Nights, Godsend, Barbie as The Princess and the Pauper and season three of NBC comedy “Will & Grace” helped Lions Gate Entertainment post a considerable profit in the fiscal second quarter ended Sept. 30.
The company posted second-quarter net income of $8.3 million, compared to a loss of $300,000 during the same period last year.
The studio shipped 2.8 million units of The Punisher with sellthrough expected to top 2.5 million units by end of the year, said Steve Beeks, president of Lions Gate Home Entertainment during last week's financial call.
The home entertainment division expects to have a state-of-the-art DVD replication deal in place by the end of the year.
“Three major duplicators are competing on the deal,” said Lions Gate Entertainment CEO Jon Feltheimer.
Meanwhile, the company is taking steps to secure a stake in the evolving video-on-demand (VOD) and pay-per-view markets with the imminent hire of a top executive from the cable industry, Feltheimer said.
The Santa Monica, Calif.-based studio, which generated $45.5 million in quarterly revenue from catalog titles, sees increased cable distribution of niche genres such as horror as a growth potential, he said.
“Our little movies — The Cooler, Girl With a Pearl Earring, Monster's Ball — on a relevant basis do very well in VOD or pay-per-view,” Feltheimer said. “I would think we would be able to outperform the market [in those areas].”
Spearheaded by the theatrical releases of the shark thriller Open Water, the urban comedy The Cookout and the political documentary Fahrenheit 9/11, Lions Gate posted total revenue of $231.1 million — up 148 percent from comparable quarterly revenue of $93.1 million last year.
Motion picture revenue, which included home entertainment, was $202.8 million (up 205 percent from the same period last year), while TV revenue was up 8 percent to $26.9 million — based largely on cable shows “The Dead Zone” and “Missing.”
Lions Gate continues to be impressed with the box office appeal of Saw — originally tracked to generate about $18 million in revenue — which is now projected to make $100 million in domestic revenue.
As a result, Lions Gate inked a deal with Saw producer Twisted Pictures for nine new genre films.