Steve Beeks: 'Insurgent' Saw 25% Uptick in Disc Sales in the U.K.

7 Aug, 2015 By: Erik Gruenwedel

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Executive says home entertainment eyeing 2% growth for the year

The recent retail release of 'Insurgent' is proving to be a winner for Lionsgate. Released digitally July 21 and on disc Aug. 4, the sequel in “The Divergent Series” teen franchise based on the book trilogy by Veronica Roth, is exceeding expectations — especially on disc.

Speaking on Lionsgate's Aug. 7 fiscal call, Steve Beeks, co-COO and president of the motion picture group, said that despite maturation in packaged media, disc sales of Insurgent are strong.

“We saw U.K. results up as much as 25%,” Beeks said. “Those are great signs.”

Lionsgate first-quarter (ended June 30) home entertainment revenue declined 8% to $129.5 million, from $140.9 million a year ago, due in part to one less theatrical retail release compared with the previous-year period, which featured The Hunger Games: Catching Fire.

That title generated $111.3 million in disc sales last year, and has sold another 433,000 units this year for $4.6 million, excluding digital, according to The-Numbers.com.

Beeks reiterated that the relatively flat half-year market results from DEG: The Digital Entertainment would increase to about 2% growth for the year, including a 5% uptick digitally. 

“The DEG numbers show what we believe is strength in the home entertainment market overall,” Beeks said.

Meanwhile, in a week that saw media stocks hammered following investor concerns about pay-TV subscribers, advertising and burgeoning over-the-top video, CEO Jon Feltheimer said Lionsgate remains largely immune as a pure content creator.

Owner of TV hits “Mad Men,” "Weeds” and “Manhattan,” in addition to Netflix mega hit “Orange Is the New Black,” Lionsgate is on tap to produce 20 episodic series this year.

“The disruption in the marketplace plays to our natural strengths as a global content company,” Feltheimer said. “Whether it’s a fat [pay-TV channel] bundle, skinny bundle or no bundle at all, the bottom line is people are watching more content and spending more dollars across more distribution platforms than ever before.”

Indeed, the company’s TV production unit grew revenue 14% to $133.6 million, compared with $117.5 million in the prior-year quarter. Sales were driven by a 73% increase in international TV revenue, due in part to licensing revenue from the first three seasons of “Orange Is the New Black.”

“In the [evolving distribution] world we are going into, that flexibility to do different content products with different kinds of partners gives us a big leg up. I think we are pretty good at that,” Feltheimer said.

Television group chairman Kevin Beggs said that while Netflix is the clear SVOD category leader, that dynamic still creates opportunity for competitors such as Hulu Plus and Amazon Prime Instant Video. Lionsgate is creating content for both services.

Separately, Sony-owned Crackle.com is entering the drama market with Lionsgate-produced series “The Art of More,” starring Dennis Quaid and Christian Cooke.

Beggs said SVOD services need “network defining” series to distinguish themselves and be competitive. He the current trend sees old media jumping to the head of the line in the new media world.

“It’s really happening. I [also] think it’s putting huge pressure on international media buyers who are responding to Netflix with their own SVOD strategies — and looking for English speaking series, name brand showrunners or U.S. distribution partners,” he said.

Finally, Lionsgate announced it is partnering with Hasbro to bring the game maker’s “My Little Pony” franchise to the big screen. Lionsgate will be distributing and marketing the film globally (except in China). Tony and Emmy Award-winning actress Kristin Chenoweth will voice a new character in the film, which is Hasbro’s first animated feature.

Separately, Lionsgate is partnering with game developer Starbreeze to launch a first-person shooter game in virtual reality based on box office hit John Wick, starring Keanu Reeves.

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