Starz Adds 1.2 Million Subs, Standalone OTT Nears 1 Million Mark

ENGLEWOOD: In reporting its third-quarter financial results, Starz revealed that subscriptions are up by 1.2 million year on year for the channel, while the standalone OTT service is nearing 1 million subs.

Overall revenue for the quarter increased 1 percent to $407.8 million, operating income decreased 27 percent to $74 million and adjusted OIBDA decreased 22 percent to $89.9 million.

For Starz Networks, revenue was up 6 percent to $348.6 million as a result of rate increases from various distributors, partially offset by lower average subscriptions. Operating income decreased 21 percent to $80.4 million and adjusted OIBDA decreased 18 percent to $92.9 million—primarily due to an increase in programming and advertising costs associated with original programming and the new Starz app, partially offset by the increase in revenue. Cash paid for investment in films and TV content increased by $27.7 million to $76.3 million, due to a greater number of original series in production.

In the distribution segment, revenue was down 7 percent to $60.9 million, while operating income decreased $3.4 million to a loss of $2.5 million and adjusted OIBDA decreased $3.5 million to a loss of $1.7 million. The decreases were primarily due to fewer significant new-release titles from The Weinstein Company. Cash paid for investment in films and TV programs increased $23.4 million to $26.2 million, due to the timing of payments under its distribution agreement with The Weinstein Company.

Chris Albrecht, Starz’s president and CEO, said, “Starz continued its solid operational performance in the third quarter, delivering 6 percent year-over-year revenue growth at Starz Networks, which is the largest increase since the second quarter of 2013. Third-quarter performance also saw year-over-year subscriber growth of 1.2 million customers, with 300,000 added in the quarter, setting a new record high of 24.5 million subscribers for Starz. The third season of Power established a Starz record for viewership, surpassing 7.3 million multiplatform viewers per episode, and helping nearly drive OTT subscriptions close to the 1 million mark. The strong performance of our Amazon and Starz app initiatives complements the Starz Networks business with core distributors. The planned merger with Lionsgate continues to progress, and we are readying for the content opportunities that will come with being a robust combined company.”