Lionsgate on a growth roll
Studio plans to build on its successful franchises, genres
By Jennifer Netherby -- Video Business, 7/10/2006
JULY 10 | SUMMERLIN, Nevada—Coming off a breakthrough year that saw the indie studio’s first Best Picture Oscar win for Crash and revenue approaching $1 billion, Lionsgate showed retailers at its annual sales summit an ambitious slate building on its core strengths in horror, teen comedies and urban films.
“As we grow, one thing that will remain constant is that we will focus almost entirely on genres that perform disproportionately well on home entertainment,” Beeks said.
Going into 2007, Lionsgate will continue its emphasis on horror, releasing a special edition of Saw II timed to coincide with the theatrical release of Saw III around Halloween; teen movies including upcoming Jessica Simpson starrer Employee of the Month; the next Tyler Perry film, Daddy’s Little Girl; and a ramped up TV show slate with nine primetime series on the 2006/’07 schedule.
But the studio also will move into new niches including action, with adrenaline rush Crank and Rogue, with Jet Li. On the family side, Lionsgate will release its first-ever animated theatrical, Happily Never After, which twists the fairy tale Disney ending and comes from the producers of Shrek.
And for its next awards bid, Lionsgate will release in theaters this fall Trade, a Kevin Kline starrer tackling the modern day worldwide trade in humans.
The studio has committed to expand its business in Latino films, with plans to release about four titles per year in an effort to reach the 40 million-plus Hispanics in the U.S. It will focus on contemporary Mexican cinema and telenovelas, among other genres.
Lionsgate said it is benefiting from shifts in consumer spending. The studio shared internal research that shows after years of most video business being done on the new release wall, consumers are increasingly renting and buying niche films, catalog movies and smaller box-office films.
In the last three years, mid-size movies accounted for all of the growth in DVD sales, research director Michael Youn said. At the same time, disc sales on films with a box office more than $50 million decreased by 1% a year.
In 2005, mid-size box-office films accounted for just 25% of box office revenue but 47% of video revenue, Lionsgate said. Catalog also is on the rise.
The studio believes that consumer spending on DVDs will remain steady through 2010 even as video-on-demand and digital downloads increase in size. By 2010, Lionsgate projects that packaged media will account for 85% of home entertainment sales versus 90% today. The other 15% of revenue will come from VOD and digital downloads.
On the rental side, the studio expects spending to slide 1% a year through 2010. But Lionsgate remains committed to supporting rental retailers, executive VP of sales Jed Grossman said, drawing cheers from the crowd.
Part of that includes a bountiful DVD premiere slate, including Man About Town, starring Ben Affleck and Rebecca Romijn, and House of the Dead 2.
Newly promoted exec VP and general manager Ron Schwartz closed the Sunday afternoon sales pitch with trailers from the studios upcoming theatrical slate, including music documentaries Leonard Cohen: I’m Your Man and U.S. vs. John Lennon, thriller Bug, with Ashley Judd and Harry Connick Jr., Crank and Trade.
NBA Hall of Famer and motivational speaker Bill Walton opened the gathering of about 150 retailers Sunday at the Red Rock Hotel and Casino Resort on the outskirts of Las Vegas.
