Q1 2021 Lions Gate Entertainment Corp Earnings Call
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Please press Star then zero as a reminder, this conference is being recorded.
Now I'll turn the conference over to our holes executive Vice President and head of Investor Relations James Marsh. Please go ahead.
Afternoon. Thank you for joining us for the Lionsgate fiscal 21 first quarter conference call will begin with opening remarks from our CEO, John tell timer fall by remarks from our CFO Jimmy barge.
After their remarks, we'll open the call for questions also joining us on the call today, our Vice Chairman Michael Burns.
Hello, Brian Goldsmith.
Chairman of the TV group, Kevin bags, and chairman of the motion Picture Group, Joe Drake and from stars, we have president and CEO, Jeff Hirsch CFO, Scott Mcdonald and he VP of International Supernovae Kelly.
Matters discussed on this call include forward looking statements, including those regarding the performance of future fiscal years, such statements are subject to a number of risks and uncertainties actual results could differ materially and adversely from those described in the forward looking statements as a result of a variety of factors.
This includes the risk factors set forth in Lionsgate. Most recent annual report on form 10-K as amended in our most recent quarterly report on form 10-Q.
With the FCC.
The company undertakes no obligation to publicly released the result of any revisions to these forward looking statements that may be made it to reflect any future events or circumstances I'll now turn the call over to John John.
Good afternoon. Thank.
Thank you James and thank you all for joining us I hope, everyone has things safe and healthy.
We completed the quarter with strong financial results in an extraordinary environment in which our priorities were evident.
Monetizing our film and television library.
Embracing innovative distribution strategies for films and acquiring new properties, while renewing others. Most importantly, it was a quarter in which we continue to use our content engine to create a unique valuable and scalable global streaming platform at Starz.
As I go through a recap of the quarter one message stands out.
Our programming at Starz is working.
The identity of the stars brand is resonating.
The growth of its domestic over the top business is robust its international platform unsuccessfully differentiating itself at a critical inflection point in the marketplace.
And the proposition that bringing lionsgate and Starz together allows us to accelerate the growth of our direct to consumer offering by using the full portfolio of our resources is fulfilling its prom.
Let's start with the quarters highlight.
Darren programming drove domestic streaming paid subscribers to an all time high of 7.4 million in the quarter.
Internationally Sars continues to establish itself as a must have service with continued subscriber growth and expanding distribution footprint.
And a best of global Escalade content strategy that is resonating with consumers and platform partners alike.
Globally, we reached 11.4 million over the top subscribers in the quarter and our growth trajectory is on target for 13 to 15 million over the top subscribers by the end of the fiscal year.
It was a productive quarter for our Lionsgate television group has all five of our new series were renewed with love life, becoming the second most watched series on Hbr man.
We entered a lucrative multifaceted syndication deal for Mad men.
With Amazon Prime internationally, Amazon's, I, MDB, TV domestically AMC and Starz play.
We are readying, our next big property weeds for syndication in the fall.
And on the heels of last year's record revenue. Our library continued its outsized performance in the quarter as we continue to capitalize on demand for content.
Turning to our individual businesses.
Sars continues to differentiate itself as the home for programming for women African American and Latin next audiences, who have been underserved in the premium TV landscape.
The outland or franchise is stronger than ever rounding out its fifth season with record multiplatform viewing as it became the number one original series on premium for women.
We also successfully launched two new series in the quarter.
The crime drama high town from creator, Rebecca cutter and producer Jerry Bruckheimer premiered to an all time high for New series on the stars App and grew 33% from its series premiere to its final episode.
Its record was broken just a few weeks later when cutlery halls, P. Valley launched to rave reviews that of propelled the audience growth week over week since its premier a rare feed among new shows.
Both series are squarely in our wheelhouse of Bull provocative programming that is unique within the premium space.
And both have been renewed for second seasons, where our research shows that we often see outsized subscriber growth.
Understanding the importance of the power franchise, our Lionsgate television group is doing a great job getting the next two power serious ghost and raising cane and ready for their scheduled launches as our vertical integration gives us an important element of control over the production of our shows.
We're also expanding the world of Outland with the new doctors series, many guilt, starring Sam Human and Graham Mactavish.
Going forward, we're continuing to open the creative aperture with a combination of exciting new series, including the comedy run the world from Dear White people, the Bentley Baltzer and returning favorites the girlfriend experience from Steven Soderbergh, and the Spanish Princess which follows in the footsteps of critically acclaimed right.
Clean and the White Princess.
It was also a strong quarter internationally.
Hanting our flag early in many countries gave starz play the opportunity to develop relationships with a growing list of established distribution partners and secure an enviable pipeline of exclusive world class content to deliver on our best of global Aethlon strategy.
We've positioned ourselves at the destination for premium programming by Curating, a portfolio of provocative edgy series, including normal people the great Rami and killing Eve shows that have garnered a total of 17 Emmy nominations.
Along with iconic library series, such as Mad men and our full slate Starz originals with star play now, becoming the exclusive worldwide home of the power units.
Earlier this week start by announced its partnership with sister company, leading Spanish language streaming service pants higher for a slate of original local language titles that reflects our focus premium approach.
Exciting new series ranging from the thriller crime drama expressed from renowned storytellers Ivan Escobar.
Two addictive period pieces, such as senior into Mexico, and an unfiltered look at the life of international points Star Nacho The Dol.
With a track record of success at Pantilione films strong subscriber growth at pants higher and the ability to create the best in Spanish language programming as evidenced by our 11 recent in Manhattan Award nomination.
This is a vertical where we can create exceptional value as a true market leader.
Starz play of content strength has made it a must have service on third party platforms as evidenced by the most recent launches on Roku, Apple TV plus and rackets in.
And it's fueling the growth on our own Starz play App, which we launched in three additional countries.
Our bespoke relationships now encompasses 58 different international partners, who recognize the appeal of our offering and his collaboration will continue to serve as an enduring competitive advantage.
To sum up the transition to digital at Starz continues to accelerate the.
The majority of revenue from our traditional businesses migrated to our car.
We've executed a successful content strategy and we're continuing to grow a valuable scalable global streaming platform with unique characteristics that set us apart.
Turning to our motion picture group. It was an active quarter will remove major franchises forward resumed theatrical production and demonstrated the flexibility and optionality of our slate.
There's good news on the hunger games front.
Suzanne calling valid songbirds and snakes has been a smash success.
Billing more copies than any other book released in the United States in the first six months of the year.
With all of the excitement around the franchise sales of the hunger game titles in our library are experiencing growth beyond expectations.
We're working closely with Suzanne and the rest of the hunger games team to get the movie ready for production.
We're also busy preparing scripts for the next two installments of our John Wick action franchise with John Wick for slated to hit theaters Memorial day weekend 2022.
We hope to shoot both John Wick, four and five back to back when Ziana becomes available early next year.
And to reveal one of the worst kept secrets in Hollywood.
We're pleased to confirm that Jennifer Gray will both executive produce and star in a new Dirty dancing movie for Lions gate from warm bodies director Jonathan Levine.
It will be exactly the kind of romantic storage. It movie that the franchises fans have been waiting for and that had made at the biggest selling library title in the company's history.
With the appetite for fresh content at an all time high in options for consumers dwindling due to the global shut.
We made a strategic priority will be one of the first major studios back into production.
Over the past five months, we put together a thoughtful strategy to restart production with protocols to best ensure the safety of cast and crew.
We recently began production on the thriller horror film the Devils light in Eastern Europe, and we're gearing up physical production to begin shooting several other films over the next two months, including the unbearable weight of massive talent starring Nick Cage.
These efforts put up in a strong position to capitalize on a market short on supply.
On the distribution from our slate is well positioned to embrace release strategies ranging from global theatrical rollouts to P., Vod and ethanol launches, giving us new ways to monetize our current pipeline and create new models for the future.
This afternoon, we announced that our film antebellum will be released on premium video on demand on September 18.
And electrifying and urgent movie our pivot strategy provides the opportunity to reach the greatest number of people at a moment when its central themes are an important part of the national conversation.
Our business model is strong and informed by the learnings from our successful P., Bob launches of I still believe and the secret.
Turning to television the most important part of the Mad men story is yet another reaffirmation of the long tail value of Great Library content.
Our recent second syndication license of this series is a significant increase in value over its first syndication license eight years ago to Netflix.
In a world where people are consuming more content.
We believe that this story will be repeated across all the top titles in our library.
It was a strong and successful quarter for our television business. Our output was prolific our development pipelines will.
We're continuing to put new shows on the air and continuing to ramp up our highest priority supplying premium scripted series to stars.
And while getting new shows on the air is great.
It's really all about renewals and this quarter all five of our new series were renewed as love life, though is extraordinary playlist Mystic Quest P. Valley and high town begin what we hope will be long runs building evergreen value.
We are already preparing to launch the next wave of premium properties first Lady that Showtime starring Academy Award winner viral Davis's former first Lady Michelle Obama.
The Seth Rogan, Sara Silverman adult comedy Sante Inc. for Hbr, Max and Eastwind creator Alley went words comedy for Starz about life in the Reagan White House, starring Deborah missing.
With more and more of our creative focused on Starz. We now have more than 20 Lionsgate television series in development production or ready to launch on the network as we continue to align all of our content businesses, where we see the greatest opportunity for growth.
During the quarter, our television group was busy establishing protocols to allow us to resume production safely.
So every show represented own unique set of issues. We will soon have a steady stream of premium scripted series returning to production at the right pace in the right locations and with the right safeguards in place.
Meanwhile, Pilgrim has achieved great success, producing unscripted series safely in the current environment developing procedures that have one acceptance from health officials local communities talent and the guilds.
They have 21 shows in various stages of production in every part of the country and they just completed shooting the major competition reality series, the ultimate surfer ABDC and dodgeball for discovery, while the new Mike Tyson series Tyson burst jaws Rumble honorees is preparing to take a.
Out of discoveries shark week.
There was also an active quarter for Lionsgate 360 collaboration.
With our television in motion picture teams together acquiring the coveted Pulitzer Prize, winning 16 19 project in partnership with Oprah Winfrey, The New York Times, and investigative journalist, Nicole handed Jones, which we will adapt into a portfolio of content with some of the greatest African American storytellers.
It's an exciting reaffirmation of who we are and what we stand for as a company.
In that regard as we create new paradigms for operating our business. We also named the Chief Diversity Officer informed and executive diversity Council, which I'd share continuing to strengthen our commitment to diversity in our workforce and ensuring that all of our employees have an equal path to success.
As we think about where the biggest opportunities for value creation lie.
We start by looking at the building blocks that we have carefully put into place over the last 20 years.
First assembling libraries in the distribution business to monetize it.
Second building a portfolio of dozens of major film and television franchises with renewable evergreen value.
Third harnessing that content engine to a captive premium paid channel at Starz and finally, continuing the transformation of stars into a premium global streaming platform fueled by our IP and backed by our content library.
We've already changed the phase of stars in three and a half years.
From a domestic channel with almost no over the top subscribers to a direct to consumer offering with over 7.4 million OTG subscribers today.
From a network with no international subscribers to a global subscription service with over 5.2 million subscribers today.
And from a legacy company generating less than 50% of its revenue from our cart to a modern platform generating over 75% today expected to reach nearly 80% by fiscal year end.
This transformation is still in its early innings, but everything that we've seen so far and everything that we saw this quarter.
Tells us that were on the right path to creating something with unique and lasting value for our consumers partners and shareholders.
In closing this was not only a strong quarter, but one that showcased all of our strain.
Resilience in the face of the pandemic innovation and creating new business models for a changing world and most importantly people working together collaboratively to continue to build our company and our brand.
There are environment remains uncertain our businesses our strong our balance sheet is healthy our morale is good and our own path forward is clear.
Thank you now I'll turn things over to Jimmy.
Thanks, John and good afternoon, everyone I'll briefly discuss our fiscal first quarter financial results and provide some color on our outlook.
First quarter adjusted OIBDA was $174 million driven by strong motion picture group segment profit performance and record demand for library with revenue coming in at $814 million.
Reported fully diluted earnings per share was 23 cents per share and fully diluted adjusted earnings per share came in at 39 cents. This year.
Adjusted free cash flow for the quarter was $77 million.
Now, let me briefly discuss the first quarter performance of the underlying segments compared to the prior year quarter. You can follow along in our trending schedules that have been posted to our website and show greater detail around our global media network subscribers.
Media networks quarterly revenue was $367 million and segment profit came in at $72 million up 19% from last year, driven largely by smaller losses at Starz play internationally.
Stars domestic generated 30% profit margins, while transitioning one of our largest distributors to an hour cart revenue share model.
Globally on a pro forma basis, and including Starz play Arabia. The company added four and a half million subscribers year over year up 22%, reaching 25 million global subscribers at the end of the quarter.
Domestically total subscribers were 19 million, which was up 2.2 million from the prior year pro forma adjusted for changes and distributor packaging.
You can see more detail in the new subscriber disclosure included in our trending schedules.
Now looking at sequential performance total domestic OLTP subscribers were up 600000 pro forma or 9% sequentially driven by out lender and new freshman hit series high tail.
I'd like to remind you that are sub counts all represent paying subscribers.
Turning to our motion picture group revenue declined to $281 million as a result of note theatrical releases in the quarter combined with tough comps against last year strong performance of John Wick Chapter three.
Segment profit came in at $101 million, driven by lower PNM span and demand for high margin Library and segment two titles, which is indicative of the increasing value of our content.
As we mentioned on our last call. We expect some motion picture group revenue to shift to the right as theaters remain largely closed due to the co bid 19 pandemic.
And finally television segment revenue for the quarter came in at $196 million, while segment profit was 35 million up 40% year over year.
The results in TV significantly benefited from our licensing agreement of Madman and we expect the balance of TV segment profit for the year to be weighted to the second half.
On the balance sheet, our leverage ended the quarter at 4.1 times, adjusted OIBDA or 3.3 times, excluding our investment in Starz play International.
We continue to maintain significant liquidity with $376 million of cash on hand, and a $1.5 billion undrawn revolver.
I would also like to remind you that we have no maturities before the end of fiscal 2003.
We remain committed to paying down debt with the bulk of our excess free cash flow.
Lastly, we remain very comfortable with our maintenance covenants based on our revised forecast and having further stress tested them for longer production and theatrical delays as well as the potential negative impact of a recession.
Now I'd like turn the call over to James for QNX.
And ladies and gentlemen, if you wish asked a question for you to press. One then there on your telephone keypad. He made a draw your question at any time by repeating the one zero command.
We are using this speakerphone, please pick up the handset beefier pressing the numbers.
Once again you have a question Brad one then zero at this time.
The among might be for first question.
Do you have a few people queuing up and as a reminder, one then zero for any questions.
Well go to the first question, Matthew Harrigan, which true.
Please go ahead.
Hey, good afternoon, everyone. Thanks for taking the big question.
Hey, maybe two if I could maybe just to start.
Add officer, John or or Jimmy can you just maybe update us on your thinking around the international expansion just how you get your pacing relative to the multiyear projections that you guys had put out there. It's got a reminder, maybe how many markets you're now and maybe how me.
You're targeting just a little little update there will be will be helpful.
And then just secondly, the the library number you put in the release there was a pretty pretty stellar number are just curious if thats a reasonable run rate number or maybe how we can think about that versus what a normalized number number with looks like great. Thanks guys.
Jeff Why don't you take the first one and then Jimmy the second.
Great.
Hi, there international doing great. We're really excited about the progress we made since launch.
We are in currently 50 countries and we feel great about those 50 countries right now and the goal in each of those territories as they get deeper in terms of our distribution relationships.
John mentioned in his remarks, we have done 58 different distributor deals.
Over the last 18 months, we continue to see.
Distributors coming to us because the strength of the content that we put on the service right now we've got the great on outside the U.S. and it's performing really really well. So we feel great about the trajectory. We think we're on track to hit the 15 to 25 million subs that we've talked about publicly by 2025, and we feel great about it.
And Matt regarding your question on library.
As you've noted we've actually had to back to back records.
And recorded library.
We posted over 600 million, which was a record for us in fiscal 20, and then really a great start to the year with the first quarter record 219 million. So for US, it's just underlines the increasing value of content.
And in fact as John mentioned in his prepared remarks, we saw significant increase in value going from first second cycle with Mad men. So that's just.
Reaffirming that I would tell you. This is a very diversified library, driven driven across both motion picture and TV.
This just continues to we believe be an undervalued asset.
And ill give you a little perspective right. If you just took last years no.
Revenue was 600 million plus and as we've said before the cash margin on this is 50% plus if you took that and just put a conservative 10 to 12 times multiple you can easily see your roughly $3 billion to $4 billion in value.
As another way to look at this to you can look at it and some of the ports, which we just recently had a valuation Don on the unsold rights and it was independently valued at approximately a billion nine pre tax and if you add to that the contracted backlog that we disclosed in the training schedule is 1.1 bill.
You know you're at 3 billion and then you add development projects in sequel rights and spin off et cetera, you could see that's very consistent with this multiple approach of three to 4 billion. So really whether you look at it on some of the parts basis or multiple you come out somewhere around $3 billion to $4 billion range.
Great. That's helpful guys I'll jump back into queue.
The next to a Lotta line of Ben.
Line Byrne with Morgan Stanley. Please go ahead.
Thanks, Good Hey, how are you.
I think Joe it's on the call I believe I wanted to ask about.
The antebellum provide.
Vision I'm sure you're not surprise.
How do you think about.
The the sort of opportunity with that movie in a into premium video de window relative to your box all this expectation.
How do you think about the returns available to the company I think a lot of this is happening because of the coded situational and maybe all of it in the lack of a theatrical option, but I'm just wondering from an analytical finance point of view, how you think about.
The return on a movie and MP Vod window, and if you think that things have structurally change in this business over the next couple of years and you'll be doing more rather than less of this or is truly a temporary phenomenon.
Sure Ben.
Thanks for thanks for the question we.
Listen I would love to see every one of our movies released theatrically and we certainly made this one with real theatrical aspirations, we have great movie.
It's a movie that is also particularly strong 'cause it speaks to this moment in time, so just from a.
Movie meeting cultural moments, there's just no better time for it to reach its audience, which factored into our decision a little bit for sure.
Also.
What I would what I would say to you is that with the extraordinary demand for content and the short supply.
What I can tell you is that the that the economics look really strong.
It allows us to still still speak to a consumer directly.
And any of the downstream appetite and pay and beyond is strong so what I would say to you is that.
It's a it's a really good model for US. We also had a good theatrical model, but we think that in a model like this you actually accelerate caching and have this had the same opportunity for upside so between that and this moving in this moment. It was it was just the right decision.
When you think down the road.
I would tell you is we certainly we believe very much in the theatrical business and as that opens up we'll be ready to exploited aggressively and yet what you have seen in this moment is new opportunities be created and so I just look I look at the environment than although.
It's a little tough because theaters art open we've got more I think optionality and interesting ways to exploit our content the consumer and so I think that going forward, we'll be looking at all of those thanks.
If I could just ask follow thank you for that answer what are the things you. We here or are you read is obviously talent once they're movie both directors and also Im sure participants want their movies released theatrically not only because they wanted theatrically but they also need a lot of the economics are tied to box do you view that as a headwind to this model.
Working or do you think that this sort of changes in the air and everyone's sort of sees.
The way technology and the consumer moving.
Yes, I would start by saying, we feel like talent, we'd like we want it in theaters too. So we all would like that we all would like that to happen and we're also we're all working aggressively in our Bakken production already with the idea of there's a lot of appetite out there to feed and so.
It is it's something that we're all looking forward to getting back to and at the same time talent wants their stories told when they want to reach an audience and their partners with us that we're not making unilateral decision, we very much bring that.
Our our creative partners into these conversations.
To make sure that we're doing the right thing for the movie both creatively and economically. So it's that you end up having a lot more conversations any maybe had two before.
But at the end of the day creators want their stories to be seen.
They want to have they want to have impact.
And and so we're all kind of in it together dealing with the moment.
Thanks, a lot.
And then next well go to a line of.
Alan Gold with loop. Please go ahead.
Hi, Thanks for taking my question well guys.
I'm a few questions first for Jimmy and leverage took a nice step down and then what we've seen with you and all the studios is that.
There's been a big push back on costs till later in the year should we expect that reverses a little bit as the year goes on.
Yes, Alan listen in terms of the leverage. Thank you did note that we significantly de levered since last quarter.
Look we generated nice positive free cash flow after fully invested in our business and we plan to continue to do that I would say that on a net debt basis, we reduced net data almost a $100 billion over the quarter and.
We've done so over almost a half a billion over the last 18 months. So expect to continue to manage the net debt at this level were down and the ultimate leverage will be a context of what the ultimately trailing 12 months or and as you've noted we were more for our front end.
Loaded with this first quarter so.
We expect that work a little bit against us over time, but feel very comfortable with where we are in our efforts to continue to de lever.
Thanks, if I could follow up on Ben's P. Vod question can you give us any sense of what the pricing is whether the movie will run in theaters. After the P. Vod window theaters are open and if theres a backend chair to the theaters.
On Annabel on it is currently planned at 1999.
And with the idea of we'll play it all the way through the holidays.
There is not currently a plan there is not currently theatrical plan.
It is to really maximize the opportunity for in this moment for the biggest the wide as possible audience to see if if if things change, we'll certainly take advantage of any opportunity out there.
Okay, and one last one if I could.
Mad men did you recognize the all the syndication revenue second cycle syndication revenue for Mad men this quarter or do you recognize more after amazon's exclusive windows over.
Yes, there is.
We recognize a significant portion of it this quarter based on the avails that were available on Amazon Theres more vales throughout the year.
Back half, but.
The majority has been recognized in the quarter.
Okay. Thanks, so much.
And ladies and gentlemen, again, if you like to ask your question. Please press. One then there are now again for any questions. One then there'll well next go to the line of Stephen Cahill with Wells Fargo. Please go ahead.
Thanks So.
Domestic stars network revenue is done pretty well I think it's only down around 6% from where it was before the Comcast reset. So we've just wondering are there any more fixed distribution deals coming up in fiscal 21 that we need to think about and do you think it's possible that you might and fiscal 21 to add a network.
Revenue run rate, that's kind of back to where it was before that they already set.
Hey, it's Jeff you've got a great question.
No. We continue with how are you we continue to see.
Great higher ARPU subs in the digital side coming onto the onto the business, which is replacing some of the lower ARPU subs that we saw in the Comcast deal we continue to work with Comcast.
We saw a little slowing of the of the growth on the Howard card side. During the early stages of the stay at home order because they were giving away a lot of content, but we have seen acceleration in the July month, and we're looking forward to having.
The first power spin off in September for the first time in under this new deals, we think we'll see growth accelerate there as well.
We generally don't talk about our distribution deals, but I would say just normally we have two to three year on a normal basis.
Great then maybe Jeff I forgot yet.
How many original the do you think is the right amount for Starz honest sort of cadence for your subscribers basis, and do you intend to run those on a like one per week or might you do more of like a bench type of approach for the stars content. Then and then just last five stars contact how do you think about having a big movie Library.
Gary versus putting more of that cash into original content.
Okay. Great question, we have a very specific programming strategy and as a premium service, which is non AD supported very mature very adults content that we like to say people are willing to pay for we don't have to be as broad and try to service the home in some of the other.
Newer launched services that we have so we think the right numbers around 15 originals that way, we can have one new piece of content or two new pieces of content on the air every week for our two core demos you couple that with our over 4000 library titles plus our Sony pay one at 899, we think we have a really good value proposition to be a complimentary serve.
For all of the Big services, both domestically and then it for 99 overseas.
So we think thats the right kind of the right mix of services remember this is really about moving the customer from week to week in reducing churn to low single digits and so it's really a portfolio approach, where we have a piece of content like power and we come back with the beat the content like P value will be can move the customer from 10 weeks to 20 weeks and really acts.
Celebrate the growth in the business and we think Thats the right mix.
In terms of library versus a one versus our original we've got a lot of first party data off the app.
Originals really drive acquisition Library drive.
A lot of attention in usage as we think there's a really great combination. There. The 71 continues to drive a lot of usage and acquisitions that are really big titles. So we think thats important. So we think we've got the right mix of content at the right price to continue to drive the business and be successful.
Thank you.
And as a reminder for any question press. One then there are now again, one then there'll for any questions.
Well go next go to line of Doug Crewing with Cowen. Please go ahead.
Hey, thanks.
Yes, Im sure you saw him be CEO, and Steve signed an interesting deal, which allowed for a P value window 17 days from release in return for some revenue sharing just wondered what your thought was of that deal how important think it is and whether you're looking any similar deals wonderful. Thanks.
Sure. Thanks, Yes, yes, thanks, Doug.
Look we.
There's some things to really like about that feel I think one of the things that that.
I think so real standout in it is that.
It treats all the parties as partners in the theatrical ebbed space and so.
It's trying to create a partnership model, where everybody wins and figure out how can work for everybody. We like that about it I think that theres, a time to unpack workforce, having our own conversations with all exhibitors.
As you as I'm sure you hope and expect.
What I will tell you is that much like what we're doing with antebellum. It just creates another opportunity in the marketplace. It creates more optionality for how we can exploit our content.
I think for all of US it's important to.
Make sure that we're working hard to to lift the theatrical business backup and at the same time.
It's just a greater reach the audiences who at the moment are incredibly hungry for premium content and there's just not enough of it out there.
Great. Thank you.
And as a reminder for any questions. One then zero well next go to Matthew Thornton, What's true last please go ahead.
Hey, guys. One quick follow up any any color you can give us just on how to think about.
Linney area. This year for Starz subscribers, obviously, we've got the co via the kind of engagement bump into calendar second quarter and then we've got.
Yes that original slate that we don't have great visibility into yeah. So that's going to ebb and flow reservoir screen, maybe any color you can think about how we speak about the when you already.
So obviously, rob throughout the year any any milestones we should be thinking about thank you.
Yes, Hi, it's Jeff.
We have the fortunate to be almost the euro in advance of production. So we don't expect any interruptions to our slate.
Through the ended the fiscal until we have as we talked about.
The first tower universe franchise coming on on September six, which obviously is a big driver subscribers for us and we've got the Spanish Princess coming behind that which again is another great driver of sub sitting against the Atlanta their audience and so we feel pretty good that the business will continue to accelerate and grown on the digital side.
I think as you see most of our partners.
Announced on the traditional side there is the weakness there as a lot of our big operating partners transition to a digital product.
We expect that business continue to shrink at the normal pace. It it has over the last couple of quarters, but we do see grade acceleration in ROTC service as John said in his prepared remarks, we do believe that globally, we can get to $13 million to $15 million LTE subscribers for the ended the fiscal and we feel pretty good we're on track to hit that that range.
Great. Thanks again guys.
And once again as a reminder, if you do have a question you can't promise. One then zero again, one than zero for any questions.
And at the moment, we do not have anyone unlike Q I'll turn the call back over to James Marsh. Please go ahead.
Thanks, Jeff Please refer to our press releases in events tab under the Investor Relations section of the company's website for discussion of certain non-GAAP forward looking measures discussed on this call. Thank you very much.
And ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
Well.
We're sorry your conference is ending now please hang up.