Q3 2021 Lions Gate Entertainment Corp Earnings Call
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Yes.
Ladies and gentlemen, thank you for standing by and welcome to the Lionsgate Entertainment three Q 'twenty one earnings call. At this time all participants are in a listen only mode. And later you will have an opportunity to ask questions.
<unk> will be given at that time, if you should require assistance during the call you May Press Star and then zero as a reminder, this conference is being recorded I would now like to turn the conference over to our host head of Investor Relations James Marsh. Please go ahead.
Good afternoon, thanks for joining us from the Lions Gate fiscal 'twenty, one third quarter conference call will begin with opening remarks from our CEO, Jon Feltheimer, followed by remarks from our CFO Jimmy barge after their remarks, we'll open the call for questions.
Also joining us on the call today are vice Chairman, Michael Burns CLO, Brian Goldsmith Chairman of the television group, Kevin Beggs and chairman of the motion Picture Group, Joe Drake and free.
The Starz, we have president and CEO, Jeff Hirsch CFO, Scott Macdonald President of domestic networks, Alex and Hoffman and EVP of international support of Cali the.
The matters discussed in this call the crude forward statements, including those regarding the performance of future fiscal years, such statements of the subject to a number of risks and uncertainties actual results could differ materially and adversely from those described the forward looking statements as a result of the various factors. This includes the risk factors set forth in Lions gate.
Most recent annual report on form 10-K, as amended and our most recent quarterly report on form 10-Q filed with the SEC.
The company undertakes no obligation to publicly release the result of any revisions to these forward looking statements that may be made to reflect any future events or circumstances with that I'll turn it over to John John.
Thank you James and good afternoon, everyone.
We're pleased to report a quarter with strong financials robust subscriber growth at Starz and another outsized performance from our library as our model continues to show its resilience in the face of the pandemic.
Let me take you through the quarter's highlights.
Starz continued its strong growth gaining 800000 subscribers in the quarter as it increased international over the top subscribers by 26%.
<unk> posted solid gains in domestic over the top subs.
With 28 million global subscribers at quarter's end, we are well on our way to our goal of 50 to 60 million global subscribers by 2025 the.
The vast majority of which will be high value of streaming subs.
Last week, <unk> announced the new bundle agreement with cannot clue that will immediately scale, our footprint in France anticipating of future and which we expect bundles to become an increasingly important part of our distribution strategy.
Our production teams have been doing a great job of keeping our television and film pipelines operating at full capacity with safety protocols in place and minimal downtime.
Amazingly in spite of the challenges we are currently shooting 19 scripted television series and another 20 unscripted shows around the world.
Five feature films of returned to production three new film productions of started and in the coming months, we will begin shooting the wonder sequel White Bird from director Mark Forrester shotgun weddings, starring Jennifer Lopez and Josh Duhamel.
Their guide it's me Margaret from Superstar producer James L. Brooks Borderlands, teaming Kevin Hart and Cate Blanchett.
And John Wick four of course, starring Keanu Reeves per release next year.
Our television group continued its strong year with new series picked up at Starz, Apple plus ABC.
Fox and HBO Max while all six series launched last year have been renewed for a SEC.
Seasons with love life, breaking out the become the top performing original and HBO Max as we continue to demonstrate our ability to put shows on the air and keep them there.
The strong content pipelines continue to feed the library net in the quarter achieved another record $765 million in high margin revenue for the trailing 12 months.
And we've accomplished all of this while continuing to strengthen our balance sheet ending the quarter with more than $550 million in available cash an untapped $1 5 billion revolver.
And leverage that has been reduced by more than a full turn in the past year to under four times, while continuing to fund the growth of all of our businesses without a capital raise and with our own free cash flow.
To drill down on our performance in the quarter I'd like to continue the narrative. We began on the last call by laying out three of the broader themes that have contributed to our success.
First we can tell the mobilized all of our resources behind the growth of stars.
From the acquisition four years ago through the international rollout the began in 2018.
We've been converting and scaling stars into a modern data driven global subscription leader that has become the first traditional service to have more over the top and linear subscribers of critical digital inflexion point.
By the end of next quarter, we expect streaming revenue to surpass traditional for the first time as well.
Domestically our programming for a broad spectrum of women and traditionally underserved audiences is differentiating us from our competitors driving subscriber acquisition and retention and setting new viewership records.
New series P Valley and high town and the Darkies series of reduced are resonating with our audiences.
Power book, II Ghost set viewership and acquisition records in its first season, becoming the highest performing new series ever on Starz.
With its initial season ending on a viewership high we're bullish on the performance of the future seasons as well as upcoming installments of the power franchise raising kanan in force.
We've established ourselves as the go to premium service for grown up audiences. Our brand continues to set us apart in the crowded marketplace and we of our biggest and most ambitious starz slate coming in the year ahead.
With the programming and marketing spend informed by the consumer data that we've harvested from our direct to consumer business.
We just completed another quarter of high <unk> over the top domestic subscriber growth that drove solid revenue gains while we continue to convert our Comcast linear subscribers into higher value Ala Carte zone ahead of schedule.
Internationally, we have expanded into 55 countries, including our Starz play Arabia joint venture with launches spanning 10 partnered 20 countries in the quarter.
We also continued to bolster consumer data and engagement by rolling out our retail app in another five countries.
Our partnerships with global streaming platforms and top local distributors alike are thriving from ghost to gains of London seduced. The Spanish Princess are best of global <unk> content strategy is resonating with consumers, helping to drive our second straight quarter of nearly 30% over the.
<unk> subscriber growth.
We're capitalizing on our early traction by building scale in existing territories, while opportunistically expanding into new ones.
Recently, leveraging the fast out of our Indian platform Lions gate play into Indonesia.
Second we continue to accelerate the convergence of our studio and platform businesses to support this growth.
Whether lining of 20 Lions gate TV premium series for Starz, using our library to drive Starz international growth or leveraging our properties and talent relationships across all of our businesses.
This afternoon, we announced that our collaboration with three arts on the surface Queen the story of French Royal Kathryn the Medici from Bohemian Rhapsody, Justin Heyse executive produced by Hunger Games franchise Director Francis Lawrence and three Arts Erwin staff has been green lit it stars.
Latest example of our ability to marshal all of the resources within our Lionsgate family to support the growth of stars.
As everyone scrambles to vertically integrate their legacy businesses behind the growth of new streaming platforms, our ability to continue converging our studio platform and talent businesses is critical.
Third we continue to deepen our content pipelines, while taking advantage of our distribution optionality.
Our strong performance in fiscal 'twenty, one allows us to greatly increase our content and marketing investments in fiscal 'twenty two to be funded with our own cash flow.
We're responding to the record imbalance between content supply and demand in the marketplace by expanding our slated stars ramping up our scripted series production at Lionsgate television and readying of robust film slate that anticipates theaters coming back next year, while addressing huge demand for content.
Ross all platforms.
Our success in generating strong returns from early Piedmont multi platform and hybrid models for the films the tall antebellum run I can only imagine in the secret.
Speaks to our ability to monetize current films, while at the same time working with our theatrical exhibition partners to plan for the future.
One full year into the pandemic, our businesses are doing well and adapting to the changes overcoming the headwinds and delivering strong financial performance, while creating evergreen value for the future.
We are much of the success to the amazing resilience of our employees and our creative talent family, who have doubled down on their collaborative team spirit innovated, new ways of working and communicating and demonstrated strength and resourcefulness in the face of the diversity.
Now I'd like to turn things over to Jimmy.
Thanks, John and good afternoon, everyone I'll briefly discuss our fiscal third quarter financial results and provide some color on our outlook.
Fiscal third quarter, adjusted OIBDA was $134 million up eight.
Percent over last year, and driven by strong performance in television with total revenue coming in at $836 million.
Ported fully diluted earnings per share was the loss of <unk> <unk> and fully diluted adjusted earnings per share came in at 21 per share of.
Adjusted free cash flow for the quarter was the $111 million.
Now, let me briefly discuss the fiscal third quarter performance of the underlying segments compared to the prior year quarter. You can follow along in our trending schedules have been posted to our website and show greater detail around our global media network subscribers.
Media Networks' quarterly revenue was $406 million and segment profit came in at $82 million driven largely by domestic OTT subscriber growth as well as the strong performance of Starz International as we continue to rollout of new markets and platforms.
Globally, including Starz play Arabia, The company grew OTT subscribers 900 sequentially or 7% as you can see in our trending schedules domestically.
Domestically <unk> subscribers increased 3% sequentially, while international OTT subscribers grew 26%.
Total global media networks, OTT subscribers reached $14 6 million, while MVP day subscribers stayed constant at $13 4 million for a total of 28 million subscribers.
We now expect our previous guidance on global media network OTT subscribers to exceed the top end of the 13 to 15 million subscriber range by the end of the current fiscal year approaching 50% plus growth year over year.
Now turning to our motion picture group revenue declined of limited theatrical releases, the 250 million while segment profit of $50 million was in line with the prior year. Despite the tough comp against the prior year quarter, which included ancillary sales of John Wick.
And finally, we had strong performance in television where revenue for the quarter came in at $228 million and segment profit increased to $30 million.
Driven by additional Mad men licensing and episodic deliveries.
On the balance sheet, we continue to reduce leverage ending the quarter at three six times trailing adjusted OIBDA are just under three times, excluding our investment and Starz play International we continue to retain significant liquidity with $551 million of cash on hand and of <unk>.
One 5 billion Undrawn revolver.
We remain committed to strengthening our balance sheet and paying down debt.
Now I'd like to turn the call over to James for Q&A.
Great. Thanks, Jimmy.
Caroline can we open it up for Q&A.
Absolutely. Thank you and ladies and gentlemen, if you wish to ask a question via the phone you May pass one and then zero at this time peer of yours.
The speaker phone please pick up the handset before pressing the numbers.
And once again, if you do have a question over the phone plus one and then zero at this time.
For the first question.
Our first question comes from the line of Steve <unk> from Wells Fargo. Your line is open. Please go ahead.
Thanks, maybe.
I mean the stock.
<unk> I was wondering with just about one month left in the fiscal year could you maybe give us what your outlook is for fiscal 'twenty, One and then John and Jamie fiscal 'twenty. Two is probably going to look a lot different flow could you give us any sense of how we think about both the cadence for fiscal 'twenty two but maybe also just as folks are heavy reallocating some budget from <unk>.
The home entertainment the Outhaul out of home entertainment and you've got a bit more cost coming online. How do you think about the margins in the year like fiscal 'twenty two.
Sure Steve Thanks for the question.
Terms of fiscal 'twenty, one as we said from the beginning of the year of that fiscal 'twenty, one was going to be more front end weighted.
No.
And as we as we look ahead to the segments. We continue to see media network segment being flattish relative to the prior year for on a full year basis, and Thats as we reinvest excess profits there to de risk the model and position us for future growth and in motion picture group as we see.
Said before over the remainder of the year of profits will continue to moderate sequentially, particularly.
Particularly with P&A spend on chaos walking is net increases in the fourth quarter and then in television we remain on track for significant growth their profit is up 50% for the full year as John's noted in earlier calls so that kind of rounds out the.
How we would.
Finalize the fiscal 'twenty of what we're seeing there and one.
21, and in terms of fiscal 'twenty two looking ahead.
There, we expect the cadence to be more backend loaded so just the inverse of fiscal 'twenty. One so backend loaded in fiscal 'twenty to look we expect strong operational performance in 'twenty, two we're going to be net with increased investment in content and.
And marketing as you have heard with regards to the various businesses looking at Starz.
It will reflect the impact and the timing of our content marketing spend and motion picture group the P&A spend.
Is going to be more front end loaded here because of the a more front end loaded first half theatrical release slate and then likewise more backend loaded.
In terms of TV in terms of episodic deliveries.
I would say.
It is available in the first quarter of this year fiscal 'twenty two of that is so we've got a strong fiscal 2002 and its backend loaded.
I'd Echo what Jim said I think.
All of our core business of that wont look that different I mean, we're going to of a strong library of year, we're going to continue to sell into a strong demand.
Our television business is strong as I mentioned, we've got 39 shows.
Going on right now.
And we like the trajectory of our stars business, both domestically and internationally.
Sure.
I think it is going to be another strong year as Jimmy said.
Thanks have a lot of great color range, if I could ask a quick follow up you've done a great job of getting leverage down into the threes should we expect that will tick up a little bit in fiscal 'twenty two.
Yes, sure Steve look you're right.
We were down one five turns in the first nine months of this year.
So three six as of relatively low point at the moment.
And of favorable way, what I would expect as we go into 'twenty two with the content spend.
And marketing spend rolling through you would expect some increase in margin there to some peak kind of mid <unk>.
Early to mid year leverage ratios, but returning back around four times leverage by the end of fiscal 'twenty. Two so that's a good place to be relative to our where we are in our investment cycle with content marketing.
Great. Thank you.
Operator next question please.
And as a reminder, ladies and gentlemen, if you wish to ask a question on today's call you May pass one and then zero on your phone. Our next question comes from the line of Tim Nolan with Macquarie Securities Your.
Your line is open. Please go ahead.
Hi, everyone. Thanks very much.
Wanted to ask a question about profitability on the OTT side, if there's any color you could give us.
Seeing the.
Subs outpacing the linear quarter two of go and I are saying revenue outpacing the.
Of the linear and the next quarter or two what are your thoughts on how the profitability profile of the Starz OTT service Standalone looks like.
Hey, Tim it's Jeff. Thanks for the question now if you look back over the last couple of years as we were primarily of linear network bundled network with low ARPA of subs and we've converted as you said over 50% of of more of our OTT subs, the linear subs and that profitability continues to come up you look at our <unk> in the last quarter was over <unk>.
I think there is some noise in that number is still based on our converting from bundled to Ala carte on Comcast, but we expect longer term that would be somewhere between the $5 75 and $6 on ARPA. So a much more profitable subscriber as we bring them onto the platform and then if you look internationally, we still think that will end up where we've said publicly somewhere but.
The three and $4 when we get out the 2025 and Thats a little bit more of a.
A steeper line as we accelerate the OTT growth in the international side. So overall, we're moving to where the consumers, but we're also moving to a much more profitable customer.
Okay cool thanks, Jeff can I ask maybe another one.
Probably also for you to Jeff about the.
Increasing competition, we're seeing obviously in OTT.
I believe you've done some some work looking at your data and trying to figure out what content to make available at what times and how to mitigate churn I wonder if you've got any comments on churn and your ability the sustained growth given how much more crowded the field continues to get.
It's a great question I think if you take a step back and when we look at the industry and how it's unfolding now this is probably the first quarter with the exception of Paramount plus Thats coming at the end of March where all of the players are kind of on the field right now and as we've said before that first big broad based streaming services the Netflix the.
Disney Pluses the.
Hulu that are trying to service everybody in the home I think thats, where the real competition is going to be and youre going to see people competing on AD spend people competing on price.
And people competing on bundling as we announced today you saw now for the bundle in Europe. We think we will see more of that as we go but we're really.
And as a complementary service to all of those big broadband services and so we think with our programming strategy of being very focused on a female audience of the underserved audiences and building out that slate as John said, it's our it's our most robust slate of yet we think that we've got a really good programming strategy, we've got a great.
And I'm actually going to let Alan talk about the data and how we use the data to schedule and reduced churn to what we're seeing in an all time low in the business right now.
Yes, I think just to comment on the slate we've got returning franchises like power I think we've got three installments of power coming next year, we've got outlander coming next year. So in terms of driving the business in terms of subscriber acquisition in terms of retention, we've got sort of of that nice flow of flowing viewers from one channel into the Max as well.
Of our sort of adding and building.
The viewership in building the subscriber base as the Dow.
<unk>.
Per Jeff note about in terms of the data, we're really always driving to the lowest the subscriber acquisition cost.
And so that's really how we manage the business we are managing the business.
To have a really good return on our marketing investment and a really strong return on our content investment as well.
Great can I, maybe squeeze one more in please also on a similar topic I know the starz internationally, if that a lot of Reits.
The content from the likes of Paramount and Hulu I Wonder if there's anything that we should think about might change given that we'll get some updates on paramount plus coming in the next couple of weeks or so or indeed anything related to the Disney just if there's anything on your access to that international content that might change.
The parent answer that question Hi, the fair enough. Thanks for the question. So we have not been seeing a problem with the securing fantastic content from producers.
Nor certainly from our own studio, we have incredible content on our own slate, that's very international focused and we think are going to drive a lot of subscribers just as some examples there.
We're excited about separate cleaner interest announced today as well as dangerously is honestly coming Elizabeth and the power franchise rights of incredibly well for us, but net we have not been seeing a slowdown in content.
The acquisitions either.
Great. Thanks.
Okay.
Karen next question all right. Our next question comes from the line of Alan Gould from your line is open. Please go ahead.
Thanks for taking the question I'm going to do sort of the flip side of Tims question addresses.
The Kevin Kevin It seems sort of the traditional TV seeing probably change at the most of the accelerated rate we've seen in terms of ratings and advertising how does that hasnt of everything play into your job as a producer of content for all of television traditional streaming et cetera.
Thank you that's a great question, it's actually never been more of us John touched on.
Our production slate, which includes.
13 series for Star incentive doesn't more on development 14, or 15 across the TV landscape outside of the Starz Lionsgate.
The family and the demand is at an all time high one of our strength is a very diverse portfolio of producers writers.
Generators of both from within our own company.
The brands.
Like John Wick, which we're developing in series with Jeff and his team and small movie instead of become.
Important mainstays for series like Dear White people, we're in production on blind spotting for stars right now.
We are of a fantastic partnership with the BBC that yielded.
The two pilots the season and one series of order. So the demand is high and everyone wants premium high high end scripted programming. It's what we've been doing from 20 plus years at Lionsgate as our own special Lane and now that lane everyone wants the crowds are expanding to a fall of entry way, but very easy for us to do so.
Okay. If I could just follow up for either John or Jeff was reading trade article from Starz play International.
Talking about possibly doing an IPO in the next few years.
Is that the plan on Starz play international some of those.
Quoting the CEO of <unk>.
Yes, our of news article.
Yes look we feel really great about our starz.
Starz play.
Arabia.
32% wherever we're controlling shareholder with the approval rights.
Continue to be the market leader, we feel good about what they've built the secured.
Our local loan from area, which is really a validation of how great. They are doing in the marketplace. We.
We do have obviously, the Reits to consolidate and we will continue to look at the business and when we think it's the right thing to do and the right time, then we'll look at that as an option.
Thanks, Jeff.
And ladies and gentlemen, if you wish to ask a question on today's call you May press <unk> and then zero on your phone and our next question comes from the line of Thomas <unk>.
From Morgan Stanley. Please go ahead.
Hi, Thanks, a quick question for Jeff you mentioned that Theres, some ARPA trend impact as we move through the Comcast subscriber retransmission and lapped one year anniversary of their more broadly it looks like theres been some continued stabilization on the traditional linear scars of trends is there anything you would call out there about underlying drivers that reporting uptake.
Broader of cord cutting at the industry level.
It's a great question I would say two things the remind everybody that we're not a fully distributed AD supported network and so we have a lot of penetration of room on our traditional Mvpds partners.
And so we think that theres, great again, great opportunity for us to grow on the traditional side with our audience as well as of on the OTT side.
I'll also remind everybody that by the end of this fiscal will be at 80% of all the cart on the traditional side. So that's really derisked. The traditional business is put the incentives align with our partners to grow the business together and as our content slate continues to outperform on their platforms, we're going together and I think they are really great to think about that as those of.
The customers, who are actually seeking out stars and choosing stars.
A much stickier customers of churns of also coming down. So I think we have an opportunity both to grow in the fast and more profitable side on the OTT side, but also on the traditional business with our traditional partners.
Okay, Great and then just quickly on the film strategy I'm wondering if you could update us on your views the taking of films through the premium Vod window is there a right sized film or any puts and takes that helps determine what path of film might take in terms of the monetization monetization going forward.
Yeah sure. This is Joe thanks for the question.
I guess, what I would say to you is that we have we've talked a lot about it adopted what we're calling the platform agnostic approach to distributing film we're looking at the theater business and we do think that theaters will get open by the summer maybe earlier, where prime for that and at the same time.
We've had a number of experiences now in the <unk> space and what I would say is that we are seeing mulch.
Multiple.
Multiple opportunities of multiple options for distribution of each title. That's the way we greenlight titles now we look at that we look at the AD philosophy. When you look at T. Bob When you look at other models theatrical the peapod.
And green light on that basis, and we're just seeing more opportunity than ever before so I don't think it's a I D.
Don't think its a right sized film for that model I think it just has to do with.
The film what customers, you're trying to reach where are those customers what's available in the marketplace at the time, we have we reorganized R.
R R.
Our overall structure internally to really bring all of those groups together what I can tell you is that.
Our distribution and marketing teams are working like never before across every model and.
On the lock in a ton of value.
Okay, great. Thank you.
Next question Kelly.
Our next question comes from the line of Jim Goss from Barrington Research. Your line is open. Please go ahead.
Okay. Thanks.
Thanks.
A couple of questions one regarding the.
The film slate and the.
You may have an interest in plan about the.
Sort of a downward maybe perhaps being powder for a series.
Do you see more and more opportunity for increasing.
Interplay between the film and television production, especially since Starz has been.
Proving its per.
Presence.
Absolutely look we you've heard us talk about Lions gate <unk> 60, a lot over the last couple of years. We are we are very very integrated across the entire company and so whether we're making a movie web TV is by the buying rights with TV series, we have a regular group that.
Meats and looks at each piece of content in terms of how we can maximize it across every every piece of our platform.
Thank John Wick and the Continental series is a great example of that but there is there are a number of properties 16 19 is of Great example of that where we're working together.
To make sure your line of modeling margin the value.
Blind spot and yes. So there is it's a it's sort of a regular part of our business and I think something that we do better.
And then any of that anybody out there because we are so integrated and we work in a way that I think that well I think you find silos and other and other places I think this organization has really reaping the benefits of that level of integration and collaboration.
Okay, and then with regard to Starz.
As you've been able to increase its profile of globally as well as domestically.
Can you talk about the consistency of the programming.
The domestic markets versus the various international markets are you able to leverage of out of the programming and do you have to have a lot of unique content in each one to make that work.
Work.
And.
Also you mentioned that stars.
Alright. Thank you had a lot of the complementary positioning relative to some of the other services does that do you feel that creates a better runway or are you starting to get starz as the first by the end Mark Casey as you develop the better identity than you had originally.
Good question, So I think first and foremost the international expansion is really predicated on leaning on the domestic business.
A foundational element and so the slate as we continue to increase the marketing and the spending on the on the domestic content. It has to work globally and so if you look at girlfriend experience is the perfect example of that.
It had been of domestic show, we had moved the storylines of London with a very international cash, but the very international storyline that should work all over the world.
The power of franchise is one of the best performing shows in the UK and in France and in some markets in Latam and so as we look at putting shows on the domestic network. We're always looking at how does that play internationally, but we also know that some of those shows won't play internationally. So we are augmenting those shows with third party purchases from other partners domestically.
And I would say also I think the really unique industrial logic about putting the companies together is the ability to lean into the weather Joe just talked about the motion picture IP to put content on the air in terms of the series, whether it's buying spot and the continental leaning in with Kevin on some of the library or our original debt, we're producing out of Spain.
And out of India out of Latam to really supplement our global content footprint and so I feel like the slate is really going to work around the world and augment where we need to.
Okay. Thanks I appreciate it.
Great. Thanks, Jim.
And ladies and gentlemen, if you wish to ask a question on today's call you May press, one and then zero at this time.
Our next question comes from the line of Kotkin Morrow from RBC capital markets. Your line is open. Please go ahead.
Great. Thank you two if I could first in terms of the increased investment in content and marketing you expect across the core business. In 2022 can you provide more color on where you see the greatest opportunity to lean into in terms of the starz TV or of motion Pictures and then if you could kind of help frame the magnitude.
Of the increase you are thinking about I guess since fiscal 'twenty. One has been so disrupted with Covid. How do we think about the path ahead relative to maybe fiscal 19 or pre pandemic fiscal 2020 levels and then I have a follow up on Starz.
Sure. Thanks.
Absolutely I mean speaking of pre pandemic levels.
Our weighted to expect the content marketing spend as a percentage of revenues to be pretty much in line with.
With what we incurred in fiscal 'twenty as an example across all our businesses, we're finding motion picture of TV and stars.
Great opportunities to drive revenue and secure our future.
With the investments across all three of the business units.
No.
Overall, that's driving increased revenue so I would expect the overall impact on net profit to be modest.
Understood. Okay. That's very helpful. Thanks, and then if I could on Starz domestic OTT in the quarter of net adds of I think about 300000.
To be a bit of of deceleration versus the earlier days of Covid. When you had of course of the very robust trends from the pull forward of demand I guess up until this point you've grown that subscriber base, so impressively going forward.
As this quarter's pace, what you see as maybe the new normal range of Starz domestic OTT net adds that we should expect going forward.
It's a great question, when we had a really big quarter.
Last quarter, but that was I think driven more from the content that we had on the air we had two monster hedged with P Valley and the Premier of Ghost in last quarter, and we saw great subscriber growth. There. If you go back in history and you look at every time, we put the power of franchise on we can see these really spikes of the quarters. This quarter, we had some of our smaller shows.
On until you saw the growth slow a bit.
We expect fourth quarter globally to look much more of like second quarter in terms of the cadence of subscriber gains and then as John said in his prepared remarks, we're coming from.
Most robust and fully complete slate that we've ever had in the business with three power shows P Valley coming back high pound coming back.
<unk> of new content that we're about to announce and so it's our best and most complete slate and so you'll see acceleration in growth, but also we've schedule of this analogy can talk about in a minute reschedule it to help reduce churn and so as we fill out.
Two shows on the Air every week 52 weeks of year, we should continue to see churn come down to an all time low and accelerate the business even more on the front end on the one add anything on that and then we will be consistently on the air with shows for women and underrepresented audiences next year and just to repeat what Jeff said he has three installments of the power.
The franchise and also outlander happening next year in addition to escalate.
The other new series that we really have.
And of Great expectation for.
Thank you so much.
Okay.
And our next question comes from the line of Alexia <unk> from Jpmorgan. Your line is open. Please go ahead.
Alright, Thank you I wanted to follow the accident year.
How are you guys doing.
I wanted to follow up on your earlier comments about distribution of theatrical versus streaming from just dig inside of a little bit further.
Ultimately I guess from the pandemic is behind US I'm curious to how you see the distribution sort of platform has how much has it changed in terms of the decision of how much kind of Q traditional box office versus streaming and <unk>.
And also if you have any color on how maybe the economics of the various outlets impacts your business and that of a follow up.
Sure.
So.
What I would say to you is that much like stars, we're moving we've leaned heavily into content.
We will have over 40 films across all of our various distribution platforms that will be released and into 'twenty, two and that should grow again into 'twenty, three and Thats a reflection of one.
Our expectation of the theatrical market is going to come back but that these opportunities that we're taking advantage of now these new windows. These new ways of distributing consumers consuming in a different way and platform appetite downstream. We think what we have is an environment, where there's actually added opportunity.
It's not one versus the other.
And so we.
We leaned into the content accordingly, we have structured the business accordingly, as it relates to the metrics certainly what we've seen in the last year is that.
When you are able to co op. Some of these windows you move quickly from theatrical.
In the <unk> directly in the P. Bob <unk>.
And then move up some of your other windows, depending on the particular film what Youre doing and you can also year marketing spending differently, we've been able to be more efficient in certain cases with our marketing spend we've been able to accelerate.
Cash turn.
And some of these new models and so it's actually improved our metrics.
On our films better released in the alternative model we've also.
Along with that the team we call it segment to our home entertainment team because of this business.
<unk> has actually.
Accelerated.
They've increased the volume of content because they are seeing the kind of opportunity. So.
It's the metrics and some of these new models are really compelling.
And yet we still believe very strongly in the value of the theatrical release of kind of really set up the long term value.
Per our titles and ultimately helped drive the library.
The only thing of an answer that elect the I'd add one more thing, which is every single piece of content that we play with us of bespoke model.
A few people of mentioned early of this communication between all of our divisions that happens 10 times every single day and so when there is a picture of Joe is looking at every one of our distribution channels, including stars and saying how can we add value to what would be a normal model here.
And.
As I say, it's the kind of a unique culture that we have at our company.
Thank you and then just a quick follow up on the share price stocks pretty much doubled of pillar.
I was in recent weeks I think largely at least in large part to the tactical is the way we're seeing net of cross sell might be value names in media I'm just curious on how you view the share price now.
The drivers behind the move that we might be missing outside of that from any color there.
Hey, Alexia.
It's certainly nice to see investors beginning to recognize our improving fundamentals.
But those fundamentals the rapidly increasing our asset base and building real value across all of our core businesses every day and we obviously appreciate the attention of the equity of starting now to garner.
Thank you.
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There are no further questions in the question queue.
Great. Thank you Carolyn I just spoke of closing statement here I'd like everyone to please refer to the press release of events tab under the Investor Relations section of the company's website for a discussion of certain non-GAAP forward looking measures discussed on the call today. Thank you very much.
Okay.
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Yeah.