It has been finalised: After almost a decade together, Lionsgate and Starz are going their separate ways with immediate effect. What was once intended as a strategic merger of studio and streaming has ended in a quiet but telling break - without any major Hollywood drama.
The decision comes at a time when the industry has hardly any room left for mid-range players between mega-corporations and bought-up niche providers. For Lionsgate and Starz, independence means one thing above all: both are making themselves saleable - or ready for a merger.
Starz: Slimmer, more digital - and under pressure
Starz wants to relaunch itself as an independent brand - with a focus on digital subscribers in the USA and Canada, particularly women and underrepresented target groups. A clear positioning, but not a sure-fire success.
While streaming subscriptions recently rose to over 13 million, the service lost around 330,000 customers due to the end of a linear Canadian deal. Revenue fell by over 6 % to 330.6 million dollars. At the same time, the company imposed a radical cost-cutting programme: a write-down of USD 177 million and a planned reduction in annual content expenditure from USD 800 million to USD 650 million are intended to stabilise the balance sheet. In future, Starz will rely more heavily on licensed content from Lionsgate and Universal instead of expensive in-house productions.
However, with over 550 million dollars in net debt and a junk rating from Moody's, Starz is in a shaky financial position. Management points to a 15 % margin and a digital share of 70 % - but the market remains sceptical. Without international growth, Starz remains a niche streamer with limited room for manoeuvre - and a potential takeover target. Sony is already being rumoured behind the scenes as a logical candidate.
Lionsgate: Liberated - but not free of risks
Lionsgate never really got to grips with Starz - the culture, business model and strategic focus were too different. Now, without the ballast, the studio wants to reposition itself as a pure IP provider - and make itself more attractive to potential buyers.
Listed on the New York Stock Exchange as LION, the studio is currently worth around 2 billion dollars - including an impressive catalogue of 20,000 titles, including John Wick, The Hunger Games, Twilight or Saw. Sounds strong, but there's a catch: many rights are divided up, regionally limited or linked to revenue-sharing models - and therefore difficult to evaluate.
In addition, the Box Office performance remains mixed. Ballerina, a female John Wick-spin-off, disappointed at the box office - another example of franchise fatigue and the growing scepticism towards calculated reboots.
Nevertheless, Lionsgate is one of the last independent players with a significant catalogue. Talks with Legendary Entertainment - financed by Apollo Global - are already underway. A merger could help both: Lionsgate brings the archive and production infrastructure, Legendary the blockbuster potential. Unlike many wishful constellations in the industry, this deal would be realistic - and strategically sensible.
AI as a bet on the future
In addition to traditional content, Lionsgate is also focussing on technology. In collaboration with the AI start-up Runway, the studio is training models with its own film material - for virtual sets, automated pre-production or more efficient greenlighting processes.
Important: Lionsgate does not see AI as a replacement for creatives, but as a tool to reduce costs. An important point in times of post-strike sensitivity. Whether this will be enough to set the company apart from the competition in the long term remains to be seen - because without audience success, even the best tech won't help.
The new centre of Hollywood: thinned out and hungry for survival
The split between Lionsgate and Starz is exemplary of the state of the industry: the centre is getting thin. Between tech giants and old studios, there is little room for medium-sized providers without a platform or global reach. Those that survive are consolidating - or selling.
Starz focusses on concentration and efficiency. Lionsgate focuses on IP, negotiating skills and transformation potential. Both strategies are not without charm - but are only viable if buyers are convinced.
CONCLUSION:
The separation was no drama - but a clear signal: both companies are getting ready for the next chapter. Starz looks like a clean takeover target. Lionsgate is positioning itself as an IP treasure trove in search of a strategic partner. The question is not if, but when - and at what price.
FILMTAKE reports in detail.