Starz OTT Customers Up 23% to 10.6M in Last Quarter

(Image credit: Starz)

Premium service Starz said global subscribers to its over-the-top  streaming services rose 23% to 10.6 million in the fiscal fourth quarter, the first since the premium service lost linear carriage with the largest pay TV distributor in the country, Comcast.

Domestic linear subscribers to the Starz service fell 6%  to about 12.1 million in the period, mainly due to the transition of its carriage deal with Comcast to a primarily over-the-top service. In February, Comcast said it would no longer carry the linear Starz channels, giving consumers the opportunity to buy the premium service directly through the Starz app, or bundled with its broadband-only service Flex.  Starz said that about 6.2 million Comcast subscribers churned off the service as a result of that transition, but that it recaptured about 1 million of those customers in the first six weeks.

Domestically, Starz said it had 6.8 million paid OTT customers, which includes the Starz app (with 2 million customers) as well as online subscribers via Amazon Prime Video Channels and other services, up 21% from 5.6 million in the prior quarter. Starz said it expects global OTT customers to rise to between 13 million and 15 million in fiscal 2021.

Despite the gain in OTT customers, Starz Network revenue fell 5% to $337.7 million in the period and segment profit was down 38% to $67.3 million.

For the quarter, Starz parent Lionsgate Entertainment saw revenue rise 3% to $944 million and adjusted OIBDA increase 22% to $126 million. 

“The transition to a la carte and OTT is an important one for Starz in terms of terminal value, but we think investors will remain a bit squeamish that another fixed-to-a la carte [transition] could come," Wells Fargo Securities media analyst Steven Cahall said in a research note. "This rocky period is the key reason we’re not more bullish."