Michael Burns, vice chairman of Lionsgate, on Tuesday talking on CNBC, reiterated a discussion he and John Malone, a major investor in Lionsgate, made years ago. Being a content provider is akin to being an agnostic business partner -- with some ammunition of sorts -- to any and all TV distributors.
This includes any linear TV networks, traditional pay services selling bundles of linear TV channels; digital on-demand subscription platforms, or other kinds of TV apps -- all to help all parties make lots of money.
“All of these places have the same issue: What are they going to put on?” said Burns. “Seventeen years ago, John and I came up with a simple strategy: be the benevolent arms dealer.”
Burns also referred to a recent investor day, where Malone and legendary media investor Gordon Crawford talked about “predator and prey in terms of where on food chain content fits.” That all sounds like a possible battle plan for some.
For its part, Lionsgate has 16,000 films in its library and has 90 different TV shows on 40 U.S. networks. Currently, it is spending $2 billion in new movie/TV projects, including TV-movie productions for its recently acquired Starz premium cable network group.
Burns says Lionsgate -- which is enjoying a critical and financial success with its theatrical film release “La La Land,” totaling $132 million in worldwide box-office revenue so far -- is no Netflix. Netflix is spending $6 billion in content development in 2017.
Whether a big or medium-size growing TV-media company, the strategy is clear when working in the premium TV-movie game. Spend heavily on TV-movie production dollars for high-quality programming and the buyers -- traditional and new platforms -- will show up.
Even in China. Burns says in 2016, Lionsgate had its best year ever in terms of selling its theatrical movies in that country -- up 65%.
Generally, few media content producing companies have problems with countries like China: They are net exporters. But considering recent combative talk concerning trade with China by President-elect Trump, might that change? Burns wouldn’t comment.
Right now movie/TV companies have the guns. But can they continue find new friendly bullets?
Wayne, every program content supplier, be it a broadcast TV network, a cable channel or a SVOD service, tries to obtain "quality" programming, whatever that means? Indeed it seems to mean different things to different people. To some, "edgy" dramas about vampires means "quality"; to others, it's shows like "Law& Order" and its many clones, spinouts, etc; still others---some might call them, "the deplorables", probably believe that "The Jerry Springer Show" offers a "quality" experience. The problem arises, not just in defining exactly what is meant by "quality content" but also what the development and production costs of such a show might be, how many of the right kind of viewers , hence ad dollars it will attract and, most important, its appeal in the syndication/SVOD rerun aftermarket, where the real profits are generated. Seeking "quality content" that delivers profits at an affordable cost should be the cornerstone of every content supplier's---or wannabie's-----business plan, but it's not an easy goal to attain. Just ask the broadcast networks who've been trying the required balancing act for decades, they'll tell you how difficult----and risky---such a strategy can be.