Lionsgate Says Digital Sales, UltraViolet Helping Home Entertainment Growth

Lionsgate Co-COO Steve Beeks predicts big things for UltraViolet

A growing appetite for digital copies of movies like "The Hunger Games" and "The Twilight Saga: Breaking Dawn – Part 1" helped Lionsgate's increase its quarterly home entertainment revenue by 43 percent, the company said Tuesday.

Overall, the company reported $233 million in video-on-demand and sales and rentals of movies and shows for the three months ending in December. It was a sign that the home entertainment market — which has suffered incursions by streaming services like Netflix and Hulu — has begun to stabilize, executives said on an earnings call.

That growth is partly attributable to Lionsgate's 2011 acquisition of Summit, which gave it access to the popular "Twilight" series and made year-to-year comparisons tricky. But the company's home entertainment business has some reason to be optimistic: Last year, home entertainment revenue in the United States grew 0.23 percent to roughly $18 billion after seven years of declines.

Lionsgate has a penchant for developing and producing niche hits — from Tyler Perry's films to the "Saw" franchise. That has helped its home entertainment success, executives said.

"A side benefit of our genre focus, whether in action or horror, is we appeal to a younger, digitally avid marketplace," said Steve Beeks, Lionsgate's co-chief operating officer.

Beeks also predicted big things for UltraViolet, the cloud-based system that allows users to access their libraries of movies and shows on multiple devices. UltraViolet was developed through a consortium of all the major studios, except Disney, to encourage users to grow more comfortable with owning digital movies.

The format got off to a slow start when it debuted in late 2011, but has picked up some steam after partnering with Walmart's Vudu service. It now boasts 9 million accounts, up from less than 1 million a year ago. Beeks said he expects the service to enlist new retail partners in the coming months.

"I think this is going to be the year you see UV become a marketplace," Beeks said.

Lionsgate released its first UltraViolet enabled title last summer with "The Hunger Games."