Starz hit a subscriber milestone in the third quarter, reaching 22 million for the first time in its nearly 20-year history.
Albrecht cited the solid viewership for fantasy miniseries “The White Queen” (pictured) as a success for Starz, particularly with women. Starz subscriptions are up 6% since the end of third-quarter 2012. The Encore group of channels hit 35 million subscribers, up 2%.
The pay cabler’s third quarter earnings delivered an 11% year-over-year hike in revenue, to $446.1 million. Operating income inched up 1% to $100.8 million. while net income slipped to $53.1 million, from $55.2 million in the year-ago quarter.
During a conference call with analysts Wednesday, Starz CEO Chris Albrecht emphasized the cabler’s focus on ramping up original series production in the coming years.
Starz will have increased resources to spend on producing and marketing its own series as its commitment to licensing new theatricals drops after its Disney output deal runs out in 2016. Disney’s pay TV theatrical pact is migrating to Netflix.
Analysts pressed Albrecht, who is finishing out his first year at the helm since the Starz-Encore cablers were spun off from Liberty Media, on whether Netflix’s growth offered any lessons for the streamlined Starz. Albrecht was quick to respond that the reverse was true, in his view.
“They’ve copied more from what we’ve done than we could copy from what they’ve done,” Albrecht said. He noted without getting specific that the nascent prospects for other over-the-top content distribution services are making premium content brands like Starz more valuable.
“Anything that gets you closer to the consumer at a (better) price point is going to help our business,” he said.
At the same time, Albrecht sang the praises of Starz’s new pact with Time Warner Cable, inked this past summer after years of strained relations between the two sides.
TW Cable is giving Starz and other premium brands a big marketing push in key urban markets where Starz had been handicapped by lack of promo attention from the nation’s second-largest cable operator. That push has accounted for some of Starz’s subscriber growth.
“We’ve had the chance to re-enter markets we were virtually shut out of for years,” he said.
During the call, Albrecht again reiterated Starz’s intent to field 50 hours a year of original programming in 2014, and up to 75 hours in years to come. He talked up the prospects for next year’s drama slate including the Michael Bay produced pirate drama “Black Sails,” which bows in January, the sci-fi vehicle “Outland” (based on a novel series) and urban drama “Power.”
The 10-episode “White Queen” miniseries was a win for Starz because it clicked with viewers and sold well in internationally. Starz retained rights in territories to the BBC co-production. A followup project, “White Princess,” is in development and may or may not wind up being a co-production with BBC again, Albrecht said.
Higher subscriber revenue thanks to a recent slate of new pacts with MVPDs helped boost revenue, as did homevid distribution of Weinstein Co. film titles and AMC’s juggernaut “The Walking Dead” through Starz’s Anchor Bay unit.