M+E Connections

Lionsgate said Jan. 10 that it made another investment in the growing eSports market, this time in the pro eSports team Immortals. On the same day, company executives cited several growth opportunities for Lionsgate during an investor day presentation, held in Englewood, Colo., at the headquarters of Starz, which Lionsgate recently bought for $4.4 billion.

The company didn’t say how much it invested in Immortals, sharing only that it joined a consortium of investors that included Michael Milken and previous investors Steve Kaplan, co-founder of Oaktree Capital and co-owner of The Memphis Grizzlies and the Premier League’s Swansea City, investor Gregory Milken, Third Wave entrepreneur Allen DeBevoise and CrossCut Ventures.

The Immortals compete globally for more than 200 million fans in eSports competitions for the games “League of Legends,” “Counterstrike: Global Offsensive,” “Overwatch” and “Super Smash Brothers.”

The eSports market is projected to grow to more than $1 billion by the end of next year, and the “League of Legends” World Championships were played at a sold-out Staples Center in Los Angeles this past year, Lionsgate said.

Lionsgate’s involvement in eSports “creates tremendous opportunities to develop new content and utilize our suite of distribution platforms for a coveted consumer demographic with compelling engagement metrics,” Peter Levin, Lionsgate president of Interactive Ventures & Games, said in a news release.

Last year, Pilgrim Media Group, in which Lionsgate is a majority investor, announced it was partnering with ESL, the world’s largest eSports promoter, to create original eSports entertainment content for TV and digital platforms.

Their first collaboration, in partnership with Microsoft, will be centered on the popular Xbox game franchise “Halo.” Lionsgate was also an early investor in live streaming mobile gaming platform Mobcrush.

Starz is “very well-positioned to be very successful in both the traditional linear” and digital arenas, Jeffrey Hirsch, Starz chief operating officer, said during the investor day presentation. Starz now has 24.5 million subscribers, making it the number two premium subscription service, behind HBO and ahead of Showtime, he said.

The Starz Encore movie service, meanwhile, has 31.5 million subscribers, he said. On the direct-to-consumer front, Starz has a wholesale relationship with Amazon and its own direct-to-consumer offering for which it has close to 1 million subscribers, he said.

In December 2015, Starz launched into the digital wholesale market via the Amazon deal.

“To say we’re pleased with [the] progress of that product is an understatement,” Hirsch said. The app that it built in-house to reach consumers direct recently received the only four-star rating among apps of its kind on the Apple App Store, he said.

Starz sees “great opportunity in both the traditional” and digital businesses, he went on to say. The company can grow its subscriber base through traditional affiliates and it’s also well-positioned to gain over-the-top and “skinny” bundle subscribers, he said, adding there are 64 million “untapped” households in the traditional linear business.

As skinny bundles really start to take hold in the market and price points start falling, entry price points for viewers to access Starz will drop and “give us more access to consumers,” he said. There are, meanwhile, 50 million broadband-only households and 4 million mobile-only households, and Starz is “very well-positioned to go after” those consumers, he said.