Starz Entertainment Corp President & CEO Jeffrey Hirsch Talks Streaming
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Bloomberg Audio Studios. Podcasts, radio, news. Joining us now, I'm pleased to say we have Jeffrey Hirsch. He is the CEO of Starz. Jeffrey, great to see you in person. Thanks for having me. Excited to be here this morning. And I have to imagine this is some validation, a real proof of concept that Starz should be a standalone business. Yeah, look, I think the corporation made the right decision to separate the companies and put the value in both the sides of the Lionsgate side and the Starz side.

I think you're seeing the great decision by the board coming to fruition with the stock price on both sides moving and putting the value in the right place on both companies. So what is your target audience? I mean, we were just talking a little bit during the break about

HBO Max has made a number of changes. You've worked there too. So what are you doing at Starz? What's your focus? Yeah, we're really focused on just really two core demos, women and underrepresented audiences. When we launched our OTT product in April of 2016, what we saw was driving our business was women. And so we leaned into that very significantly. And our programming mandate now is about

the narratives for, by, and about women and underrepresented audiences. Shows like Outlander, shows like Peeve Valley, the Power franchise really leans into that. It's very adult, very R-rated. We don't have any advertising, and so we'll continue to really focus on that. And that makes us a very complementary bundling partner to most of the Broadway streamers out there that you see today. So we think we're really uniquely positioned in a very competitive space today.

Rated content not something that you would pop on used to call it skin a max, but that's yeah That's what you are now. No, I think we're a little more elevated in terms of But I appreciate the reference no look I think there was a time in the place that Cinemax had its run back in the day But you know we've got some of the biggest shows on television with Outlander We have the prequel coming this summer on August 8th. We premiere BMF this weekend and these you know it's really more of a

Where the story goes naturally, we go there. BMF is black mafia family. Yes, 50 Cent Show, really big show for us. We're excited to have it come back on the service. But for us, when the natural story goes to certain places, we allow our creators to go there, whereas other services kind of pull them back because they want to put ads against it. So there's plot, of course. And I mean, you think about Game of Thrones, the best television show of all time, in my opinion, obviously was Arlen. I hear people in this office saying that about Outlander.

I mean, they love it. True, true. I mean, Outlander is one of the biggest shows on TV. And, you know, we have a prequel coming, which takes us back to 1700 Scotland. And it's the love story for how each of the leads from Outlander's parents met and fell in love. So there's a little bit of a Romeo and Juliet story on one side where it's forbidden clans and they fall in love. And the other side is a World War I story. And so we're really excited about it.

But I think all of our shows are, you know, we have five shows that do between 9 and 12 million eyeballs a week. Those are some of the biggest shows on TV, and so we're really excited about our content strategy and the place that we play in the whole ecosystem. This leads us to my next question. We heard from your chief financial officer recently on your conference call with analysts saying that you see roughly $700 million growth

of content spending in 2026. Can you give us more detail on that? Is that for some of your existing franchises, your existing shows, or are you putting that towards developing new content? So what's in that number is a combination of our big originals,

there's a Lionsgate pay one which is the first movie windows that come to that and a universal pay two and we think that the portfolio of content really makes us a very compelling service at our eleven dollar price point and you saw that in the first quarter numbers we actually grew the US subscriber base total by almost two percent in the first quarter which is a really really good accomplishment in a

very competitive space but we're always we have a you know a programming group we've got 40 to 50 shows in development at any given time and as we you know we talked about on the call we want to go from a 15 profit margin to a 20 profit margin by 2020 end of 2028. one of the ways that we get there is actually by turning the slate over and putting new shows on the air that we can own

as we separated from Lionsgate. And so ownership economics is really important because season ones are much cheaper than seasons five, six, and seven. And we can also put international sales back into the business, which is another way to net down the cost of a show. And so as we separate, we just announced that we opened four writers rooms in the last couple of weeks on some really compelling shows that I'm excited about.

As we start to move into '27, you'll start to see more of our own shows come on the slate. I imagine, you know, with something like "Outlander," you can get people to come and pay $4 a month, which is what your special offer is right now. Can you grow that over time as you have

these massive competitors like Netflix, like HBO, or do you have to hold it at a lower level? - So, one, we don't see them as competitors. We see them as complimentary services. If you think about the old traditional world, Starz was always set up as a cherry on top or an additive to broad-based services. So Comcast for a long time sold Starz on top of expanded basic television.

We think that world gets replicated to the digital world, and so we've always positioned ourselves as being a complimentary add-on to the broad services like Netflix, like Amazon, like Hulu. And so we will always be priced well below the broad-based services so that we are viewed in the consumer's mind as complimentary and not competitive.

Before we let you go, I do want to talk a little bit about your business because I believe you derive about 70% of your revenue from streaming. That leaves about 30% of your company exposed to cord cutting. So how do you plan to deal with that over time? Is that something that you're trying to whittle down, that 30%?

Look, we really follow the consumer, right? And so as the consumer has shifted from linear to digital, we kind of followed the consumer there. But I think there's a real value in still the linear business today. You know, what's interesting about all of our customers, 80% of all of our customers are either...

added on or a la carte, which means customers chose Starz. It wasn't we're in a bundle and so that we see the cord cutting and we're just the natural evolution of cord cutting. People actually pick Starz because the content is working. And what it also means is that we actually are a revenue generator for our partners. And so I actually think that there's a lot of opportunity still in the old traditional world for us as the content continues to roll out, that there's opportunities to grow that business. And actually what we saw at the end of the first quarter was a lessening of the cord cutting loss. Now,

it's a little bit of time i i wouldn't claim victory on that yet but our hope is that that that law starts to slow and that's added into the long-term health of the business the data that matters for your investments the entire auto sector is higher today and analysis on the companies making news on wall street tesla's been a stock that's been in focus shares have really been all over the map this morning listen to the stock movers report from bloomberg let's talk about

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