Lionsgate Studios Corp. (LGFA) Earnings Call Transcript & Summary

All right. Welcome back to our next session this afternoon, on day 2 of Communacopia. I'm Brett Feldman, the firm's U.S. cable, telecom and media analyst. And I'm pleased to show you that we've got the trifecta here from Lionsgate. We've got Michael Burns, the Vice Chairman; Jeff Hirsch, the President and CEO of Starz; and James Marsh, who most of you know, who handles IR for the company. Guys, thanks so much for being here with us in this virtual format.

Thanks for having us.

Thanks for having us. Good to be here.

All right. Well, let's jump into it. We're now over 4 years removed from the merger of Starz and Lionsgate, which brought together one of the leading premium cable networks and a top TV and film studio. How do you see Lionsgate fitting into a media landscape where business models are changing?

Well, Jeff, I'll start and then you can jump in, if you would. Look, it's a whole new world. It's new technology. The only constant is change itself. We are rapidly changing at the same time as that we're very focused on the direct-to-consumer, and Jeff will talk a lot about that. We're very focused on a subscription model, not the AVOD model. And it's about data, and it's about global. And this is all very much about us being aligned with the studio, i.e., Lionsgate with Starz, because if you take a look at the 17,000 title library that we have, working in conjunction with Jeff and Starz on the studio side, on the TV production, but also that library working together with Starz, and we are driving significant growth on the Starz platform, which I'm sure Jeff will comment on.

Yes. Over the last 4 years, we've really been on a journey to transform Starz from a linear-only domestic network to what I would call today, a data-driven global streaming company. We're at a real key inflection point in the business where, in the next 2 quarters, we'll have more global OTT subs than we have linear subs. In the next year, we'll have more revenue from the OTT business than we do from the linear business. In the last 4 years, we've migrated the risk in the linear business to be more à la carte. So our incentives are aligned with the traditional linear partners, and so we've de-risked that business as well. And I think, most importantly, our content is working. We launched Outlander to its best season yet. We launched the freshman show, Hightown, which set all kinds of records for Starz, only to be eclipsed by P-Valley weeks later. And when last -- this past 2 weeks ago, we launched Ghost, which is the first Power Universe spin-off to records that we've never seen before. We saw a 42% increase in sign-ups on the Starz app. We've seen record viewership, record streams. And so the business has really transitioned to what I like to call now a true global streaming company that it really looks more like a Netflix and a Disney+ than anything else.

We were talking about -- we opened up by talking about the way the landscape is changing. Do you see benefits associated with being a reasonably smaller company in this ecosystem? Do you think you can be more nimble?

Well, I certainly do. I can tell you that Jeff turns on a dime. And if you take a look at how quickly he's gotten production up on the new shows, if you take a look at how quickly our marketing campaigns changed, the fact that he was very early to driving -- really spend a great deal of attention to data, I think that is a competitive advantage for us.

All right. Well, let's talk a little bit about the content that you're putting out there, particularly in the domestic market to begin. Your strategy has really been to cater to underserved audiences. This includes the Black community and, more recently, a pivot into female-focused content. Why do you think this content strategy is right for Starz as opposed to trying to appeal to a wider audience?

So we've always been that premium add-on service. We've always had content that is adult in nature, non-ad supported, deep storylines, authentic in terms of letting our creators take the story to places that you can't when you're an advertising-based business and we like to say it's content that people are really willing to pay for. I think you said we pivoted to kind of the female focus. But what we saw, as we got more and more of our data capability online, women were really driving our business. It was women and African-American women. And we know that it's working. We see it in our data. We see it in the explosive growth on our OTT service. And so we decided that we would stay really focused and actually go the other way where a lot of our peers are becoming broader-based services, really trying to compete in the ad-supported world, or really compete for that first kind of S spot in the home that we would stay to that premium tier add-on and really stay focused and go the other way. The data shows it's working. It's the right thing to do. 11 of our 16 showrunners are women. Of those 11, 5 are women of color. We have 70% of the leadership at Starz as women and women of color. And so we feel like it's the DNA of the company, and that what we put on the screen and behind the screen and how we manage the network is really focused on that. And it's working, and we're seeing explosive growth because of it.

It's sort of interesting that you talked about the data focus. When we sit here at this conference and we hear companies talk about being focused on data and insights, it's always to support an ad-driven model. So would you mind elaborating a little bit on exactly what you're learning, or whatever you can elaborate on, and how you're applying that data in a subscription-driven business model?

Yes. I think there's really kind of -- that's a great question. I think there's 5 components of the data capability that we brought online. The first 3, we're really, I think now, really using in a big way, and the next 2 are coming online next. First is, looking at story, while the content portfolio is still 99%, there is some science to it in terms of looking at storylines that match what we have. We have the largest composition of women in the premium network, and we have the largest African-American composition. So looking at our existing content, looking at storylines and trying to match those with new storylines to extend lifetime value and really drive accelerated revenue and drive churn down to low single digits are really important. We've been able to actually utilize it in the marketing side where we bought our digital buying back in-house because we knew that we were inefficient by about 20% by using a third party. So the data has allowed us to build that capability in-house. Now we have it -- we brought it in-house. We've plowed that 20% back into the business. And the third piece is we've really been able to go to our agencies and say this is exactly who we're looking for versus looking for look-alikes. I think that the fourth or fifth piece is probably the most important on a going-forward basis, and it's really scheduling of the network. In this click-in and click-out world, aligning your content portfolio to your core demo so that you can get a customer from one show that's 10 weeks' long into the next show that's another 10 weeks' long and another show that's another 10 weeks' long, to really reduce churn and accelerate the growth of the business is going to be paramount going forward. And we've really started to use our data to align our content portfolio to maximize our business. And then the last piece is when you really build this kind of retail business of scale, it's how do you understand how you're retailing: offer-driven, how long your offers are; what the prices are, price elasticity. All those fundamental retail components, I think, are really important as we continue to drive and this business gets more competitive. And so that's kind of how we're using data every day. Every decision we make is informed by data, and it's really helped us really explode the business.

Can you give any examples of how you've improved your schedule alignment based on the data insights you have?

Yes. So for example, we knew that Hightown had a great overlap between the Outlander and the Power audience, but Hightown premiered months before Ghost premiered. One of the things that we've been able to do in the app and on linear is schedule or auto-roll the Ghost audience into Hightown. And so we did that in the last 2 weekends. We actually doubled the premier audience by putting Hightown as an auto-roll behind Ghost, which gives us great confidence that we'll see a great increase in viewership in Hightown in Season 2. And so we've been able to use different content in different places to really extend that. We've also seen every month a reduction in churn by laying up the content behind each other. And so as we get into the slate in fiscal '22, we'll be fully deployed on that content schedule where we'll have something on the air at 8:00 and 9:00 for both of our core demos, 52 weeks a year, and you should see churn come down significantly and revenue and that segment profit accelerate.

So you've obviously shown an ability to really understand how to serve and entertain a couple of core demos. Do you think that you can edge that out? In other words, do you think that there are other demos that are underserved that maybe might have more overlap with the investment you're already making in your content?

We continually look at that in the data. We've brought in some third-party data sources to kind of expand that. But we think in the 2 core demos, there is a huge amount of opportunity still today. We're now looking at 12-month churn versus 30- and 60-day churn, and we see there's a great opportunity to increase the base at that 12-month point. So we're going to stay really focused on what we do and who we focus on, and we think we can continue to accelerate the business.

So then based on this target market that you're serving very well, what do you see as the right mix of original series, both in volume and in the aggregate amount you spend on them?

The spending question is a tough one to answer because not every show is the same. We've added some half-hour comedies into the development slate that are obviously different than others. We've got Girlfriend Experience that is halfway through production in the U.K. right now that is an indie type show that will be, I think, one of the best on TV next year, but that's a low-cost show. And so the cost kind of ranges from low to mid and to high. And so I don't think cost is a great indicator of success of a show. To me, it's about laying out the portfolio so that you have something on the air every week to serve those 2 core demos. And so we think we need somewhere between 14 to 16 originals to really complete that content portfolio on an annual basis.

It seems like if you really want your brand to continue to grow with your target demos, you want people to really, in those demos, see Starz as the place to go to get this type of entertainment. So how do you think about the importance of exclusivity of your content on the Starz platform? Because some of your content is distributed on other platforms already.

That's a great question. I mean you're speaking -- there's 2 pieces of our big content that are on other platforms today. I think those deals -- I know those deals were done before we really got into to this OTT business at scale where we are today. I wouldn't do those deals going forward. Exclusivity is super important to us. I think being the destination for the Power Universe exclusively, being the destination for P-Valley and Hightown and the White Queen, White Princess, Spanish Princess, makes us unique in a destination. It actually makes us a great partner to all of these broad-based SVOD services that are really not -- are going for more family fare. And so exclusivity, both on our -- even on the Pay 1 with Sony and our library is very important to us.

Jeff, I was just going to add, it is -- there are some hidden silver linings there. It's nice that actually some people discover Outlander, for example, on Netflix or Power on Hulu. And to see the original episodes of those shows, guess what, they have to come to Starz.

Yes. I was going to ask you, thinking about the library content. And as you become more successful in these core demos on Starz, how do you think about looking at that library content and deciding which of it actually should remain exclusive to Starz versus what you should be making available across other platforms, like you've done with Mad Men.

Michael, do you want to...

You take a crack and then I'll follow you up.

Look, as we've seen and we've expanded the business globally, now in 50 countries outside the U.S., all of the Starz originals are exclusively on Starz for a period of time. We'll assess each of those markets, including domestically, in 3 to 4 years on where we think we are in those markets and make a decision then. But I believe that if you're going to build enterprise value by building a subscription business, your content has to be exclusive on your service. And so that's how we've built the Starz global footprint.

And Jim Packer, on the Lionsgate side, has done a great job slicing and dicing windows in various places, so you do have exclusivity at Starz and other places for films. And again, our library is 17,000 titles. And the nice thing about, as Jeff mentioned before, being a data-driven subscription service, he knows -- when he's not promoting a specific movie, he knows what's driving new subscribers and what's not.

All right. I want to move on and talk a little bit about your distribution strategy in the U.S. Your Starz domestic service is still predominantly distributed through MVPDs. And while these agreements have increasingly become based on an à la carte model, you're still ultimately marketing into an ecosystem that is seeing declines in subscribers. And so to what extent does your higher mix of direct or à la carte customer relationships give you a little bit more flexibility to think about how to drive revenue growth as this landscape shifts? And then, ultimately, what's your strategy for continuing to reduce your reliance on MVPDs to acquire subscribers?

Well, first, I would say, I disagree with your opening comment. Two of our top -- 2 of our top 3 distributors are digital distributors, and one of them is our own app. And so we've really migrated away from being super dependent on the MVPD relationships, and we've really built other distribution mechanisms so that we're less dependent on that. But as you said, look, we are -- I come from the cable business. I spent 15 years at Time Warner Cable. I think there's a ton of opportunity for a premium, non-ad-supported network that's not fully distributed like an advertising service. I think we're seeing that with our relationship now with Comcast where we're growing the business significantly together. I think there's a ton of opportunity to be creative as the bundle starts to break and put Starz in Flex, in broadband, into underserved homes. So I do think there's a lot of opportunity to still grow the linear business because we are not fully distributed in that sense. But again, we've de-risked that business by aligning our incentives to being à la carte together so we share in revenue. So the better we do with our cable partners, the better they do. And I think that it will allow us not to have some of the flare-ups that the business has seen in the past. But again, as I said earlier, we'll have more digital subscribers globally than we have linear subscribers. And so we have multiple revenue streams now, so we're not just dependent on that linear platform.

Can you give us any insights into which of these non-MVPD platforms are really becoming significant in helping you acquire those digital customers. We're always interested in whether Amazon or Roku or others are playing a bigger role in this.

I think all of them are playing a significant role, including our own app. The great thing is we're sharing data across platforms now, which is something we never did before. And I think everybody has a realization that if we share our own propriety data with each other, that we can -- all boats rise in a tide. So I feel like those relationships are really strong. And obviously, the Rokus, the Hulus, the Amazons are really driving the business as the business starts to bifurcate into the digitals and the linear subscribers. I would also say the Rokus, the Flexes on Comcast, there are an array of opportunities for us to continue to grow our business as well.

And just to be clear, and I think you sort of answered it, but it seems like you are able to get the data that you desire out of the viewership regardless of who has helped you distribute it. Is that correct?

That is correct, yes.

And I know this is going to be a difficult question maybe to answer, but we get questions about the economics of sharing revenue with these different distributors. Is it a fairly consistent model? Is there any insight you can give into this?

Yes. I mean I think it's been publicly talked about there's revenue shares across the board that are -- whether it's 70-30, 85-15. Some of the operators we have unique deals based on volume-based rates and -- but it's -- I mean, look, we share in the revenue, and that's a good thing because we all -- the better we do it, the better we all profit from it, and we like that model.

Is there a meaningful difference in the churn between your streaming subscribers and the subscribers who come to you through MVPD relationships?

I think you have to think about the MVPD in 2 worlds, right? If you're in a bundled package, like we used to be a significant package on Comcast, our churn is the churn of kind of the franchise or the footprint. If you're à la carte, that looks a little different. And I would say that the à la carte churn on traditional probably looks the same as it does on the OTT side. The good news is, on the OTT side, we're able to manage that better because we control the customer, and we can actually schedule -- like I said, schedule out a portfolio approach that will bring churn down. But ultimately, that should help the traditional side as well.

With Comcast, one of the things they're doing is they're deploying Flex boxes, right? So they're actually starting to facilitate streaming in the same way someone, like a Roku, would. Do you look at that as an opportunity to work with MVPDs to help you distribute the streamed product as opposed to the à la carte product?

Absolutely. It's -- their footprint -- we want to be with our partners as they change their methodology of distributing to consumers as well, gives us a lot more flexibility to either embed or bundle or play with price. So we're thrilled that those products are continuing to get pushed deeper into the service. X1 is a great example of another service that we're playing on. So we feel really good about how we pivoted that relationship and the growth that we're seeing there.

All right. Let's talk a little bit about STARZPLAY International. So you launched the service in the international markets not too long ago. And you now have amassed about 3.4 million subs, of which, I believe, 1.4 million are the OTT service. Can you give us any insights into how usage on the international app compares to the U.S. app? And are there any noticeable difference in viewing habits or churn?

It's a great question. Look, I think we've built a really unique asset, launching STARZPLAY into 50 countries around the world, coupled with the STARZPLAY Arabia joint venture. We have our app. This is primarily a wholesale strategy to launch. We do have our app in 8 countries. It is the same app that we have domestically that we retrofitted for the world. So we do get all that first-party data back. It is much earlier days. They were probably 4 years ahead domestically. So the churn characteristics that we see on the app internationally look a lot like the early days that we saw domestically. The content portfolio is a little different. We do have a lot of -- about 1/3 of the content is bought from third parties, 1/3 is from Starz and the rest -- the 1/3 is from the Lionsgate library, which has really been a great addition to the service and allowed us to expand broadly in a rapid pace. For example, in the U.K., we have the Lionsgate Pay 1B, and those movies are performing really, really well, and that's been a great addition to the service. So we're learning as we go. We are seeing great growth as we launch markets. We just launched Brazil, and we're seeing some great launch growth there. We just launched Ghost globally day and date with the U.S. and U.K., France, Brazil, Mexico. We saw great, great sign-ups there around the world. And so we feel really good about the asset we've built outside the U.S. And like I said, we've got to be viewed as a global streaming service now because of the scale of where we are.

Can you give us any insight into markets where you're planning on expanding for the remainder of this year and into next year?

Right now, in the countries that we're in, we want to go deeper on distribution relationships. So in the countries that we -- like, Spain, where we have 4 or 5 relationships, we see great subscriber growth. So the goal right now is to go deeper in each of the countries that we're in, not expand past that and get -- so that we're fully distributed in those countries. And then we'll look to move outside of that footprint as well.

When we were talking about the domestic product, the thought process you have to go through between how you think about library content and deciding whether it makes sense for that platform or for something else, in some ways, it's easy because you have a very clear demo that you're targeting in the U.S. So what's that thought process like as you go and look at the STARZPLAY International product and decide where you want to put your content?

So because 1/3 of it is coming from Starz, there is somewhat of that fundamental female-focused content that is coming from the domestic business. But again, it's early days in international. And so we like to say that we're putting together the best of global SVOD. So we've got The Act, Killing Eve, Castle Rock, shows like that on top of Ghost and Power in some markets. And so because it's early days, we're really learning what the right content mix is going to be. And so a little bit of it is putting what we call some of the best U.S. shows on the service, trying to see how they go, getting the data learning, and then we'll start to make more informed content decisions as we go forward country by country.

Also, in terms of what you're learning right now, I think you're working with, like, 58 global distribution partners. What have you learned about which ones tend to be more successful? And even if it's not naming by name, maybe just the characteristics of what have been really successful distribution relationships.

I think the folks that really understand how to highlight the content and build the brand on their IP services but as well as go back and forth between their traditional service to drive the business, we've seen great success there. Obviously, the more that we work together to build content for their consumer and spend against their platform, the better we do. And so I think we built this service on kind of really 2 distribution strategies: a global strategy, which is the Amazons, the Apples, the Googles; and then these local partner strategies, which is the Telefónicas, the Oranges, the Izzis, the Claros. And then in certain markets, we put our app. And so we're seeing great success on Amazon all over the world. In a lot of markets, we're the #1 service in Amazon. We've seen great success with some of our local markets. And so we feel really good about the path we're on. We're on schedule to hit that 15 million to 25 million subs by 2025, and ARPU kind of is right in line where we thought it would be.

All right. Let's move on and talk a little bit about your theatrical business. And we've seen studios embracing new forms of film release, and that's really by necessity because theaters have been closed, and you're part of that as well. Do you view the changes in the window that we've been seeing here during this lockdown period as temporary in nature? Or do you think they're here to stay? And really, what model do you think makes the most sense?

I think theatrical business has changed forever, and it probably took a pandemic to actually start to move that along. We're very interested in the -- obviously, the deal that Universal did with AMC, the idea that you have 3 weekends theatrically and then some sort of rev share arrangement that -- at least that's what the news reports, but that's certainly interesting. But if you take a look at what's happening -- for example, we have a movie, Antebellum, that we made for the right price. It's a really good movie, by the way. And what happens is that we're releasing that theatrically in some international territories where theaters are open. At the same time, we're going to release it PVOD in the United States, and then there'll be an SVOD window right behind that. All of those windows are being sliced and diced dramatically. Joe Drake has done a terrific job of ramping up production theatrically because we -- at this moment in time, and I think it's for the next few years, we're going to have a lot of different options on how we're going to release those theatrical titles.

And what about for some of your bigger franchise movies like John Wick or The Hunger Games films? Do you really need them to premier in the typical theatrical format? Or do you think that there can be flexibility there as well?

I think it's going to depend on the consumer and depend on, for us, to figure out what the economic model is. But do I foresee that John Wick and the next Hunger Games movie are going to be theatrically released? Yes, I do. However, will the windows change? Yes, they probably will. Will there be a lot of different variations on the theme? For sure.

And have you had interest expressed to you from some of the new streaming products about gaining exclusive or premier access to your theatrical content? Because I think that what some of these services have realized is that if you can drop big premier movies into the service on a regular basis, you're going to do a better job reducing your churn.

Yes. And obviously, we made a deal on a theatrical title that we had run. We look at all the options to try to figure out what the right economic formula is. And of course, everybody is looking for product. Production has been shut down. So again, I think we're -- in the right place at the right time, we've continued to make a great deal of content where we've ramped up production -- just ramped up production on a bunch of shows on the Starz side. Joe has done a great job with the theatricals, theatrical production, which is up and running. We got a lot of stuff in the can. It is definitely a seller's market. We just have to try to find the right windows, the right economic model on each one of those pictures.

And I want to spend more time talking about that because I think you're making a good point here. I mean the demand for fresh content really probably has never been greater. When we did our initiation report on the media sector several weeks back, we were trying to show what the streaming market looks like through the eyes of a consumer. And we had to limit the exhibit to 3 dozen streaming products because after that, like the font was getting too small and you couldn't really see it. So it's a pretty crowded marketplace, and they all need to figure out a way to differentiate. And we even had this interactive feature where you try to narrow it down based on what you want, and you still can't narrow it down. So inevitably, someone's going to rise up, and I think that we all appreciate that possessing and exclusively having access to premium content is going to be probably a key point of differentiation. And as you pointed out early on, your library is extraordinary. Your production capabilities are proven. And so I think I just want to dig into it more. So if you look at that landscape, what do you think might be the greatest untapped potential for your production capabilities and your library beyond your own OTT services?

Well, I think it is a good time to have a lot of options on where to license your content. I think it's important to note that when we talk about Starz for a moment, Jeff certainly has a look at a lot of the product that we have, whether that fits, we're not trying to be all things to all people. But when we talk about the core demos he's going after, the underserved market, certainly, women is not a small one. It's half the population of the world. We think Starz has hit the tipping point now on the OTT. What happens, he's got a bunch of hit shows, and that certainly helps. So people are talking about it. But I think what Joe has done on the film side of the business, he's had a very specific disciplined content strategy, and he's reorientated it's not about the budget, it's about making good, quality movies. And then what happens is, in this environment or in the environment going down the line, you will have, in many cases, bidding wars for that content. And my sense is that Starz will end up with, certainly, a license in some particular window on that good content. But whether it's going to be in the first, second, third cycle, who knows? But I do believe that this is going to be a seller's market for some time to come because a lot of the production hasn't -- this new content hasn't been made. And if you take a look at these giant behemoths that are now, I don't want to use the word but I will, hoarding their own content for their own platforms, well, that gives us a great deal of white space in a marketplace in which to fill that void.

Having this conversation on a screen is just a constant reminder we're in the middle of a pandemic. And so I got to ask a couple of questions just about kind of where your business is in terms of recovery or trying to get back to normal. One of the most obvious areas is production has been shut down significantly. Can you give us an update on where we are in terms of getting back to normal levels of productivity and film production?

I think we're ramping up pretty quickly. I'll let Jeff talk about Starz, but I can tell you that Joe Drake and the Motion Picture Group have got movies going in a variety of places, from London to Atlanta to Bulgaria and even Los Angeles. So we're following the protocols, which are a giant pain in the butt, but it's the right thing to protect all the people involved. But we are ramping up very, very quickly. And Jeff, why don't you talk about what you've got going?

Yes. We've got 3 shows in production right now. Girlfriend Experience in the U.K. is halfway through its production cycle, and we continue to have no issues there and the protocols are continuing to work. Two weeks ago, we started production on the Ghost and the Power Universe in New York. And last week, we started shooting a new show called Heels in Atlanta. And so we got 3 up and running now. October, we'll bring 2 more online. And then November, we'll bring a couple more online. And the hope is by end of year, early January, we're back to full steam ahead on production. We also have the benefit of shooting a year in advance. And so when this hit, most of our slate was already in post-production in some form. And so we've been able to launch 4 new pieces of content during the pandemic: Outlander, Hightown, P-Valley and Ghost.

I was going to just add one more thing, Jeff and his team very smartly bought a bunch of stuff that was in the can for others. And so that's been great.

Great. And just one more question on the film side. As you think about just the implications of getting back to normal, is it your expectation that as you can do that, there might be a surge in productivity and there may be a decrease? And have you at all changed your view on what the right volume of film production should be in this world as we emerge from the pandemic?

I think the short answer was, as long as you can shoot the product safely, we're going to make as much product as we possibly can, good product, right now in this marketplace because, as I said, there's going to be an awful lot of demand.

All right. I want to talk a little bit about the television business here. You've guided to 50% growth in segment profit for the TV studio in your fiscal '21, and that reflects the benefit of multiple syndication agreements, including Mad Men and Weeds. You struck a pretty unique deal with Mad Men using various partners across formats and markets. Can you talk about why this was the best deal for this series? And to what extent do you think it's a model for future deals?

Well, I think it's interesting to note that the Mad Men license this time around is a significantly shorter run than the last one, and the money was more, it was higher. And obviously, we're going to go out in the marketplace. You mentioned Weeds. I think, again, you have so many different platforms that, in many cases, could be deemed complementary. So again, we're going to ring the cash register in as many of those places and slice those windows up accordingly so that we can actually monetize our content to the highest price point as possible, and that certainly is working right now. I mean just look at our library of products. You could take a little bit of it, see it at the end of last quarter. Again, when you have people that are not letting their content or their library product be available on other non-owned platforms, well, that creates a real opportunity for us.

All right. Well, I've got just one question left for you guys. In the past, you've discussed delevering to about 4x net debt to EBITDA. You're pretty close to that level. And so the question is, how do you think about evolving your capital allocation as you get to that point? And has this pandemic changed your view on what the risk profile of the company should be going forward?

No, it hasn't. We've told The Street we're going to delever. We told the rating agencies we're going to delever. We've been doing that. We're investing a fair amount of money into, as you know, Starz, and particularly the international launch. We plan on continuing to do that as Jeff showed great results coming from those territories. So do I feel like -- I mean last quarter was a little bit of an anomaly because we didn't have the spend. But do I think that we should get down, ultimately lower our multiple 1 turn? Yes, that's probably prudent. But again, if you take a look at where the quarter ended, last quarter, it was $300-plus million in cash, and we hadn't drawn a nickel on our $1.5 billion credit facility. So yes, we want to delever. Yes, we want to grow the business, and we're going to put the pedal to the metal in a lot of these opportunities where we think we can actually continue to accelerate the tipping point of adding OTT subs around the globe where we can control our own destiny and as a very high-margin business.

All right, guys, listen, that was a terrific overview. I appreciate so much that you participated this year in the virtual format. And we certainly look forward to having you back here next year, hopefully, in life.

Thanks for having us, Brett.

Brett, thank you.

See you guys. Thank you.