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

Welcome back, everybody. I'm Jessica Reif Ehrlich, senior media entertainment Analyst at BofA Securities, and we're very happy to finish our day with Jim Packer, President of Worldwide TV and Digital Distribution from Lionsgate. Jim, thank you so much for joining us.

Thank you for having me.

So let's start in light of Amazon's acquisition of MGM for $8.5 billion, how much of the value of that deal do you think can be attributable to the MGM library? And what does that say about the value of Lionsgate library?

Well, I think a lot of it can be attributable to the library. I think the question is what part of the library. I think there's 2 big pieces that Amazon is looking at. The first is obviously the intellectual property that can be remade. And if you look at Amazon over the last 2 to 3 years, many of their really successful films were based on studio IP that they licensed. They weren't necessarily all things that they made is most, I think, probably 60%, 70%, 80%. The -- you can look at Coming to America as an example of 1 of those. They were studio-based deep IP. And I think that's one of the catalysts for Amazon. I think the library itself -- I've had a lot of people ask me, well, Jim, are they just going to put it all up on Amazon Prime and it's just going to be there forever? And the answer might be no, because what I've seen from all of the platforms that licensed from us, and we're in business with everyone, is there's cycles that every single platform goes through. So they don't necessarily want to buy something and keep it up for 36 months straight. They want it up. It gets in the algorithms and it gets a lot of utilization. And then it can rest. So I think that they will use it, but I think that content is not like they're going to stop licensing at all. I don't believe that. And I think one of the relevant things, if you look at the valuation, I don't think people give us enough credit for the newness of our library. I mean, I was there just because you and I cross paths when I was there. That library is a really interesting library, but it's an older library. And they have not been refreshing it at the level that we've been refreshing our company's library. So I went and looked at some of the numbers, which I thought was really kind of interesting. In the last 10 years, wide release movies, which are a key component of kind of what you can actually drive evaluations, they've had 44 wide releases. We've had 121. So there's a pretty big significant difference in that. And then if you look at the box office in the last 10 years of those wide releases and some of the small releases, $6.5 billion for Lionsgate, $3.1 billion for MGM. So it's almost double the box office. And that box office is a key indicator and a key driver for future valuations. And then when you look at newness for all these platforms that want to license, we also do a lot of very small, 10 screen releases with Bruce Willis movies and all these different kinds of movies. In the last 10 years, we've done 450 of those. MGM has done 26. So overall, new content, refreshing the library. We've done about 700 movies in the last 10 years. They've done 160. So I think that we're well positioned as a company for a really fresh and vibrant library that can take advantage of whatever the opportunities are, that -- whether it's licensing or strategic with Starz or what other opportunities there are, we have a really interesting position in the market.

Right. So streaming just continues to grow. I mean it still feels like pretty early stages for like some of the bigger, newer companies. So what does that say about really library values and how they've changed -- they've only grown over the last few years, but given the growth of [ Bios ], sounds like -- it just seems pretty obvious. I don't know what can you add to that conversation? Like where do you think -- what happens with libraries and library values?

Well, we've leaned in, as I think you've heard in our last earnings call, with libraries. And we've actually -- I think we not only have acquired Spyglass but some other libraries. So we've added a couple of billion dollars of library value just as far as box office value to our company. And the reason we do it is because what we're seeing trend-wise is nothing but upside in kind of the ways we can monetize. I'll look at as an example, our AVOD revenue just in the U.S. in 2016, we had about 14 clients, and we were doing less than $10 million of revenue in that segment of my business. In 2021, we have close to 40 AVOD clients, and we're going to do almost -- well, I think we're going to do over $100 million. So it's been a very quick growth rate. And I look at the amount of buyers on a title like Expendables. I'll give you a great example. Expendables, one of our better franchises. In 2018, in an average year, we'd have 8 buyers. Now we have about 15 buyers. So the people that can afford something like Expendables because it's not an inexpensive movie, has gone up. And so when you add that across the portfolio of films, I think it's a really, really interesting thing. And the other part of it that I think has been helpful is territories that you look at and you say, okay, what are you going to do with your library in Latin America. Latin America is up about 50% in the last 5 years for us. Why? HBO Max is launching. Netflix is there, Amazon is there. Paramount Plus is launching. Star is launching. So -- I think Star just launched. So if you look at the actual number of buyers down there for a library like ours, it's really a question of how do we win to it to maximize, not do we have enough buyers. So -- and I think that the real interesting thing, Jessica, and I think this is something that I've noticed just anecdotally is there's a big difference between studio branded, deep IP that's been through the $50 million marketing campaigns. When you look at film or big marketing campaigns on TV shows versus movies that launch on a streaming platform that come and go. And they don't get that treatment. They don't get that real theatrical. Then to home video, and then to physical disk, and then do TV, pay TV, then the basic -- if you look at that whole thing, I'll use a little interesting story with my son, who's just graduated from college on the East Coast. And we were in -- we were in breakfast with about 7 of his friends, and we said, okay, who knows the movie I Am Legend, which is a Will Smith movie and all the hands went up. Where did you see it? Just out with my parents, out-of-home videos. Okay, who knows Bright? One hand one up. Bright is a Will Smith movie on Netflix. And that's just because it came and it went, and it didn't go through that process of really making an iconic deep IP. And it's one of the reasons why this summer, twilights, all of our twilights were in the top 10 on Netflix in the U.S. And here we sit today even with all the product that they have and all of our movies made the top 10. So I think that's an example of why libraries continue to hold their value.

[ Rich Gulf ] made the point on [ Deatrivo ]. He was on right before you, and like streaming movies just what are they? What kind of brand awareness are they? But let me take the other side of what you just said, which is there's so much production going on. Everything is sort of ramping back up post -- well, still with COVID, but this accelerating investment in production both film and TV for all of these streaming services. Everybody is investing more in content. So the question is, like, how do library values keep going up if there's such enough funding of content going into this ecosystem? So there's more buyers, but there's also a ton more content.

Yes, but look at all -- who's the biggest producer of that? Probably Netflix. And I was actually looking at a stat. There's an interesting stat for the 2021 season, new [ trip ] to digital original premieres, Netflix has had 44. Prime Video, 9; Disney, 10; Hulu, 8; Apple TV, 6. Those are like digital native, original big scripted shows, 44. But how many of those 44 are available for licensing? 0. Netflix does not license their content. So the fact that there's a ton of production being done, if it was all available to everybody the way that many companies -- if you look at all those, even Disney doesn't license their content anymore, right? They make their originals, they make it for their own platform. So how does the libraries that are still available can easily compete in a marketplace where not only do these platforms need to supplement what they have because they can't do it all with their originals, they have to have other products around it. But they also -- they recognize the value of what I'll call comfort food. Dirty Dancing is a classic example of one of our titles that continues year after year to be our #1 international library tail. I mean, after how many years, and we're going to reboot it as a new movie. So those really deep catalogs where you have this kind of IP I think, Jessica, will still continue to be able to have a growth trajectory as far as their revenues because many of the -- much of the new production is not going to be in circulation.

Right. So with all of the consolidation that's either occurred or going to occur, meaning you have Warner Bros. and Discovery about the combine. Comcast at Viacom have a JV for parts of Europe. Disney, obviously, we know just 2 or 3 -- or 3 years ago, bought -- most of 21st Century Fox assets. How did these consolidated and big arm entities, how much levered content do they need?

Well, I would say I've learned a lot from Netflix because they were the first to be big and big very quickly. And I think 2 or 3 years ago, I would get a question that was, Jim, are they going to ever buy a library again from you? Are they out of the business? Or will they still be a buyer? And we're just about to finish one of our bigger initiatives right now, which is a big licensing initiative. We do one globally, internationally and domestically. And I will tell you that Netflix is in the top, I'll call it, the top echelon of both initiatives, buying content from my company globally. And I think the reason for that is they realize that you need to have things around in your store that people know and remember. And that's important to give you value for your services. And attributable value to the service. I personally -- I don't know about you, but when I go on Netflix at times, it's hard because there's so much new stuff. And there's so much, honestly, amazing content being made, but I don't know a lot of it. And so I have to make a decision, do I invest in something new? Or do I go watch something that I'd watch a couple of episodes before and I want to get back into it. And so those are the kinds of decisions that I think these platforms are going to continue to -- I see no buyer that is a big conglomerate, nobody stopped buying from, Jessica. Nobody said we're out, we're done. We don't need anything more. We're going to just use our own content. Not had that conversation onetime. As a matter of fact, I think the conversation was really interesting with Amazon after the first deal. It was, no, no, no, we're going to keep buying. We need you, Jim. Don't worry. Like -- as I said, well, maybe you don't need a big studio iconic IP anymore. Oh, no, no, no, this is just -- this is a bigger picture thing, and we're still in business. So I don't think it's going to change much. It may change a little bit of the volume per player, but I don't think it's going to make anybody get out of the business.

Okay. Do you think there will be a noticeable pivot away from film to more TV series because of who the buyers are?

No, I haven't seen that, so the answer is no. I think that series will tend to be more of the drivers, it feels like, although Netflix is doing some big film. Obviously, there'll be drivers too, but series tend to be the bigger driver for these platforms. But we're licensing film and TV, and it's been a pretty good mix. I haven't seen anybody get out of either genre at all as far as either licensing or, from what they tell me, their appetite on production. So I haven't seen that.

Right. I mean, I know you have library, but does this impact the kinds of things you either -- Lionsgate produces or buys, whether it's film or TV? Does it push you one way or another because there seems to be demand for both? I don't know, maybe you...

No, but we have a huge strategic relationship with Starz. So from a production standpoint about what's new and what are we putting our resources behind. We will, number one, primarily make sure we take care of whatever the appropriate shows are for Starz. So that's a big push of ours. They buy shows from others, but they buy a lot from Kevin Beggs and our TV group. But my team, when you look at [ Guppy Cabernas ] and [ Ryan Lowery ], who run our global distribution group, they get 5 or 6 or 7 up to 10 shows a year from Kevin Beggs that are Lionsgate shows. So we still produce everything from Home Economics on ABC, Ghost on CBS. I think one of the more interesting things you're seeing is look at Zoey's Extraordinary Playlist, which was a big NBC sitcom. Went for 2 years. Incredible loyal fan base. And then all of a sudden, didn't get renewed at NBC, but Roku stepped up and bought a 2-hour holiday movie. So I think that's an example of where you can kind of pivot between the 2, Jessica. You said a 2-year TV show, but now we're making a Christmas movie. So you kind of go back and forth a little bit. And I think we're very opportunistic in that way. We will produce what we think is commercially relevant that has a good P&L backing and that we think adds to our library.

Right. And then, Jim, you just mentioned that more of the streaming players are keeping -- retaining content exclusively for their own platforms. So do you think that because of that, there is a constraint on like the supply constraint on film and TV series? And if so, is that an opportunity for you over the near to medium term?

Well, it's been a little bit of a benefit short term, like Warner Bros. pulled back a little bit when they were making their own -- making decisions what to do with their own stuff with HBO Max and Turner, and we would step into that void a little bit with others. Disney stopped licensing a lot of their Disney brand. There's no Disney branded content in the marketplace at all. There's still FOX content that they're licensing. But I think what's changed for us is that the trends used to be a year or 2 trends. And then they became a yearly trend. And now things can change in a matter of a few months. So we have to be really -- my team globally has to be in touch and nimble and always remember that somebody could -- we had a couple of situations where people had originals planned for their platform. And the COVID situation hit, they didn't get the original when they wanted, and they become a very good buyer of ours very quickly on a short term situation. So we have to be very nimble that way. And I think the other thing that I am seeing trend-wise, which is good for us, is we're doing less longer windows. Licensing for all the studios, years ago, 10 years ago, you do a year window. You do 18-month windows. You do longer windows of your content, whether it be film or TV. And while TV is still a little bit longer, film has gotten shorter. So the ability for us to cycle between different clients and also make sure that we have film in place for Starz has been made much easier because of that.

Well, on that windowing question, I mean, it does feel like windows permanently shrunk for theatrical films. I mean -- yes, the way this collapsed was basically 50%. So what does that mean for Lionsgate? How do you possibly get to the library?

Well, I mean, I don't think it's permanently changed. I think it's 45 today, as you and I sit here. What it's going to be to tomorrow? Yes. Yes. And I think it's -- I think we're going through a big experimentation phase personally right now. I think if you look at the models for film, Disney is going to do some at 45. Disney has done a few where they have -- I watch Jungle Cruise myself at home with my family at $29. And I think that HBO Max this year has all their movies day and day. I think it's going through an experimentation phase right now, personally. I think that 45 days is from a theatrical experience standpoint and windowing experience the norm today that you're going to see. But -- and by the way, I think that's a smart move. I think it's a smart move. I mean, I think we want to -- we're very pro theatrical. We want to make sure that the theatrical market is healthy. But I don't think that the days of experimentation are over. And I don't know if -- I think Disney said it. We're committing to this batch of movies at 45 days, I think is when they came out with it, Jessica. They said this batch. And then they had a couple that they weren't sure about. So I think they're going to -- it's not like every single movie is going to be handled the same way. I think if there's anything that the pandemic has shown us, each movie is its own business. And you need to think through that movie, what's the right thing to do for that movie. The theatrical experience is a smart place for many of these movies to live, and they'll probably end up being 45 days. But I think each movie will go through its own process.

Right. And with demand for content for film and TV being so strong, can you maybe home in a little bit on what kinds of content is most in-demand among broadcasters and streamers? And where would you get like the highest generations or return on investment?

Well, the franchises continue to drive a lot of our conversations. So our franchises are John Wick, Hunger Games, Twilight, Expendables, Divergent. Now You See Me. And we have about, I don't know, 10, 15 media movies. Those franchises continue to be a driver for a lot of our conversations. I think on the series side, we have recently taken out Mad Men and Weeds. Those are the 2 most recent big library shows that we took out. And both of those are very much key drivers for the company. I think what was interesting about both of those is we did not really know exactly how that -- we know Mad Men and Weeds have both been on Netflix for almost 10 years, maybe more than 10 years. So you have these iconic shows that have been on a platform that's grown tremendously. Who's going to be interested? We didn't know. We went to market. And I think one of the more interesting things right now is both shows ended up on multiple platforms. Why? Because they need to have that kind of iconic content, and that's the stuff that's in demand for them. They need to have -- not many shows make -- I think Weeds went 7 seasons. How many shows make it 7 season on Netflix right now? Not that many. So I think that's a real driver to where we'll see demand. I think I've also seen a lot of early days of international, especially with AVOD. AVOD is not as developed internationally as it is domestically. And I think that's going to be a huge upside for us. There's many entrenched broadcasters that still have vast market share when you look at their market share overall. And the AVOD, most of the main 6 or 7 here are not in those territories. So I think you're going to see a lot of that growth. And I think the demand will be the same thing, where internationally, they'll look at the franchises, but I think the series may be more of a driver for us internationally. That's what we've seen so far. They like having a series that people can get lost in. You can -- you get into season 1 and 2 and you got to watch 6 seasons. That's a really efficient body for them as a platform.

So before I get into AVOD, I just want to ask you one more thing about the different types of content. You bring up an interesting point, but this constant -- versus the Netflix and some of the newer ones. So right now, you have several new streaming platforms from the U.S. media companies. But as they scale up over time, how do you think the demand for content will change? Like do you think that types of content will change?

Well, I think -- yes. Well, I think the types of content that they acquire and the types of content that they produce will change for sure. There's no doubt in my mind. I remember one of our strategic partners way back when Netflix went into Latin America, they licensed a whole bunch of telenovelas. because that's a very popular form of programming down there, right? That was where they made a big impact to do telenovela deal. And then I remember a year later when they came back and said, we need to get out of this, this is not working well. It's not working. They didn't know. So they went to what they thought would work. And then when they got there, they realize, you know what? People want to watch telenovela on broadcast TV down in Mexico. They don't want to necessarily watch it on the streaming platform. So they pivoted and they changed. And I think every one of these platforms will pivot and change as they see actual data on what's working. I have a lot of stuff up through Amazon through a self-publishing platform. It's more for deeper content, but it's called Amazon PVD, where we published around the globe. And it's fascinating to me, Jessica, the things that end up working on Amazon that you wouldn't think would work. Like you see a show that all of a sudden pops in the U.K. or Italy or Spain, and you wouldn't have predicted it. And I think that's what every platform is going to go through. [indiscernible] you look at Paramount Plus. They're all going to have those stories of they put things in their ecosystem and then all of a sudden, something pops that they didn't expect and that could become an opportunity for a studio like mine.

Right. Before we get to AVOD, we have a question from an investor who wanted a clarification. It was like what I think were first comments about the Lionsgate library versus MGM and when you're talking about new titles. they just want a clarification of when you talk about refreshing your library over the last 10 years, do you count original content only? Or do you mean original and acquired content for refreshing?

I was speaking to just the original stuff that we either produce or distribute the original stuff, not acquired libraries. So we do -- that's a separate bucket. But the stuff that we put through active distribution, that's the way I would describe it. That's where I got into, 121 wide releases versus 44. And the total number of films 704 versus 159. That's active distribution content that goes through my pipeline film. On the library side, we bought, call it, close to 400 movies that have a collective box office of between, call it, around $3, $3.5 billion. But those are a separate bucket where we're buying the library and getting the value of those titles and their individual box offices that they had way back when.

Okay. So moving on to AVOD. The AVOD obviously growing -- dramatically growing in importance. But they don't need exclusive content. So can you just call out the benefit that you will get from -- like from -- because they're not buying exclusively, does that -- as AVOD grows, does that benefit -- you sold to all of the AVOD platforms at the same time, do you share revenue generally, get a flat fee?

These are great questions, Jessica. I had to bring you here and help me license. Those are great questions. So here's the deal. All of the above. All of the above. What we are refining -- I will change one thing you said. They do -- they're starting to care a little bit about exclusivity. So if they're going to license a title for me, and they're going to pay me market rates, they don't want it on every single other platform. So I am starting to see that change, which is a trend that is good for me, but it's also a change for the right. We're currently worldwide have about 10 main rev share partners that we do on rev share. And we do -- we have about 30 licensing partners globally. And the reason I like them as clients, obviously, on the licensing standpoint, they license shorter windows, 1, 2, 3-month windows. They pay market rate, which is great. The other thing is from a rev share perspective, I can put titles up very late in the sales cycle. So as an example, we could be out talking about a title. I mean, when we bought the Spyglass library, I'll give you a good example. We had Django as a title that was available. The minute we closed on the deal, we had Django available, and it was too late to license. But it was not too late to put it up on rev share. And we may even make more money on rev share than we would have made on licensing because a lot of these platforms would never get Django, as an example, is a Quentin Tarantino movie. They might not get that in normal course. So it became an opportunity to take advantage of the rev share part of that business. So I love it because it's very flexible. And some of what we do is kind of manage this like a hotel. Unused hotel rooms, you can't go back and get that revenue. So if you have a movie that you don't sell and nobody buys it for the month of July in 2021, that revenue goes away never to be recovered. So you have to be very opportunistic and smart about how we do this so that you don't have unused hotel rooms. Where we're getting more sophisticated that I'm the most excited about as far as AVOD is, I'm tracking CPMs now and understanding which platforms have better CPMs and I may not publish a movie or a TV show on every platform. I may go to the top 3 from a CPM standpoint. And I may ultimately say, I'm going to just do those 3 platforms. That's all I want to do, is those 3. And so that's where my sophistication -- or there may be situations where somebody wants to license something, but I don't like the pricing. And they'll say, you know what, I'm not going to take your deal. But we're going to publish this on a rev share basis because [indiscernible] and I'm going to double my money if I do rev share and I'll play for the upside. So I think that's what is really unique and quite beneficial to studios when you're in this space is that there's a lot of different structures I can take advantage of. And that's one of the things that makes that I think really, really good. Another trend I would say to you is fascinating to me is the TV manufacturers are really taking advantage of their first-party data. Samsung has done a very good job. VIZIO has done a very good job of becoming a legitimate client of mine. Why? Because when you buy a new Samsung TV and they have, I think, 32% market share, they -- you go there and you're getting pushed to their channel. You're getting pushed to that channel. They can then buy the right content around that. They can monetize it they're getting very good at their advertising ad sales machine. And that all of a sudden becomes a much higher CPM because they have a direct relationship with that customer. So I think that's another area long term, especially internationally, that's going to be fascinating for me is this kind of owned TV space UI.

Right. So just to continue exactly what you were just saying. So VIZIO secured with a $100 million in advertising commitments for 2022, which is up like fourfold from 2021. And it's just amazing the growth and we're seeing it kind of across the board and just like you said, the smart TVs. So where are we in AVOD, like the AVOD life cycle? Are we still at the very beginning? And how many major players do you think there will be long-term? How many outlets are willing to buy the same TV shows or films across the board?

I think we're still early days. I mean I do believe that. I think with Amazon's announcement that they're going to make TVs themselves, I think that's a testament to the fact that they're seeing what's happening on VIZIO and Samsung and all these manufacturers, like they want to get into that space. So I think if anything, Roku has done a very good job of becoming the operating system, right? And the real key operating system. And I think that's one of the reasons the Roku Channel and the Roku Company has done amazing kind of strategic growth over the last few years is because they're the operating system of a lot of these TVs. And they put the Roku Channel front and center. So I think we're still very early. I think the part that's going to be the question mark that I don't know is a year or 2 ago, people would have said, I only think it's going to be 2 or 3 SVODs that people are going to be willing to own. Some of the stuff I'm reading now, I think it's now -- everybody has realized it could be 3, 4, 5 SVODs. And then it gets supplemented by AVOD. So I think, if anything, I think we'll have to see how many -- like how much utilization the SVOD platforms get as far as people paying money to anchor in their entertainment needs and then what's the AVOD supplementing that? What is that next AVOD supplementing? Is it to do 3 or 4 or 5 watch -- when is too many? When is it too many? And the answer is, I don't think it is too many yet, but it's -- there's a lot of choices right now. So I think we'll have to see.

Sorry if I went on rebuttal before. But anyway, are there any more -- are there more opportunities to acquire libraries? And if so, what types of deals are you looking for?

Well, I mean, we've been able to piece together -- I think everybody knows that we bought Spyglass and we announced that. That was almost 200 titles with, I think, over $2 billion in box office. We also supplemented it with another library that was the early Weinstein Company library from like about 2005 to 2010. So we now, as a company, own all of the library that Harvey and Bob and the Weinstein Company produced over those years. And that is a big addition close to, call it, 400 titles and a lot of box office. And I think that you have to be a company like ours that's in the business of maximization to want that necessarily because we can really take these things out. I mean I use a great example of one of the library titles we bought in one of these libraries is called the Great Debaters. Denzel Washington, it was an older show -- an older film. A really well-done -- well-crafted film. It was earning about $30,000 a month. And now it's generating close to $160,000 a month. And why is that? It's the same movie, same situation. Why is that? And I think the why is why we want to buy libraries. Because if you're really good at that distribution mechanism and you know how to window and you know how to take advantage of the AVOD and you know how to take advantage of SVOD, we window something for Starz or whatever licensing activity, you can take an asset and truly show its long-term revenue potential with the right maximization. We also picked up a deal where we control -- we didn't buy the library we distribute the Annapurna library. And that's about $150 million of newer movies, things like Vice and Booksmart and Detroit, and those are all movies that we control. So sometimes, we will acquire them. Sometimes, we will just do a distribution deal. But what it does for us is it gives me, as a studio market heft. It allows me to get out in the marketplace, no different than I'm sure in your business when somebody is controlling a mutual fund or controlling certain IPOs, same exact situation for me. And then I can create new franchises. I mentioned those franchises before, but a good example of kind of this franchise is now I'm creating the Quentin Tarantino collection because I got a bunch of -- I got 3 Django, Inglourious Basterds. And I've got Death Proof. All these Quentin -- I think I have 7, 8 and almost 10 Quentin Tarantino movies. Reservoir Dogs. That was one of the movies that the company bought years ago when we got into business buying libraries. So now I have Reservoir Dogs, one of Quentin Tarantino's iconic films, and I put them all together. And now my company has a new franchise, the Quentin Tarantino franchise, and we can go out and maximize that. And I think that that's really where you have to be scrappy as a company to go out and do that. And sometimes there are bigger libraries. There's not as many big ones. Miramax sold, as you know, to Paramount. So some of the bigger ones are gone. But we still will find libraries that are really kind of interesting. We bought one, I don't know, 3 or 4 years ago called the IDG, which was a small international library, but I now own Gangs of New York in a few territories. I own Traffic. I own Aviator with Leonardo DiCaprio in a few territories. So it just adds to the portfolio effect. And I would say that we're going to continue to do that so long as we can monetize it and take advantage of.

But how competitive is it when you're buying libraries? You saw a bound of money that calls [ Suchiradnow ]. And now supposedly Will Smith, Will and Jada Pinkett-Smith's company is for sale. And any of these new buyers coming in, not just the traditional buyers as well.

I think it's good. I can't imagine that's not a benefit for us as Lionsgate. I think that I view -- with Hello Sunshine, we have that with Kevin Beggs and his amazing television production operation, right? Starz is producing shows. Kevin -- that production piece is going on. We have a production engine, and we also own libraries that really become a cash generation engine. So I do view them a little bit differently. Hello Sunshine, I think was bought on the promise of what's to come. It's not like they have a huge deep catalog.

No, they don't.

Yes. No. So they're really buying the promise of what that will become. I think in our particular situation, we're today executing on the promise with the 20, 30 shows that Kevin Beggs is producing. And the movies that Joe Drake and his team and Nathan and Aaron are producing, I mean, we've got probably one of the best film slates coming from this company that I -- since I've been here, that's coming right now. John Wick is shooting. We have Hunger Games prequel coming up. Sequel of Wonder. We have some amazing movies that are coming through these pipelines. So I think we have both things. The actual engine producing, not promise of that and the library to monetize as we go along.

I can't believe we're out of time. I have like 50 more questions, but thank you much for your time today.

Thank you. Really nice to see you. And thank you so much for having me. Really appreciate it.

Thank you.

Thank care.