A MESSAGE FROM OUR SPONSOR

Emmy® Nominee · Outstanding Comedy Series

Outstanding Lead Actress In A Comedy Series · Kristen Bell

Outstanding Lead Actor In A Comedy Series · Adam Brody

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“Bell & Brody Are A Marvelous Pair.”

– New York Times

[WATCH] The Secret to Their Spark: Kristen Bell & Adam Brody

Dive into the undeniable chemistry of Emmy® Nominees Lead Actress Kristen Bell and Lead Actor Adam Brody as they reveal what made their on-screen pairing in NOBODY WANTS THIS so captivating.

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For more on NOBODY WANTS THIS, visit series.netflixawards.com

Now for the main attraction…

So… how long can Starz last? Back in 2021, a few years after its launch as a stand-alone streaming service, C.E.O. Jeffrey Hirsch and Lionsgate leader Jon Feltheimer predicted that Starz was on track to reach 60 million global subscribers by 2025, with more than 80 percent coming from its digital business. That turned out to be a pandemic-era fever dream. Last week, during the company’s first earnings call since being spun out of Lionsgate in May, C.F.O. Scott MacDonald announced that total subs (linear and streaming) had fallen to about 19 million—less than one-third of what Hirsch once predicted—with streaming subscribers sitting around 12.2 million, down 120,000 from last quarter. Starz barely operates outside the U.S. anymore, after past attempts at global expansion didn’t pan out.

Executives and analysts have described the decision to separate Starz and Lionsgate as a hybrid offense-defense play, giving both entities the flexibility to pursue partnerships and M&A on their own. But it certainly looks as if Starz is more likely to be a seller than a buyer. On Thursday, Starz reported revenue of just $319.7 million in the second quarter, down nearly 7.5 percent year over year, though the company is still profitable. While leadership was optimistic about recent signups tied to Outlander prequel Blood of My Blood, subscriber retention continues to be an issue. On average, Starz is churning about 8.7 percent of its audience every month, according to Antenna research, or more than four times the rate at Netflix. (A rep told me that churn for the service has dropped for the third consecutive quarter and improved by 40 percent over the past two years, but didn’t provide any data.)

Still, the niche Starz portfolio—which skews toward women and Black and Hispanic viewers—could make it a compelling acquisition target for larger streamers. Black audiences were 33 percent more likely to have Starz than other audiences, according to a PQ Media report last year. Starz is one of three premium streaming services that overindex for Spanish speakers—who represent about 14 percent of the U.S. population—along with Disney+ and HBO Max, per Samba TV. And demand for Starz originals—measured as a combination of audience interest and viewership—also beats out comparable programming on BET+, according to Parrot Analytics, although Starz is starting to see a dropoff.

Hirsch clearly believes that the Starz audience and portfolio is worth more than its $220 million market cap. A few months ago, he predicted during an appearance on Yahoo Finance that the streaming industry was about to enter a period of programming reshuffling, spinoffs, and consolidation. We’re halfway there, of course, with NBC Universal separating out its cable businesses as Versant, Warner Bros. Discovery preparing to do the same, and Disney at least contemplating an independent ESPN. Once the shedding stops, Hirsch said, M&A activity would ramp up. The question is, who would want Starz?

Alas, Starz isn’t the only streamer these days focusing on specialized audiences. As of December, Black people accounted for close to 45 percent of all viewing on Tubi—the free, ad-supported service owned by Fox—per Nielsen, as reported by Business Insider. That same month, Tubi maintained a 1.7 percent share of all TV viewership in the U.S. (it now sits at 2.2 percent), while Starz has never crossed the 1 percent threshold required to appear on Nielsen’s Gauge report. And with more than 100 million active monthly users, Tubi’s audience is five times the size of Starz’s.

A MESSAGE FROM OUR SPONSOR

Emmy® Nominee · Outstanding Comedy Series

Outstanding Lead Actress In A Comedy Series · Kristen Bell

Outstanding Lead Actor In A Comedy Series · Adam Brody

_____

“Bell & Brody Are A Marvelous Pair.”

– New York Times

[WATCH] The Secret to Their Spark: Kristen Bell & Adam Brody

Dive into the undeniable chemistry of Emmy® Nominees Lead Actress Kristen Bell and Lead Actor Adam Brody as they reveal what made their on-screen pairing in NOBODY WANTS THIS so captivating.

_____

For more on NOBODY WANTS THIS, visit series.netflixawards.com

Of course, Hirsch & Co. will argue that their most popular shows, like 50 Cent’s Power franchise and Ronald D. Moore’s Outlander, represent the type of prestige television that audiences can’t get on Tubi. And now that Starz owns its own series, the revenue it can make licensing those titles internationally without having to worry about Lionsgate will theoretically be higher. But all that really matters is scale and engagement. Put another way: Starz may have large Black and female audiences, but services like Netflix, Hulu, and Prime Video have way more Black Americans and way more women watching overall. And despite Starz having more shows targeted at these audiences, subscribers are canceling, engagement is low, and the gap with the biggest streamers continues to grow.

But while Starz might be too subscale to punch up, its content and audience might be valuable to other streamers. In the first half of 2025, Peacock and Hulu originals had the lowest number of onscreen Black and Hispanic talent among major general entertainment streamers, according to Samba TV. Roughly 13 percent of onscreen talent in Peacock originals was Black, and just 2 percent was Hispanic. Likewise, 12 percent of onscreen talent in Hulu originals was Black, and 3 percent was Hispanic. Although Samba’s study didn’t include Starz, research conducted by UCLA found that people of color comprise more than 60 percent of Starz’s onscreen talent, and more than half of showrunners come from underrepresented groups. Importantly, Samba TV also found that Black households are 74 percent more likely to watch a show with Black leads. In general, 59 percent of all nonwhite households are more likely to watch a show if there are nonwhite actors onscreen.

Could Starz find an interested buyer? Netflix is famously not in the acquisitions business, and there’s no real incentive for Disney or Comcast to purchase Starz right now. Sure, Comcast has a fresh $9 billion from Disney thanks to the sale of its Hulu stake, but C.E.O. Brian Roberts may be more interested in talking to David Zaslav at Warner Discovery. Neither Amazon nor Apple needs to own Starz because it’s already available as an added subscription through their apps, where they take a cut of every transaction. The most interesting potential buyer is Paramount Global, which is focusing on sports, movies, and streaming, with BET a key part of the new company’s future. David Ellison might have his eyes on Warner Bros., as my colleague Kim Masters has reported, but considering he’s in his big boy billionaire bucks era, kicking the tires on Starz isn’t out of the question either way.

In the meantime, Starz will likely continue to double down on bundling with other services, as it has been doing with rival niche streamers during high-traffic periods. Hallmark and Starz have a “Christmas in July” bundle, and Starz works with BET+ during Black History Month. These kinds of deals can also introduce different audiences to Starz’s programming when viewership is low. To wit: Hirsch argued that Starz partnered with HBO Max earlier this year to air The White Lotus at a time when it didn’t have any other high-profile shows, while HBO Max aired Starz’s Power Book III: Raising Kanan.

Hirsch understands that bundling is critical to everyone’s business: the big guys who need more premium content but don’t want to make it themselves, and the small players who need more scale. Earlier this year, Hirsch forecasted that the industry will move from “onesie, twosie bundles” into “multi-company bundles” that include “two, three, or four products together, … with us at the center of that.” Hirsch has also articulated a desire to become a distributor for linear channels that don’t yet have a streaming partner, although it’s hard to imagine why they wouldn’t choose a platform with more scale, like Roku.

If you ask Hirsch, he might wax poetic about the intentionality of a Starz streaming customer, who is on the platform for specific series, versus a Roku customer stumbling on niche content amid a sea of other offerings. But there’s no getting around the fact that Starz is small. That’s not the end of the world for higher-margin streamers, like Crunchyroll, but Starz could struggle to raise prices since customers have more cost-effective options. Perhaps the most likely outcome is that a scale player simply licenses Starz’s best content, like Netflix already does with Outlander, and absorbs its audience through a long war of attrition. That means Starz’s days as a stand-alone service may be numbered, something Hirsch has to know in the back of his mind.

Thanks, Julia. I'll be back tomorrow.

Matt

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