Lionsgate

’s (

LGF.A

) South Asia managing director, Rohit Jain, recently said that the company’s subscription video on demand (SVOD) platform, Lionsgate Play, is expected to reach 75–80 million paying subscribers in the coming years from the current 50–60 million.

Currently, the SVOD platform’s average revenue per user (ARPU) is slightly above 50 cents, while the average viewing time per user ranges around 85 to 90 minutes.

In order to grow its user base and achieve estimates, Rohit Jain says that Lionsgate Play has started offering dubbing in six different regional languages, which will help its content reach the masses in smaller towns.

It is also focusing on improving content for subscribers in India and adding more originals to its library. Its original content, such as

Minus One

and

Feels Like Home

, released in 2022, have gained traction specifically from the youth. This has now made the company schedule 10 new India originals in 2023.

Lionsgate Play Sees Big Opportunities & Competition in India

The OTT market in India is huge and Lionsgate Play has a good opportunity to capture it in the coming years.

Per

Mint

, the OTT market in India is estimated to grow from $2.6 billion in 2022 to around $11 billion by 2030. From this, the SVOD platforms will make up 55-60% of overall OTT revenues in India by 2030, overtaking AVOD platforms that will see their share touch 40-45%.

This gives Lionsgate Play an edge over OTT platforms like

Netflix


NFLX

and

Walt Disney


DIS

, which have recently shifted their focus toward the AVOD model in times when the advertising market is declining.

However, Disney’s Hotstar and Netflix are extremely popular streaming apps in India. Hotstar gained large viewership from

Indian Premiere League

(IPL), one of the biggest sporting premium leagues in the world, until recently when it lost the rights to Reliance Jio.

Netflix has been dedicated to launching India Originals. Series like

Mismatched, Masaba Masaba

and

Indian Matchmaking

have received immense appreciation, leading to the release of their respective second seasons this year.

Nevertheless, considering that India is a developing nation with the average income being $278 per citizen, Lionsgate Play enjoys an edge with its minimal subscription cost against Netflix and Disney. A Lionsgate Play subscription is priced at $1.20 per month, while Netflix and Disney are priced at $1.80 and $3.61, respectively.

However,

Amazon

’s

AMZN

Prime Video launched its free service miniTV this year within the Android app that provides short content to viewers in India. This has competitive potential against Lionsgate Play.

Lionsgate, which currently has Zacks Rank #4 (Sell), has plunged 65.7% year to date compared with the Zacks

Consumer Discretionary

space’s decline of 37.7%.

Lionsgate Has More to Gain From India

Besides its OTT platforms, Lionsgate has also scheduled big theatrical releases in India for 2023. Its movie launches include J

ohn Wick: Chapter 4, Golda, Plane, Bricklayer, About My Father, White Bird: A Wonder Story

, and

The Hunger Games: The Ballad of Songbirds & Snakes.

After a dip in the footfall at theaters due to the pandemic, theatrical sales are reviving again as people have started moving outdoor for entertainment. Devang Sampat, the CEO of an India-based theater chain, Cinepolis, said that though footfall in 2022 has been 20% lower than the pre-pandemic levels, he sees a full recovery in the coming two years.

This suggests that Lionsgate has the potential to gain good viewership and hence boost its top line.

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the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

.

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