Starz CEO Jeffrey Hirschm Talks Remaining a Small Focused Streamer | Bloomberg Talks

0:02 Bloomberg Audio Studios podcasts radio news.

0:07 One year after its spin-off, Stars is under pressure to prove that it

0:10 can deliver profits and strong content is helping it.

0:14 It's sustaining momentum as consolidation reshapes the industry.

0:17 Joining us now, please stay is Star CEO Jeffrey Hirs.

0:21 Jeff, thank you so much for joining.

0:22 And I think this in particular is kind of an interesting part about Stars.

0:25 It's a world where, you know, Warner Brothers, Paramount,

0:28 all the behemoths are coming together and yet you fought

0:31 the trend with now a year spinning out of Lion's Gate.

0:34 So, why exist in this rarified era of being

0:38 a smaller company when everybody else is coming together?

0:41 So, thanks for having me on this morning.

0:42 It's been a year.

0:43 It's been a great year.

0:44 We're a lot stronger as a company today than we

0:46 were a year ago when we were part of Lionsgate.

0:48 We've done a lot of work to unwind a lot

0:50 of the ownership of a studio structure and becoming really a strong network.

0:54 And you've seen that in the numbers.

0:55 Look, we are a focused streamer.

0:57 We focus on women and underrepresented audiences.

0:59 And we're that means we're complimentary to all the broad-based streamers.

1:02 And what that means is we can focus on our audiences.

1:04 We can do it in more in depth than anybody else and on scale than anywhere else.

1:08 So as much as those other broadbased streamers are

1:11 bigger in size financially if you look at our audiences,

1:14 we're probably the one or two number one or two brand in the homes

1:16 of each of our audiences because we are that destination for that content.

1:20 Will they pay more?

1:20 Will those will your customers pay more

1:22 for it because it's geared specifically at them?

1:26 Uh, look, I think we've always wanted to be priced as a complimentary service.

1:29 So, I think what you've seen over the last 2 or 3 years

1:32 as as streamers have moved away from chasing

1:34 Netflix subscriber to drive profitability and raise rates,

1:38 it's given us room to continue to raise our rates.

1:40 So, as long as we are there's a good gap between a broadbased streamer and us,

1:43 we can continue to have some pricing power.

1:45 By the way, do you think it's an unhealthy thing

1:47 for the overall ecosystem for there to be so much consolidation?

1:50 Does it make differences in sort of like the creative output?

1:53 I know a lot of actors are very unhappy that this sort of thing is going.

1:55 What does it do to the overall media environment

1:58 to have people fighting exactly the thing you're doing?

2:01 I I think the stronger the broad-based players are and if

2:04 you look at the natural evolution of the space,

2:06 you had cable companies and satellite companies

2:08 and now you have content companies becoming distribution platforms.

2:12 And so the more the Warner Brothers

2:13 and Paramount are stronger to compete with the Amazons,

2:16 to compete with the Netflix's, uh, with the Hulu's and the Disney's, uh,

2:20 it gives us a great platform to be sold on top of.

2:23 So today we're sold the second largest channel on Amazon.

2:26 Uh, we're sold on top of Hulu.

2:28 And so as those guys settle what they're doing,

2:30 it gives us another opportunity to be sold on top of another

2:33 broad-based streamer that's the number one or number two streamer in the home.

2:37 And so that gives us a lot of opportunity to continue to grow what we do,

2:40 which is very focused on those demos.

2:42 You lean into the strate to the to the IP

2:45 strategy basically of something like Outlander or Power.

2:48 Um, does that differentiate you, you think,

2:52 enough from the other streamers that people pay attention

2:54 specifically to your channel because they want those, you know,

2:57 or BMF or or whatever it may be?

2:59 Yeah, I look, I think the more that we're focused,

3:01 the more we continue to put network shows on the air.

3:03 So, we have just coming out of the last season of Outlander.

3:06 Uh, the fan base is obsessed with that show

3:08 and they're very sad that it's ending, but I think it's going to be a great

3:10 ending next week for the base amoddas premiered last weekend.

3:14 You know, and we've been trying to turn

3:15 our slate over and get ownership back on the network.

3:17 So, Fightland with Curtis 50 Cent Jackson is our first

3:20 stars owned original from Separation that will premiere July 31st.

3:24 So, our view as long as we continue every week

3:26 to have something on the air that really serves those two demos,

3:29 we become the destination for those demos.

3:31 that makes us very important for the broad-based ecosystem to be added

3:34 on top of much like we were in the old cable days.

3:37 What is the process like?

3:38 Again, you have shows that have a lot of fans and I know

3:41 Fightland you're hoping is going to be one of these other really strong IPs.

3:44 What is the process like?

3:45 I mean, you have again 50 Cent signed on to it.

3:48 I'm sure it's not cheap to create one of these programs.

3:50 What is sort of the math and thought that goes into it to say, "Okay,

3:53 we're going to bet behind this horse and we're going

3:55 to build it up to be an IP that again,

3:57 you know, reaches the status of some of your others." I

4:00 think we're uniquely positioned because we focus on those two demos.

4:04 We know what those demos like.

4:05 So, we know what the Outlander fan base loves.

4:07 They It's We've been doing it for 14 years.

4:09 So, we have shows like Amdus that feeds that fan base.

4:12 We had a series of white of Queens, White Queen,

4:15 Spanish Princess that really feeds the historical time travel piece of that.

4:19 Fight Land has a lot of the same feel as the original Power.

4:22 It's it's boxing in the UK, but it's in the world of crime and family drama.

4:27 We have a show that we just announced which doesn't

4:28 have a title yet called the Untitled Black Rodeo Show.

4:31 It's based on family drama based on a black

4:33 rodeo in Texas that feels a lot like BMF.

4:36 And so as we look at our development strategy,

4:39 we're not trying to make swings at things

4:40 that the customers have never seen before.

4:43 Every show that we have is kind of mapped to a different

4:45 show that gives us great confidence that these will be hits for us.

4:48 By the way, are we done making shows about like New York and LA?

4:50 It feels like every new big program that's

4:52 coming out is about like middle America somewhere else.

4:55 Uh we are not done with with shows about New York or LA.

4:58 We'll announce a show within uh uh Power Universe pretty soon that brings folks

5:03 back into New York City and it's a little more modern times than before.

5:06 And I look New York and LA are obviously a great place to shoot programming.

5:10 New Jersey is a great place with tax credits today.

5:12 Um but I think you have to serve the entire country, not just the coasts.

5:17 It I mean that makes business sense, the new properties that you're developing.

5:21 What about keeping the old ones alive?

5:23 as a businessman who's trying to apply like the science,

5:26 you know, to the creativity, how do you avoid like jumping the shark

5:30 and make sure that you can have five seasons, 10 seasons, 20 seasons?

5:34 So, you know, it's interesting again because the components

5:37 are pretty similar and then you can bring the talent

5:39 from one show to the next and so that it's

5:41 a recognizable name and a new to bring audience across.

5:43 When we premiered BMF season 1 coming out of Ghost,

5:46 which was one of the big power spin-offs,

5:48 80% of the audience went from Ghost into BMF, it was half the cost.

5:53 And so we make that trade all day from a financial point of view.

5:56 And so having ownership,

5:57 getting control of the inception point of a show and then be

6:00 able to monetize it globally allows us to take cost off the business.

6:04 And what you saw in our last quarter report

6:06 Thursday is we moved our 20% guide from coming out

6:09 of calendar 20 uh adjusted IBA guide or margin guide

6:12 coming out of calendar 28 to the back half of 27.

6:15 And so we feel like we're actually, you know,

6:17 putting great content on the air that the audience loves,

6:19 but we're also able to actually drive margin at the same time.

6:22 We were talking about this a bit in the break.

6:24 Um but I was having conversation with the director

6:26 from a Netflix film that was basically like it was an action

6:28 one and said we had to have an explosion

6:30 in the first 5 minutes or we knew we'd lose our audience.

6:32 just how much has a creative process changed because

6:36 of the uh competition for what is increasingly shorter attention spans?

6:40 Yeah, I think you have to really in the first one two three episodes have

6:43 to get the audience keep the audience and and you know really kind of drive

6:47 with an intense propens propulsive move uh

6:50 to get the audience excited about the show

6:52 and if you wait till the back half you may not have them there to get there.

6:55 So uh we're in a much you know shorter attention span period.

6:58 There's a lot of different vehicles that pull people's attention.

7:01 It's not used to just be books, newspaper, and cable.

7:03 Now it's everything.

7:04 And so, uh, your shows really have to pop.

7:07 And I think the one thing that we do better than most is just that.

7:09 I mean, if you look at the Power franchise and all the spin-offs,

7:12 every one of those episodes is packed with action.

7:15 Uh, you'll continue to see that with Stars.

7:17 It's such a fascinating um, industry that you're in, Jeff.

7:20 So, we'd love to have you back uh, when you can.

7:23 Jeff Hirs there.

7:24 He is the president and CEO of Stars.