How Sony and Lionsgate Became Hollywood’s ‘Arms Dealers’

Key information:

While most studios have jumped into competition with Netflix over the past few years, two studios — Sony and Lionsgate — have stayed out of the dispute, thus becoming Hollywood’s “arms dealers.”

Why it’s important: Keeping Wall Street happy before the streaming bubble burst meant trying to compete with Netflix, pouring massive resources into their own platforms and losing billions in the process. While studios like Paramount and Warner Bros. Discovery have struggled with this strategy, Sony and Lionsgate’s strategy of remaining the traditional film and TV studios they were before the streaming boom has largely served them well.

Sony Steady Stream: There’s nothing flashy about Sony’s second-quarter earnings — in fact, their numbers were down slightly year over year, yet they still netted a profit of $73 million. But there were some solid numbers hidden in the lack of flashiness: $852 million in movie revenue, and $1.3 billion in combined TV and network revenue. Those TV revenues were down 20% year over year because of the continued surge in post-strike series, but overall, it’s still a portrait of a healthy business.

Lionsgate’s Starz Shed: Lionsgate, on the other hand, was not profitable, losing $60 million in Q2 on revenue of $835 million. This is mainly due to its success a year ago (John Wick 4) and having no comparable one in 2024. But going forward, the company’s earnings — made up of its film and TV studios and its stake in the premium network Starz — will be adjusted as it divests that stake. By the end of the year, Lionsgate will simply be a film studio and a TV production arm without the pay-TV burden.

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This story was published in cooperation with Anklea paid subscription-based entertainment industry magazine.