Key Points
- Starz says it will stop disclosing firm subscriber counts after its most-recent financial earnings report.
- The company is pointing investors toward other metrics, including streaming-related revenue and operating profit.
- The move comes as much-larger streaming peers like Netflix, Roku and Disney also stopped disclosing subscriber counts in recent months.
Starz will no longer disclose the number of subscribers who pay for the multiplex movie network through traditional pay TV providers and via streaming, the company quietly announced last week.
During a conference call with investors, Starz CEO Jeffrey Hirsch said the company intends to focus on other metrics like streaming-related revenue and profitability as a better barometer of that business unit’s performance moving forward.
“We believe this decision is in the best interest of our shareholders, as it puts us on a path to achieving the targets we outlined,” Hirsch said.
In that sense, Starz follows in the footsteps of Netflix, Roku and the Walt Disney Company in ending the practice of disclosing subscriber growth or churn out of a desire to point Wall Street toward more-favorable financial metrics.
Starz is the smallest streaming service to break away from firm subscriber counts as a gauge of how well its service is doing. Typically, streaming services have moved away from that data when the services go through a prolonged period of sluggish or stalled growth.
On the streaming side, Starz’s business grew during its most-recent financial quarter, adding nearly 1 million customers to end last year with 12.7 million streaming subscribers. Its linear TV multiplex saw a slight dip in customer count, ending the same period with slightly under 5 million customers, according to an analysis of Starz’s financial disclosure reports by The Desk.
All told, Starz’s subscription growth was stronger — and its linear TV churn smaller — than some of its larger peers during the same period, proof that the company’s strategy of trying to entice adult subscribers with more-mature programming is resonating. Its financial losses also narrowed during fourth quarter (Q4) as Starz begins to rebound from last summer’s expensive split from former parent company Lionsgate.
In a general sense, Wall Street treats any major shift on data points with a heavy dose of skepticism.
“The less data you have, the less somebody can defend you,” Laura Martin, the Internet and Media Analyst at Needham & Company, said during the Parks Associates Future of Video conference last year when asked by this reporter for her reaction to streaming services pulling subscriber-related data.
Martin continued: “When you tell me X, but you don’t do X, I take down your shares because there’s something going on that you don’t like me to know about or that makes me skeptical.”
In the case of Starz, Wall Street overlooked the company’s decision to stop reporting subscriber counts after this quarter, boosting its stock price by $2 in the days since its Q4 earnings report after the media firm revealed it was burning through less cash to attract and retain subscribers with premium content.
