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One year after it's spin off. Stars is under pressure to prove that it can deliver profits, and strong content is helping it. It's sustaining momentum as consolidation reshapes the industry. Joining us now, please to stay. Star CEO Jeffrey Hirsch, Jeff, thank you so much for joining. And I think this in particular is kind of an interesting part about Stars. It's a world where Warner Brothers paramount, all the behemoths are coming together, and yet you fought the trend with
now where you're spinning out of Lions Gates. So why exist in this rarefied air of being a smaller company when everybody else is coming together?
So thanks for having me on this morning. It's been a year. It's been a great year.
We're a lot stronger as a company today than we were a year ago when we were part of Lionskate.
We've done a lot of work to.
Unwind a lot of the ownership of a studio structure, becoming really a strong network, and you've seen that in the numbers. Like we are a focused streamer, we focus on women and underrepresented audiences, and as we're complementary to all the broad based streamers. And what that means is we can focus on our audience, is we can do it in more in depth than anybody else and on
scale than anywhere else. So as much as those other broad based streamers are bigger in size, financially, if you look at our audiences, we're probably the number one or two brand in the homes of each of our audiences because we are that destination for that content.
Will they pay more? Will those will your customers pay more for it because it's geared specifically at them.
Look, I think we've always wanted to be priced as a complementary service. So I think what you've seen over the last two or three years, as as streamers have moved away from chasing Netflix subsubscriber to drive profitability and raise rates, it's given us room to continue to raise our rate. So as long as we are there's a good gap between a broad based streamer and not so we can continue to have some pricing power.
By the way, do you think it's an unhealthy thing for the overall ecosystem for there to be so much consolidation? Does it make differences? And sort of like the creative output I know a lot of actors are very unhappy that this sort of thing is going. What does it do to the overall media environment to have people fighting exactly the thing you're doing.
I think the stronger the broad based players are. And if you look at the natural evolution of the space, you had cable companies at satellite companies, and now you have content companies becoming distribution platforms. And so the more the Warner brothers in Paramount are stronger to compete with the Amazons, to compete with the netflixes, with the Hulus and the Disneys, it gives us a great platform to
be sold on top of. So today we're sold with the second largest channel on Amazon, We're sold on top of Hulu, and so as those guys settle what they're doing, it gives us another opportunity to be sold on top of another broad based streamer that's the number one or number two streamer in the home. And so that gives us a lot of opportunity to continue to grow what we do, which is very focused on those demos.
You lean into the strategy to the IP strategy basically of something like Atlander or Power.
Does that differentiate you?
You think enough from the other streamers that people pay attention specifically to your channel because they want those you know, or BMF or or whatever it may be.
Yeah, I think the more that we're focused, the more we continue to put network shows on the air. So we just coming out of the last season of Outlander. The fan base is obsessed with that show and they're very sad that it's ending, but I think it's going to be a great ending next week for the base. MMA dais premiered last weekend, you know, and we've been trying to turn our slate over and get ownership back
on the network. So fight Land with Curtis fifty cent Jackson is our first Stars owned original from separation that will premiere July thirty first.
So our view, as long as we continue every.
Week to have something on the air that really serves those two demos, we become the destination for those demos and makes us very important for the broad based ecosystem to be added.
On top of much like we were in the old cable days.
Well, what is the process like? Again, you have shows that have a lot of fans, and I know fight Land you're hoping is going to be one of these other really strong ips. What is the process, like, I mean, you have again fifty cents signed on to it. I'm sure it's not cheap to create one of these programs.
What is sort of the math and thought that goes into it to say, Okay, we're going to bet behind this horse and we're going to build it up to be an IP that again, you know, reaches the status to some of your others.
I think we're uniquely positioned because we focus on those two demos. We know what those demos like, so we know what the Outlander fan base loves. We've been doing it for fourteen years. So we have shows like Amma Dais that feeds that fan base. We had a series of Queens, White Queens Spanish Princess that really feeds the historical time travel piece of that. Fight Land has a lot of the same feel as the original Power. It's boxing in the UK, but it's in the world of crime and family drama.
We have a show that we just.
Announced which doesn't have a title yet, called the untitled Black Rodeo Show. It's based a family drama based on a Black rodeo in Texas that feels a lot like BMF and so as we look at our development strategy, we're not trying to make swings at things that the customers have never seen before. Every show that we have is kind of mapped to a different show. That gives us great confidence that these will be hits for us.
Are we done making shows about like New York and LA? It feels like every new big program that's coming out is about like Middle America somewhere else.
We are not done with shows about New York LA. We'll announce a show within the Power Universe pretty soon that brings folks back into New York City and it's a little more modern times than before. And I look, New York and LA are obviously a great place to shoot programming. New Jersey is a great place with tax credits today. But I think you have to serve the entire country, not just that the coasts.
It.
I mean that makes business sense.
The new properties that you're developing, what about keeping the old ones alive? As a businessman who's trying to apply like the science, you know, to the creativity, how do you avoid like jumping the shark and make sure that you can have five seasons, ten seasons, twenty seasons, so you.
Know, It's interesting again because the components are pretty similar, and then you can bring the talent from one show to the next and so that it's a recognizable name and a new to bring audience across. When we premiered BMF Season one coming out of Ghost, which was one of the big power spinoffs, eighty percent of the audience
went from Ghost into BMF. It was half the cost, and so we make that trade all day from a financial point of view, and so having ownership, getting control of the inception point of a show and then be able to monetize it globally allows us to take cost
off the business. And what you saw on our last quarter report Thursdays, we moved our twenty percent guide from coming out of Calendar twenty justin riebit a guide or margin guide coming out of calendar twenty eight to the back half of twenty seven, and so we feel like we're actually, you know, putting great content on the air that the audience loves, but we're also able to actually drive margin at the same time.
I mean, we're talking about this a bit in the break, but I was having conversation with a director from a Netflix film film that was basically like it was an action one said we had to have an explosion in the first five minutes or we knew we'd lose our audience. Just how much has a creative process changed because of the competition for what is increasingly shorter attention span.
Yeah, I think you have.
To really in the first one, two, three episodes have to get the audience, keep the audience, and you know, really kind of drive with an intense, perpossive move to get the audience excited about the show. And if you wait to the back half, you may not have them there to get there. So we're in a much you know, shorter attention span period. There's a lot of different vehicles that pull people's attention. It's not used to just be books,
newspaper and cable. Now it's everything, and so your shows really have to pop. And I think the one thing that we do better than most is just that. I mean, if you look at the Power franchise and all the spin offs, every one of those episodes is packed with action. You'll continue to see that with Stars.
It's such a fascinating industry that you're in, Jeff, So we'd love to have you back when you can. Jeff Hirsch there he is the President and CEO of Stars