Starz Reports Growing Losses Despite Stable Subscriber Numbers
Starz just dropped its third-quarter financial report, and the numbers tell an interesting story. After officially splitting from Lionsgate, the standalone streaming company saw its losses widen to $53 million while managing to keep its subscriber base steady at around 19 million. It’s a mixed bag of results that raises questions about the company’s path forward as an independent entity.
The revenue picture isn’t looking great either. Starz pulled in $321 million during the quarter, which marks a noticeable drop from the $347 million they recorded in the same period last year. That’s a decline you can’t ignore, especially when you’re trying to prove yourself as a newly independent company.
Breaking Down the Financial Performance
Let’s talk about those losses for a moment. Starz recorded an operating loss of $34.8 million this quarter. Compare that to the $17 million operating loss from a year ago, and you’ll see the problem has essentially doubled. The net loss situation is equally concerning, jumping from $30.6 million last year to $52.6 million now.
Where’s the money coming from? The company splits its revenue between streaming and linear TV. Streaming brought in $222.8 million, down from $232.2 million the previous year. Meanwhile, linear and other revenue dropped even more significantly, falling to $98.1 million from $114.7 million. Traditional TV continues to bleed revenue, which isn’t surprising given industry trends.
Understanding the Subscriber Dynamics
Here’s where things get a bit more hopeful. Starz actually added 110,000 over-the-top (OTT) subscribers during the third quarter. That might not sound like a massive number, but it’s definitely better than the 120,000 customers they lost in the second quarter of 2025. Growth is growth, right?
The total subscriber count reached 19.2 million by the end of the quarter. That’s up slightly from 19.08 million in the previous quarter, thanks entirely to those OTT gains. However, U.S. subscribers specifically dropped by 130,000 to 17.46 million. The company’s streaming service now has 12.29 million customers total.
What Leadership Is Saying About Starz Losses
Despite the widening losses, CEO Jeffrey Hirsch is striking an optimistic tone. He called it “a great quarter both operationally and financially” and promised momentum heading into the end of 2025. That’s quite a positive spin on numbers that might make investors nervous.
Hirsch pointed out that Starz has only been a standalone public company for six months. He’s betting on a strategy that involves generating new revenue through content licensing and gaining more ownership of series on the network. The goal? Better economics and more control over their programming destiny.
Targeting Core Audiences
The CEO emphasized Starz’s focus on women and underrepresented audiences. With what he describes as “an incredibly strong slate of originals” coming over the next year, the company plans to scale its core viewership. It’s a specific demographic strategy that sets them apart from broader streaming services.
Whether this approach can overcome the financial challenges remains to be seen. You need compelling content to attract subscribers, but you also need those subscribers to justify the production costs. It’s a delicate balance.
Major Structural Changes After the Spinoff
Being independent means Starz can make decisions without Lionsgate’s input. During the analyst call, Hirsch outlined some significant changes to how the company operates. These aren’t just small tweaks—they’re fundamental shifts in business strategy.
Restructuring the Canadian Operation
One major change involves Canada. Starz is replacing its joint venture model with Bell Canada with a simpler content licensing agreement. This means you won’t see Canadian subscriber numbers in future reports anymore.
Why make this change? Hirsch explained that managing a three-partner deal made it extremely difficult to handle customer acquisition and retention effectively. He said, “It was incredibly hard for us to do what we do here in the U.S. in terms of managing the consumer acquisition, retention and all of the different lifecycle management.” Fair point—too many cooks in the kitchen can definitely complicate things.
Finding Partners for Content Production
Another interesting development involves the show Fightland from Curtis “50 Cent” Jackson. Starz is actively looking for a commissioning partner to help produce the series. The goal here is improving the economics of their originals by sharing production costs and risks.
This partnership approach could become a model for future shows. Instead of shouldering all the financial burden yourself, you bring in partners who also have skin in the game. It’s a smart strategy when you’re watching every dollar.
What Analysts Expected From Starz
Back in August, when Starz released its second-quarter results, executives told analysts they anticipated growth in both subscribers and revenues during the second half of the year. They partially delivered on that promise with subscriber growth, but the revenue decline and widened losses paint a more complicated picture.
The company did manage to reverse subscriber losses from the previous quarter. That’s meaningful because it shows they can still attract new customers. However, the revenue situation suggests they’re not generating as much money per subscriber as they need to.
Streaming Revenue Challenges
The streaming revenue drop is particularly concerning. You’d expect streaming to grow as more people cut the cord and abandon traditional cable. Instead, Starz saw streaming revenue fall by nearly $10 million year-over-year. That suggests either pricing pressure or subscribers choosing lower-tier plans.
Linear TV revenue fell even harder, dropping more than $16 million. This is the expected trend as cable subscribers continue declining. The question is whether streaming growth can offset these linear losses quickly enough.
Looking Ahead at Starz’s Strategy
Starz faces some serious challenges as it establishes itself as an independent company. The widening losses aren’t sustainable long-term, so the pressure is on to improve profitability. Hirsch’s strategy focuses on content licensing, better production economics, and serving specific audiences.
The content licensing piece could be crucial. By selling their shows to other platforms, Starz can generate additional revenue from content they’ve already produced. It’s found money that helps offset production costs.
Can Original Programming Drive Growth?
Everything depends on whether their upcoming slate of originals can attract and retain subscribers. Starz needs shows that get people talking and keep them subscribed month after month. Their focus on programming for women and diverse audiences gives them a clear identity, but the content has to deliver.
The company’s willingness to adapt—changing the Canadian model, seeking production partners, licensing content—shows flexibility. They’re not stubbornly sticking to one approach when it’s not working. That adaptability could prove valuable as they navigate independence.
With only six months as a standalone company under their belt, it’s probably too early to judge whether Starz can succeed on its own. The subscriber stability is encouraging, but those widening losses need to reverse course soon. Investors and industry watchers will be paying close attention to the fourth-quarter results to see if the promised momentum actually materializes.
