He was entertaining, clearly pleased with the Crash Oscar win against long odds, but also very good at explaining the Lionsgate strategy of targeting low cost, niche markets with readily accessible and targetable audiences. He described LGF's advantage as having a "PT Boat versus an aircraft carrier mentality" in their ability to make decisions and produce films very quickly and efficiently.
The example that he gave was the Tyler Perry deal -- some of the LGF folks brought up the idea of starting a deal with Tyler Perry, who no other studios were really pursuing despite the success of his stage work, and within less than two months they were in preproduction on his first movie, Diary of a Mad Black Woman. They put a few million dollars in to produce that movie, and the two Tyler Perry films have so far brought in well over $100 million in two years.
Something similar happened with Crash: a few Lionsgate employees saw the film at the Toronto Film Festival, loved it and saw an audience, and moved very quickly to close the deal ... and this is the first "acquired movie" in 20 years plus to win the best picture Oscar (as opposed to films that were originated by studios).
They are willing to exploit any niche -- Urban (Tyler Perry, In The Mix), horror (Saw, Hostel), gross-out comedy (Larry the Cable Guy), "grown up Oscar candidate" movies (Monster's Ball, Crash) or controversial movies (Fahrenheit 911, Hard Candy), to name just a few. These niches all have ready-made audiences who can be relied upon to pay to see the movie, and they are generally cheap to make and to market. Marketing costs will never approach those of blockbuster films, and there will never be Tyler Perry Happy Meals at McDonalds, but as any marketer will tell you, if you can find the right niche to market to and do so inexpensively, you can make money without spending too much money.
Burns also had a nice quote on Lionsgate's ambitions. In his words, "we'd like to be the smallest studio with the biggest library." LGF is often rumored to be an acquisition candidate thanks to their massive library of film and television productions that generate a nice reliable income stream -- and recent news of film library acquisitions has accentuated the value of this backfile -- but there's also a good argument to be made for keeping this unique, eclectic producer independent and letting them continue to grow.
I've written about LGF before, most recently when Oscar buzz was growing for Crash. It stands with three other companies in the industry that inhabit my portfolio -- Marvel (MVL), Imax (IMAX), and Dreamworks Animation (DWA) but I think Lionsgate is the one of those that's probably the safest bet, regardless of the fairly turbulent history of its stock.
Unlike DWA and MVL, which depend on one or two blockbusters a year to drive their success, Lionsgate is going to throw tons of niche material at the marketplace at relatively low cost and see what sticks. With a much larger number of productions in both film and television every year, LGF doesn't live or die with the success of any one film (as we can see from their solid 2005 despite the failures of a few of their larger films like Lord of War and In The Mix).
And unlike IMAX, which depends on the continuing interest of moviegoers in the communal viewing experience of event films, LGF has a huge library of films on home video and television products that supply a very solid ongoing revenue stream regardless of the theatrical performance of any one film.
LGF 1-yr Chart