Starz Entertainment Corp. (NASDAQ:STRZ) Q3 2025 Earnings Call Transcript

Starz Entertainment Corp. (NASDAQ:STRZ) Q3 2025 Earnings Call Transcript November 13, 2025

Starz Entertainment Corp. misses on earnings expectations. Reported EPS is $-3.1497 EPS, expectations were $-1.16.

Operator: Good day, and thank you for standing by. Welcome to the Starz Third Quarter 2025 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your host today, Nilay Shah with Starz Investor Relations. Please go ahead.

Nilay Shah: Good afternoon. Thank you for joining us for Starz Entertainment’s Fiscal 2025 Third Quarter Earnings Call. We’ll begin with opening remarks from our President and CEO, Jeffrey Hirsch followed by remarks from our CFO, Scott MacDonald. Also joining us on the call today is Alison Hoffman, President of Starz Networks. After our opening remarks, we’ll open the call for questions. The matters discussed on the call include forward-looking statements, including those regarding expected future performance. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors. This includes the risk factors set forth in our most recently filed 10-Q for Starz Entertainment Corp.

Starz undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. The matters discussed today will also include non-GAAP measures. The reconciliation for these and additional required information is available in the 8-K we filed this afternoon, which is available on the Starz Investor Relations website at investors.starzcom. I’ll now turn the call over to Jeff.

Jeffrey Hirsch: Thank you, Nilay. Thank you, everyone, for joining us today. I am pleased to report that Starz delivered a strong quarter, both financially and operationally. Before I get into the highlights of the quarter, I want to give an update on how Starz is executing against our post-separation plan. As we laid out at separation, our growth strategy has 2 clear paths. First, our focus has been on growing our core business by increasing our margins to 20% as we exit calendar 2028, converting 70% of adjusted OIBDA to unlevered free cash flow and delevering to 2.5x as quickly as possible. Rebuilding our content library through ownership is a key component to delivering this result. Ownership of our series improves both the cost structure of our content and allows us to generate incremental revenue through international content licensing.

Today, we are announcing a structural change to our Canadian operation. We are moving from a joint venture model to a stable, consistent content licensing agreement with our partner, Bell Canada. Under this new simplified structure, the Starz-branded service will continue to be available in Canada and Starz will generate international licensing revenue, while Bell will assume full operational responsibility in the territory. This approach is consistent with our strategy of owning our content and creating incremental licensing revenue without the need to operate international services directly. As we’ve shared over the past couple of quarters, we have been aggressively working toward delivering our previously stated goal of owning half of our slate.

We opened several writers rooms just weeks after separation. A couple of weeks after that, we greenlit our first Starz-owned original, Fightland from Curtis 50 Cent Jackson. The series currently in production in London, and we are thrilled with how the show is coming along. We have a stellar cast an award-winning stable of directors and producers, and we plan to have it ready to premiere next year. I’m excited to share today that we’re in the late stages of bringing on a co-commission partner on Fightland, which will improve the economics of the series. This will layer incremental international revenue on top of the previously discussed revenue from Bell Canada. The partnership will lower the per episode cost on an already attractively priced show and has the potential to expand to additional Starz owned originals.

Both the Bell and Fightland deals will be modestly accretive to adjusted OIBDA and free cash flow in calendar 2026, and they will assist us on our path to reaching 20% margins exiting calendar 2028. While we continue to strengthen our core business, we are also looking to build upon our valuable core demos of women and underrepresented audiences. With the potential for increased consolidation across the media landscape, we believe that we are uniquely positioned to capitalize on potential M&A opportunities. Given our track record of profitably converting our business from linear to digital and our industry-leading tech stack, we are poised to increase our scale as assets that are strategically valuable to Starz become available. Turning to the quarter.

We delivered on all key operational goals we outlined on our last call, including a return to positive revenue and U.S. OTT subscriber growth. U.S. OTT subscribers have now grown by 670,000 year-over-year with growth in 3 out of the last 4 quarters. We expect to continue revenue and U.S. OTT subscriber growth in the fourth quarter and to finish another year with approximately $200 million of adjusted OIBDA. Digging deeper into the third quarter results, OTT engagement reached a 12-month high, driven by the performance of Blood of My Blood, the Prequel to our hit franchise Outlander. The series successfully reengaged the fan base while also attracting new subscribers, demonstrating the continued strength of the Outlander universe. The quarter was also aided by the premier Ballerina from the John Wick franchise, which we strategically moved to air a quarter earlier than planned.

Key tentpoles in the fourth quarter include Season 3 of Power Spin-off Force and the new chapter in the Spartacus World, House of Ashur. Our slate continues to be strong as we head into calendar 2026. We have a full lineup of originals, including the return of some of our most highly anticipated tentpoles. These include the Epic Final seasons of Outlander and Power Book III: Raising Kanan, the premiere of Fightland, the return of Blood of My Blood and the new season of one of our biggest hits, P-Valley, from [indiscernible] winning creator to Katori Hall. Even with the strength of the slate, we expect investment in content to decrease year-over-year, helping drive improved free cash flow in calendar 2026. In closing, Starz continues to execute well in a rapidly changing operating environment.

While the media industry continues to face significant headwinds, we are confident in our ability to deliver on our plan, and we are well positioned to take advantage of the structural changes we expect to take place in the sector over the next 12 to 24 months. And now I’d like to hand it over to Scott to go over the financials.

Scott MacDonald: Thanks, Jeff, and good afternoon, everyone. It was a strong financial quarter, as Jeff noted, and I’m pleased that we reached the key financial metrics that we outlined on last quarter’s call. Specifically, we grew revenue sequentially and added U.S. OTT subscribers. Looking forward, as Jeff noted, we are affirming our guidance for the remainder of the year, which includes achieving positive U.S. OTT subscriber growth and positive sequential revenue growth as well as generating approximately $200 million of adjusted OIBDA for the year. Now let me walk through the financial details for the quarter, starting with subscribers. We added 110,000 U.S. OTT subscribers in the period, ending the quarter with 12.3 million.

The increase in the quarter was driven by the successful debut of Outlander Blood of My Blood and the [indiscernible] Premier of Ballerina. We ended the quarter with 19.2 million total subscribers in North America, representing a sequential increase of 120,000 subscribers. Our North American linear subscriber base ended the quarter at 6.2 million, which was flat on a sequential basis. During the quarter, the carriage dispute in Canada that we mentioned on our May call was resolved. As a result, we reinstated approximately 250,000 Canadian linear subscribers into our base, which offset linear declines in the U.S. As Jeff noted in his remarks, we modified the structure of our Canadian business, which will result in us no longer reporting Canadian subscribers starting with the December quarter.

The Canadian content licensing revenue that we will start to generate next quarter will be a component of linear and other revenue in our statements of operations. Moving on to revenue. Total revenue for the quarter was $321 million, up $1.2 million sequentially. OTT revenue was up $1.7 million to $223 million, while linear and other revenue was down slightly to $98 million. The sequential increase in total revenue was due to the content slate, which drove improved subscriber performance. Next, our adjusted OIBDA of $22 million was expectedly down $11 million on a sequential basis due to higher advertising and marketing costs related to driving awareness and subscriber acquisition in connection with the premiere of the first season of Outlander Blood of My Blood.

Additionally, advertising and marketing spend was impacted by the marketing associated with the Premier of Ballerina, which we aired a quarter earlier than originally planned. Next on to debt. We ended the quarter with $588 million in total net debt. As a reminder, debt includes $300 million of our Term Loan A and $325 million of our 5.5% senior unsecured notes, plus $37 million in cash. We had no borrowings outstanding on our $150 million revolving credit facility at the end of the quarter. Our leverage on a trailing 12-month basis was 3.4x for the quarter, better than the 3.5x we noted on the last call, and we continue to expect to exit the year with leverage at approximately 3.1x. As we have mentioned on our last couple of calls, we view 2025 as a transition year for our cash flow.

For the final quarter of 2025, we will have some fluctuations in the timing of our content payments, but we will reach a normal payment flow as we move through 2026. This will set us on a good path to deleverage, which, as we have noted, will be our focus in 2026 and into 2027. Now I’d like to turn the call back over to Nilay for Q&A. Nilay?

Nilay Shah: Thanks, Scott. Operator, could we open the call up for analyst questions.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Brent Penter with Raymond James.

Brent Penter: First one for me. Jeff, I appreciate the color on Fightland and good to hear that, that’s starting to make it through the process and expected next year. Can you just go over a little bit the mechanics in terms of the cost savings that you get as well as the international revenue you get when you produce your own shows with your own IP. I think you said like $1 million to $2 million in savings per hour from that in the past. So just can you help us understand where those savings come from?

Jeffrey Hirsch: Yes. Brent, thanks for the question. I think there’s 2 components to getting IP ownership back on the network, which really helps drive us to that 20% margin goal exiting 2028. First and foremost is we’re de-aging shows. So we’re going from late-stage shows, which are more expensive on a per hourly basis to newer shows, which, generally speaking, are much cheaper than a season 4 or Season 5. We also can control the economics in terms of how we start the show. And so we set the budget and what we’re willing to pay as we come into the content. And so as we open the writers’ room and they think about the show, they know what kind of financial envelope they have to work within, and we’re rigorously defending that number against that.

The second side, obviously, is as a U.S.-based company, we’re creating our own content. We can monetize that around the world. And much like if you think about the output deals that HBO and Showtime used to do outside the U.S. as we get to scale and we add 2, 3, 4 shows each year that we own, we can actually package those and really drive kind of an originals output deal that puts an MG or a good amount of incremental revenue on top of the business. And so creating and owning your own IP domestically allows you to control costs on the front end, but it also creates a lot of incremental revenue from outside the U.S.

Brent Penter: Okay. Okay. I appreciate that. And then when you all originally announced Fightland in the writers room, there were a few other shows that you talked about as well. So any update on any of those other shows? And should we expect those also to be coming in the near term? And could that help improve your EBITDA margin then once you start to get more of those owned shows?

Jeffrey Hirsch: Yes. We announced rooms on 4 shows right after separation. [indiscernible] was one of them, and that room is just about to close. So we have most of the script materials. It’s probably going to be shot in Venice. And so we’re looking at production partners. We’re also looking at brand partners to come in to also reduce the cost of that show. The other one was Kingmaker. That room is just about finished as well, and we’re really starting to look for production entities to help us produce that show as well. And those really should earnest come on the network into ’27, where half the slate will be owned by Starz. The fourth show we talked about was [ all ours ]. We just announced a production partner there, and we will start to move into kind of a writer’s room once we pick runner and a writer we’re in that piece right now.

So all those shows are moving really, really well. We’ve added a bunch more into development since we separated. And so we were really laser-focused on getting half that slate owned by Starz in ’27 and really then having the ability to go out and package those together and package kind of each year, 4 or 5 shows to a partner outside the U.S. that it will become our kind of distribution partner outside the U.S. and really drive significant incremental revenue.

Brent Penter: Okay. Great. And then final question for me. On the EBITDA guide, can you just walk us through the moving pieces? Obviously, it bounces around quarter-to-quarter based on the costs. So what are the kind of bridge to get us to the $51 million, I think, that you need in 4Q to hit the $200 million? And then through the separation process, you all had talked about the $200 million EBITDA and then that could be something that you would grow off of. Can you talk about your level of confidence that, that’s still the case that you hit the guide this year, but then you continue to grow off of that in the future?

Scott MacDonald: Yes, this is Scott. So on the cadence to get to the $200 million, and we feel confident getting there as we sit here in November. The first quarter was — I’m looking on a calendar year basis. Now the first quarter was our strongest quarter from an EBITDA basis. Q2 and Q3 were always expected to be lower from an adjusted OIBDA basis. And then Q4 was expected to be a better quarter. It’s really primarily due to the timing of content and the programming amortization that we’ll see in the quarter. So we’re quite — which are — we know what those items are at this point. So we’re confident that we will ultimately get to the $200 million. It’s about $52 million that we need in Q4.

Brent Penter: And just in terms of confidence level that the $200 million is a level that you can grow from?

Scott MacDonald: Yes. We’ve continued to deliver against that $200 million. And if you think about the building blocks that we’ve talked about, getting ownership on the network controlling cost. You’ll see our content cost spend will come down next year in ’26. That will further come down as we get 4 or 5 shows that Starz owns on the air in ’27. And that as we start to really get that content cost spend down, which is stuff that we can control, you’ll start to see the business move that margin up to 20% coming out of calendar ’28. And so we feel very confident that we can move that EBITDA up based on the fact that this is self-help and self-control.

Operator: Our next question comes from David Joyce with Seaport Research Partners.

David Joyce: Could you please provide some color about particular programming viewership trends, you did have to cancel BMF recently, and you’ve kind of alluded to that last quarter. But — how should we think about the performance of these shows granted that we look at the multi-day period?

Alison Hoffman: Yes. This is Alison. I think one of the things that we mentioned with Jeff’s remarks is that we did see improved engagement in the last quarter. So active — we look at it in terms of monthly active viewers. They hit a 12-month high and so we were really excited to see that. It was up about 7% versus the prior quarter. And I think that’s a testament to strong performing content like Blood of My Blood and movies that we have like Ballerina. And so I think that, that sets us up in a nice way in terms of that Outlander universe and what we can expect from that. We had Force premier last weekend. It went very well. We have early read on that, but we’ve seen stronger gross additions for Force than we saw with our prior 2 tent poles.

So nice trajectory there. We’re going into a really strong viewing and subscription time of year. If you think about Black Friday and holidays and people being home — so our expectation is that’s a really nice platform for growth for the service. Obviously, we have Spartacus coming on in December as well, that will be a new title, but really nice to think about sort of the Power universe being able to discover Spartacus and new viewers coming in for Spartacus and being able to cross you with the power of universe. So I think we’re very excited about that. And then just as we’ve mentioned, we’ve got — looking ahead to next year, we’ve got Outlander coming for a final season. We’ve got Kanan. We’ve got P Valley coming back. We’ve got Fightland, as Jeff mentioned.

So we’re feeling really good about our slate, what we’re seeing in terms of engagement and what we have coming up.

David Joyce: And can you provide color on how much of your overall viewership of your services is on theatrical content as opposed to these originals?

Alison Hoffman: Yes, definitely. In general, as it pertains to viewership or even how we think about subscription or subscriber acquisition, we measured in terms of first title streams. It is about 50-50 — it will vary by platform. So for instance, our own retail app will lean a little bit more towards the original series. We’ll see more viewership and subscribers coming in there for our originals. But then other platforms, other distributor platforms that carry us might rely more heavily on the movies. So it really is a nice portfolio. And I think if you think about our amortization versus sort of the viewership and the subscriber acquisition, it’s all really nicely aligned to performance.

Jeffrey Hirsch: The other thing I’d add, David, is if we look at the lifetime value of our customers, the consumer — or customers that watch an original on a movie, their lifetime value is significantly longer than if just one watch one or the other. So having a good mix of the portfolio of both originals and movies together really helps drive reduced churn and increase lifetime value.

Operator: Our next question comes from David Karnovsky with JPMorgan.

David Karnovsky: Jeff, it would be great to get your thoughts on the streaming landscape currently. I think investors sometimes have concern generally as they look across domestic operators on how much incremental volume or pricing growth there is from here. So I’d be curious to get your thoughts broadly and then if you can tie that context back to your confidence on continued OTT subscriber revenue growth at Starz, that would be great.

Jeffrey Hirsch: Yes. I think as I said in my prepared remarks, there’s a lot of headwinds out there. I think there’s a lot of moving parts. There’s a lot of integrations of platforms. There’s a lot of consolidation going on. And I think all of that creates a lot of noise in the marketplace for consumers, and it makes it hard, especially for us because we are a complementary service, and we do depend on these large broad-based streamers to package us, bundle us and sell us. We’re sold on top of Hulu, we’re sold on top of Amazon. I think we’re the most bundled service on Amazon today. I think we’re over 2/3 of all their bundles have a Starz component, and that’s really been our strategy. And so as people continue to change and focus on themselves to figure out what their platform looks like, it gets it a little more complicated for us to get sold on top of.

But as you saw, we’ve had 3 out of the last 4 very strong subscriber quarters. We think that will continue based on the strength of our content slate in the fourth quarter and through all of next year. And as people continue to raise rate as a way to drive revenue, it creates room for us to also raise our rate because as a complementary partner, we’ve always wanted a large gap between the stated retail rate of our broad-based streaming partners versus our complementary service. And so it continues to give us the ability to raise rate if we need to. But for now, we really think based on the strength of our content, we can continue to grow subscribers on an organic basis without — and revenue without having to put rate on the business today.

David Karnovsky: Great. And then I want to follow up on your M&A comments. I don’t know if it’s possible for you to give any more detail in terms of assets you might be interested in and how you think that can transform Starz’. And then how should we view Starz’ potential financing of any deals just given your goal to delever and maybe use of equity being a challenger.

Jeffrey Hirsch: Yes. I’m not going to comment any specific names, but I think I’ve said on a few quarters ago that we would like to diversify our revenue base from just an SVOD base into an AVOD and an SVOD base, because of the nature of the adult nature of our content and the amount of content we have, it’s not really possible for us to expand into an AVOD basis in terms of competing with the large giants in terms of advertising. But the one way we can do that is to look at [ maroon ] linear networks that are — that their consumers have moved to the digital side, but the brands are stuck on the linear side. We can use our tech platform to kind of — to reposition those brands into the digital world that are very complementary to the Starz content on the SVOD world.

And as we’ve seen and a lot of the work we’ve done, as you put complementary AVOD businesses next to the SVOD business, the churn reduction on the Starz side is really meaningful, and it really can accelerate both subscriber and revenue growth on scale. And so we’re super interested in looking at that. I do think as these large companies continue to consolidate, pieces of those businesses that become less important to them because their focuses are on, whether it’s the studio or the streaming services, not the linear, some of the networks that may strategically fit with Starz may become available. And I think we are uniquely positioned because of our — what we’ve done at Starz in terms of transitioning from 100% linear to 70% digital, doing that profitably, owning our own tech stack, having our own customer acquisition team, having our own data stack, we’re able to actually give that expertise to those networks and really put the businesses together and really generate a ton of growth.

In terms of the balance sheet is a pretty good size to be tax efficient in terms of some of these deals. But the one thing I would reiterate, and I said this in the last couple of calls is we’re not going to be in the market of doing deals that puts an incredible amount of leverage on the business. We just won’t do those deals. And so if it’s a deal that allows us to stay within the kind of the leverage range that we have, it fits with us strategically in terms of our 2 core demos and we believe that we can actually convert the business from linear to digital, and we think that’s our home run deal for us.

Operator: Our next question comes from Thomas Yeh with Morgan Stanley.

Thomas Yeh: I just wanted to follow up on your comments about the subscriber momentum into the back half of the year. Can you maybe just tease out the dynamics around churn relative to gross acquisitions supporting that momentum? Are we at a point where the slate is bridging consumers over from one series to the next and retention is benefiting? Or is this more like a gross acquisition story, given some of the bundling dynamics that have been picking up a little bit more?

Jeffrey Hirsch: Yes, I think what you saw in the quarter was — I would say it was a 2/3 was kind of on the growth side, a 1/3 was on the churn side, depending on the platform. The Starz app churn continues to come down to all-time lows. It’s a combination of stringing, like you said, stringing shows together, but also looking at longer-term offers. If you look at the business, if we can get a consumer to month 7 and month 13, churn gets down in the low single digits. And so we’ve been trying to use pricing strategy to drive consumers to that critical point where we can bring churn down significantly increased lifetime value. I think as we move into the slate in ’26 when you have shows — you really have shows sung back to back to back.

I think you’ll start to see that we’ll be more reliant on the churn reduction side of the business and less on the gross add side of the business. We did announce Power: Origins, which is an extended a longer season. That’s one of the reasons why we’re excited about that is to try to do a lot more episodes over a longer period of time. So you have a show that goes instead of 8 to 10 weeks, it goes somewhere between 18 and 20, 22 weeks. We think that may be another way to really drive churn down and really, especially at certain month points after the show premier getting that to a real all-time low. So we’re looking at not only back-to-back shows, but length of series to try to see if we can manage that in a longer way in a more cost-effective way.

Thomas Yeh: Okay. Understood. And can we revisit the Canadian business model shift? I might have missed this, but are you expecting licensing revenues to cover the existing subscription revenues? And is that licensing fee variable to what the partner benefits from, from a subscriber adoption perspective?

Jeffrey Hirsch: No, it’s a great question. Yes, it does more than cover what we had in terms of the subscriber business. It’s also much more stable in a sense. It was a unique deal where we had 3 partners in that deal. So it was incredibly hard for us to do what we do here in the U.S. in terms of managing the customer acquisition, retention, save cues, all of the different life cycle management. And if you think about, again, the building blocks of how we’re getting this business to extend adjusted OIBDA and get to that 20% margin, Canada and licensing is, again, another international territory. So you have to think about it as a kind of overall output deal with Canada for our content. We hope to have more of those around the world in terms of driving stable incremental revenue to the kind of linear and other line item in the revenue side.

Thomas Yeh: Okay. Great. And just last one for me. Can we revisit the cash spend outlook is $700 million kind of still the right number for 2026, and then it kind of continues to go down beyond that just based on some of the timing of how you transition to fuller slate.

Scott MacDonald: Yes. This is Scott. That is our expectation that we would be under — just under $700 million in 2026. And we’re still working through and we’ll provide a little more guidance on 2026 on our next call. But that’s the plan, and we’re also looking to move further down as we move forward, which is key as we de-age the content, as Jeff mentioned, get the ownership on the network that helps to bring the average cost per episode down of the portfolio of shows we have on the air. And that will contribute to getting down to that $600, $650 range here in a couple of years.

Operator: Our next question comes from Matthew Harrigan with The Benchmark Company.

Matthew Harrigan: Firstly, apart from the de-aging on the slate, I think you cited some advantages on the cost side in terms of development and maybe a little more latitude in terms of really using your data lake to optimize for Starz. I mean, even with the best of intentions, you may have had a bit of a suboptimization problem when you were so tightly bound with Lionsgate television. And then secondly, I thought your cash burn was a little bit less than — or actually quite a bit less than I had anticipated. I generally don’t ask too many prosaic cash flow timing questions. But does that more or less imply that maybe some of that got punted into Q4 and maybe people are probably going to be in roughly the same place on the cash burn for the year once you — before you get to normality more or less over the next couple of years?

Scott MacDonald: No. As we noted, again, this is Scott on our prior calls, the cash was going to be a bit choppy right after the separation. So the prior quarter, Q2, we were actually quite favorable. And some of that was just part of the process of us starting to manage our cash. This quarter, we were a bit negative. We expect to be a bit negative next quarter as well on that. And then we start to improve as we move through 2026. I mean it doesn’t change overnight. But some of the challenges has been we were not necessarily — when we’re producing shows in the past, typically, you pay for your show and fund it over its production cycle very consistently, and the shows are at different times in their production. So you get a much more consistent cash flow.

Just based on being part of the bigger studio, those cash payments dependent on the needs of the corporate parent. So we would — they were way more — they fluxed a lot more than you would like from a normal business perspective if you’re just a stand-alone company. That’s what we’re working on now to get that back into a better alignment with kind of what you see in the industry. And that’s — we’re getting — we’re starting to get there as we get to the end of the year. We’ll be working — still working on it early in ’26, but ’26 will start to get back in that more normal cadence. And you’ll see content spend, as we mentioned earlier, come down probably just below $700 million next year, which is a meaningful decline from where we are today.

So it’s really — it just takes some time to get that all worked out through the system. So it will be a bit spotty as we get into the Q4 and maybe a little bit into Q1, but we’ll see it start working to be much more consistent after that.

Matthew Harrigan: And I guess, then, on the development question, the development costs and your latitude for more creativity and maybe being faster on that side and getting costs down.

Jeffrey Hirsch: Look, I think all of having control over when you open a room, when you greenlight a show, when you go into production, to Scott’s point, timing and aligning all of the production to the on-air date to the cash spend. I mean when you get to a consistent kind of assembly line from the day you put it into development to the day you greenlight, to the day you deliver and you pay on delivery and then you air it, ultimately, we should get cash content spend should be 1:1 with cash air over time if you are consistent. Having control over our own production gives us the ability to align these shows and deliver them when we need to and so that we can get the choppiness of cash content spend out of the business. And so ultimately, the goal is when we get there is that cash content spend at amort should be almost 1:1 as the business goes forward.

Matthew Harrigan: And then on the marketing side, I thought you might have some ideas, particularly given the huge demographics actually that you’re targeting. But at the same time, I thought you might have some more opportunities there. Are you hamstrung by having such a high bundling component in terms of really being able to do marketing yourself to address those groups through a targeted process?

Jeffrey Hirsch: I don’t think we are. I mean I think bundling does a few things. I think back to the prior question, it allows us to align our content slate with others’ content slates to fill gaps and you do that at a discount for the consumer. So ultimately, you’re bringing 2 slates together to provide more benefit and more value to a consumer, which ultimately gives you more lifetime value. But again, we are distributed across all different vehicles. We have our own retail app. And again, when we market to our demos in ways that are unique to us, I think it rises not just our own retail, but the component of stars that are in those bundles as well. So we see in our data when we put stuff on the top of the funnel, it drives — it softens the bottom, not just for us and our own app, but for all of our partners as well, whether it’s a stand-alone a la carte sub or it’s in a bundled sub.

Operator: That concludes today’s question-and-answer session. I’d like to turn the call back to Nilay Shah for closing remarks.

Nilay Shah: Thank you, operator, and thank you, everyone. Please refer to the News and Events tab under the Investor Relations section of our website for a discussion of certain non-GAAP forward-looking measures discussed on this call. Thanks all.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.