Lions Gate Entertainment Corp. (NYSE: LGF) is an independent film and television producer and distributor. The studio releases about 15 motion pictures every year and has about 12,000 motion picture and television titles in its library, which it distributes on home video/DVD, video-on-demand and pay-per-view, and network and cable television^[1]. Its first big success was American Psycho, and the company has since built a reputation for backing films that major studios find too controversial (Fahrenheit 9/11, Requiem for a Dream, Crash, etc.)^[2]. Notable TV shows produced by LGF include Weeds on Showtime and Mad Men on the AMC network^[3]. In fiscal 2010, Lionsgate released 10 motion pictures theatrically and 75 hours of television programming, primarily prime time television series for the cable and broadcast networks.^[4]

As an independent studio, Lions Gate is one of two pure plays in the entertainment segment. While many of its major studio competitors are part of large conglomerates with varied sources of income, LGF earns substantially all of its revenue from the production and distribution of motion pictures, making the firm’s business particularly vulnerable to the unpredictability of box office performance. The studio also has to contend with declining movie attendance and digital piracy, both of which have plagued the movie industry over the last decade. Also, the DVD market has matured in the past few years and sales have declined, a trend that adversely impacts studios like LGF. However, there is potential for future growth as next-generation DVD formatting and other digital platforms expand sales opportunities.

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