LIONSGATE INDUSTRY REPORT

To: Tom Sheppard, Executive Director, Content Analysis, Strategy & Business Planning of
Lionsgate
From: Jabreneé Hussie, DevOps Program Manager
Subject: Improvement Strategy for Lionsgate’s 2023-24 Artificial Intelligence Integration
Initiative
Date:October 12, 2023

Improvement Strategy for Lionsgate’s 2023-24 Artificial Intelligence Integration Initiative

Executive Summary

This report provides insight on the current state of Lionsgate’s (NYSE: LGF.A, LGF.B)

Artificial Intelligence Integration Initiative and the next steps to continue to raise revenue. Prior

to 2023, AI had only been used in promotional material and partnerships. As of 2023, it is

proposed to integrate AI into the operations of Lionsgate (NYSE: LGF.A, LGF.B) as well as

maintain its promotional use. In 2022 revenue sat at $3.6 million. With the early stages of the AI

Integration Initiative in the 2023 fiscal year revenue has already seen an increase of 6.94444%.

Lionsgate (NYSE: LGF.A, LGF.B) should continue the momentum with the initiative by

implementing the ethical use of AI in production, and ethical utilization of AI in streaming

platforms.

Key Findings

● Lionsgate (NYSE: LGF.A, LGF.B) uses artificial intelligence to promote user

engagement, develop partnerships, and optimize operations.

● Lionsgate (NYSE: LGF.A, LGF.B) uses AI to make interactive content to broaden their

audience, to automate studio operations, and to widen their catalog of content.

● Lionsgate (NYSE: LGF.A, LGF.B) revenue saw a 6.94444% increase after migrating to

the cloud with the help of Ateliere Creative Technologies (ATELIERE, 2023)
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● Lionsgate’s (NYSE: LGF.A, LGF.B) fourth quarter fiscal year findings reported a 17%

rise in revenue from $929.9 million to $1.08 billion for this year in comparison to the last.

There has been an earnings per share loss of 42 cents compared to 46 cents per share in

the previous year (Vlessing, 2023).

Background

According to TechTarget, artificial intelligence (AI) is “the simulation of human

intelligence processes by machines, especially computer systems” (What Is Artificial Intelligence

and How Does AI Work?, 2023). AI is currently being integrated across many industries.

Specifically, there are polarizing reactions to AI integration in the film & tv industry. These

issues came to head as the Writers Guild of America went on strike on May 2, 2023 (recently

ended on September 27, 2023) and the Screen Actors Guild followed suit on July 14, 2023.

Actors, writers, and crew members expressed fears of being replaced by AI as part of their

grievances regarding changes within the industry.

Research Analysis

Lionsgate’s Promotions Utilizing AI

Lionsgate (NYSE: LGF.A, LGF.B) is currently using artificial intelligence in their

promotional content, partnerships, and to improve operations. They partnered with PhotoRoom,

an AI-based photo editing app, to launch the official filter for the fourth installment of the The

Expendables franchise (Chand, 2023). Fans can use this selfie generator to put themselves in an

image with their favorite Expendables (Chand, 2023). Lionsgate (NYSE: LGF.A, LGF.B) has

used AI and deep fake technology to help bring their movie from a R rating to a PG-13 rating

(Spangler, 2022). To give fans a more immersive experience with their beloved John Wick,
LIONSGATE INDUSTRY REPORT

Lionsgate (NYSE: LGF.A, LGF.B) created a chatbot to promote the move in 2017 (Jardine,

2017). On the operations side of Lionsgate (NYSE: LGF.A, LGF.B), the company is making

changes to promote efficiency for content distribution, collaboration, and sales (Tan, 2023).

Lionsgate Using AI to Improve User Engagement and Operations

Lionsgate (NYSE: LGF.A, LGF.B) currently uses AI to promote user engagement with

their film content. In today’s trajectory for marketing and social media, interactive content

provides the information needed to your viewers but makes it fun (Balkhi, 2020). Lionsgate

(NYSE: LGF.A, LGF.B) uses AI to increase the amount of their content being shared on social

media to help promote films, get more followers, and broaden your brand's audience (Balkhi,

2020). It also allows Lionsgate (NYSE: LGF.A, LGF.B) to stand out from their competition

which can translate to boosted revenue (Balkhi, 2020). They also optimize their operations using

AI. More user engagement can increase their profits and optimizing their operations will help cut

unnecessary costs. Lionsgate (NYSE: LGF.A, LGF.B) uses the automation sector of artificial

intelligence to help ease operations. According to Gary Ainsworth, Executive Vice-President of

Technical Operations & Delivery, “one of the main objectives to migrate to the cloud is sales

enablement and faster time-to-market. We aimed to create a better partner experience and

achieve greater operational efficiency while building for the future” (Tan, 2023). Lionsgate

(NYSE: LGF.A, LGF.B) is able to use these technologies to discover hidden or forgotten pieces

from their catalog (Tan, 2023). Lionsgate (NYSE: LGF.A, LGF.B) also uses the technology to

organize their catalog and push content to the cloud (Tan, 2023).
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AI Integration’s Impact on Lionsgate’s Revenue

As of January 2023, Lionsgate (NYSE: LGF.A, LGF.B) is migrating to the cloud

(enabled by DevOps by using artificial intelligence and machine learning technologies to

accomplish the company's goals.) with the help of Ateliere Creative Technologies (ATELIERE,

2023). The Ateliere Connect platform will be used to manage and distribute their TV and film

titles (ATELIERE, 2023). Due to the SAG and WGA strikes Lionsgate Television suspends

overall and first look deals with non-writing producers who are not provided services as they go

back in with unions to discuss contracts in September (Lionsgate Suspends Deals with

Non-Writing Producers amid Ongoing Hollywood Strikes, 2023). With the plethora of highly

anticipated content that is now flooding the news after the end of the writers strike on September

27th, Lionsgate (NYSE: LGF.A, LGF.B) can expect a somewhat good profit this fiscal year as

people are starting to go out more to visit the cinemas where most of their content flourishes.

The fourth quarter of the 2023 fiscal year for Lionsgate (NYSE: LGF.A, LGF.B) has

reported a 17% rise in revenue from $929.9 million to $1.08 billion for this year in comparison to

the last. There has been an earnings per share loss of 42 cents compared to 46 cents per share in

the previous year (Vlessing, 2023). The full 2023 fiscal year has seen a revenue of $3.85 billion

in comparison to $3.6 billion dollars in 2022 as seen in Appendix A (Lionsgate, 2023). This

increase in revenue can be attributed to the integration of artificial intelligence into the

operations, and strategies of Lionsgate (NYSE: LGF.A, LGF.B). The increase in revenue shows

that statistically the integration of AI into Lionsgate’s operations and promotions is a factor that

increases the revenue gained by the company as well as improving the standings of Lionsgate’s

shareholders.
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Recommendations

There are multiple opportunities for Lionsgate to continue to increase their revenue and

profit per share for their stockholders that lie in ethical use of AI in production, and ethical

utilization of AI in streaming platforms.

● Use AI tools such as Runway, an AI application that “allows filmmakers to mask and

rotoscope at record speeds without the tedium of scrubbing frame-by-frame”, to help

consume less time in VFX and animation (Academy, 2023).

● Use AI tools in post production like Topaz Labs, to enhance video quality to reduce time

and money spent (Academy, 2023).

● Implement predictive recommendation algorithms in streaming services, modeled after

Netflix’s success.

● Use AI and Data Analysis to recommend media from catalog based on social media

trends.

○ Use data analysis from the marketing department to see what is trending.

○ Use predictive recommendation algorithms in streaming services to recommend

movies and shows based on the data from the marketing department.

● Use streaming success to promote better outcomes for Lionsgate television by

recommending Lionsgate television shows based on what a viewer is watching on the

streaming platforms. Be sure to include when and where the viewer can watch the

Lionsgate show.
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References

Academy, F. (2023, May 17). Filmmakers Academy Premium Education. Filmmakers Academy.

https://www.filmmakersacademy.com/blog-how-ai-video-tools-are-changing-the-film-ind

ustry-2023/

ATELIERE. (2023, January 18). Lionsgate Selects Ateliere Connect to Meet Growing Demand

for Streaming Capabilities. ATELIERE.

https://www.ateliere.com/news/lionsgate-selects-ateliere-connect-to-meet-growing-dema

nd-for-streaming-capabilities

Balkhi, S. (2020, February 27). 7 Reasons Interactive Content is the Future of Content

Marketing. Social Media & Influencer Marketing Speaker, Consultant & Author.

https://nealschaffer.com/interactive-content-future-of-content-marketing/

Chand, N. (2023, August 30). Lionsgate Partners With AI Photo Editing App for ‘The

Expendables’ Franchise | Brand the Change. BRAND THE CHANGE.

https://brandthechange.com/technology/lionsgate-partners-with-ai-photo-editing-app-for-t

he-expendables-franchise/

Jardine, A. (2017, February 9). Enter the World of “John Wick” via Chatbot in Lionsgate’s

Interactive Movie Promo | Ad Age. Ad Age.

https://adage.com/creativity/work/john-wick-chapter-two-chatbot/50905

Lionsgate. (2023, May 25). LIONSGATE REPORTS RESULTS FOR FOURTH QUARTER

FISCAL 2023.

https://www.prnewswire.com/news-releases/lionsgate-reports-results-for-fourth-quarter-fi

scal-2023-301835126.html

Lionsgate suspends deals with non-writing producers amid ongoing Hollywood strikes. (2023,
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September 19). Yahoo Finance.

https://finance.yahoo.com/news/lionsgate-suspends-deals-non-writing-014913184.html

Tan, J. (2023, August 16). Sales enablement: Lionsgate’s leap into no-code cloud to revamp and

automate its media supply chain. APB+ News.

https://apb-news.com/sales-enablement-lionsgates-leap-into-no-code-cloud-to-revamp-an

d-automate-its-media-supply-chain/

What is Artificial Intelligence and How Does AI Work? TechTarget. (2023, July). Enterprise AI.

https://www.techtarget.com/searchenterpriseai/definition/AI-Artificial-Intelligence
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Appendix A

Appendix A

Note. This figure shows the revenue generated by Lionsgate from fiscal years 2007 to 2022 in

billions of dollars. The figure is relevant because it allows the comparison between revenue

generated in 2022 and revenue generated in 2023 from Lionsgate’s fourth quarter 2023 fiscal

year report.