Starz's CEO explains why his strategy is 'all about global expansion' and how he's using hits like 'Outlander' and 'Power' to develop new shows

• Starz CEO Jeffrey Hirsch, who was promoted to the role in September, told Business Insider about his approach to the streaming wars and how he's taking the premium-TV network global.
• The premium-TV network, which came up in the 1990s as an add-on to basic-cable bundles, still sees itself as a complement to other video services, Hirsch said.
• Starz is focusing on audiences that it says have been traditionally underserved by premium TV, including women and African American audiences, with shows like "Power" and "Outlander."
• It's trying to develop more shows that serve those audiences so they keep subscribing, despite the barrage of other services available to them.
• The network has an in-house data analytics tool that helps it identify elements in storylines that might resonate with fans of its existing shows.
• Starz is also looking for global appeal, as it moves into more countries outside of the US.
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Starz CEO Jeffrey Hirsch knows his network's place in the streaming wars - and it isn't in a battle for dominance with Netflix.

The premium-TV network, which came up in the 1990s as an add-on to basic-cable bundles, still sees itself as a complement to other video services, Jeffrey Hirsch, who was promoted from chief operating officer to CEO of Starz in September, told Business Insider.

While competitors like Netflix - and HBO through its broader, forthcoming streaming home, HBO Max - try to replace traditional TV with general-audience streaming services that offer something for the whole family, Hirsch thinks there will still be room for services, like Starz, that serve specific audiences.

"Everybody else who's out there trying to replace basic television - they're really trying to be that first service in the home," Hirsch said. "We were never built to be that first service in the home ... We are still sitting in that second or third position, where we're sold on top of it as a real specialized service was deep and edgy content without ads."

Starz is focusing on audiences that it says have been traditionally underserved by premium TV, including women, African Americans, Latinx, and LGBTQ audiences.

It's found success with shows like "Outlander," a historical-fantasy series that's popular among women, and "Power," which was the most-watched premium-TV series among African American households last year.

Starz, which was acquired by Lionsgate in 2016 for around $4.4 billion, has been the subject of recent merger speculation. It was floated in media circles last year as a possible takeover target for an emerging company like ViacomCBS that was trying to fill gaps in its content arsenal and boost production capabilities.

Starz has deals with streamers like Disney Plus

Hirsch, who has kept his head down leading an international rollout and renegotiating TV distribution deals, has also worked to land deals with more streaming services to sell Starz on top of other platforms the way it has traditionally been sold on top of cable bundles.

Starz is available through services like Amazon Prime Video and Hulu, as well as internet-TV platforms like Sling TV. It also landed a deal with Disney, around the fall launch of its kid-friendly streaming service Disney Plus, to cross-promote each other's streaming apps.

"The partnership conversations are always hard cause they're business deals, but ultimately ... we should be wherever the consumer wants to have the product," Hirsch said. "The parents in the house watch 'Outlander' and then they buy Disney Plus for the kids."

The economics behind Starz, which has an $9-per-month streaming service in the US and international streaming app, StarzPlay, have shifted as the network's audience moves toward streaming.

More than half of Starz's revenue this year is coming from a la carte customers, who subscribe individually to the channel, either as add-ons to traditional-TV packages or through Starz's streaming apps, rather than through a bundle, the company said on its earnings call for the second quarter of its 2020 fiscal year.

Starz brought in $746 million globally during the first half of its fiscal year. It had 5.6 million streaming subscribers domestically, about 27% more than in the prior quarter. Across platforms, it had 24.7 million subscribers in the US, down nearly 2% from a year earlier. It covered the losses with customers from overseas, posting 27 million subscribers internationally.

The audience shift has also changed the way Starz programs for its audience

With audiences being offered more streaming alternatives, Starz wants to air content that serves its core audience of women every single week.

"Power," which has an audience that skews black and female, is airing its final episodes. So, Starz is developing spinoffs within the universe of the series, including "Power Book II: Ghost," which will feature Mary J. Blige. The network is also developing series like "Run the World," a comedy about black female friendships, and "P Valley," a drama set in a strip club, that it hopes will appeal to that audience.

Fans of "Outlander" fall into two camps, Hirsch said: they love period pieces or romances. Starz is programming for both of those bases with shows like "The Spanish Princess," the upcoming "Becoming Elizabeth," and a "Dangerous Liaisons" prequel that's in development. All focus on historical figures and time periods and include elements of romance.

Starz's direct-to-consumer streaming apps are also feeding the company's' in-house data analytics tool, which is used to help identify projects that fans of its existing shows might like.

Execs can input scripts into the tool, which will try to match the storylines to other programming the network is airing. It helps the content development team determine how likely an existing audience is to resonate with upcoming storylines or projects, though Hirsch said the team is not rewriting scripts based on the data.

"This is still 99% art and 1% science," Hirsch said. He said the tool gives execs "a better feeling that, of the elements of shows that are successful on the air for us today, this new piece of content will match that audience. We can transition the consumer from one piece of content to the next because the storylines are similar."

The network also uses data analytics to learn what its viewers are watching outside of its originals to make smarter deals with outside studios, and to understand who it's audience is to market to them more efficiently.

Starz is also making a big push abroad

Hirsch has also been making a big push for Starz internationally.

The network launched StarzPlay, an international subscription service, in five countries in November, and is slated to debut in 20 more this year. Starz has also moved across TV and streaming into about 50 countries.

The company is starting to learn how to program for global audiences. "Everything we're looking at now, it really has to serve the global footprint," Hirsch said.

For the third season of "The Girlfriend Experience," an anthology produced by Steven Soderbergh, Starz is relocating the setting from Seattle, Washington to London, England and plans to have an international cast. "Becoming Elizabeth" is also being created by a UK-based production team. And the network is exporting US shows from others studios, like "Killing Eve," to international audiences.

Other streaming services like Netflix and Amazon Prime Video are also focusing on international audiences to grow their subscriber bases, and put distance between themselves and US-based rivals.

Disney Plus, which launched last year in five countries including the US, also plans to expand throughout Europe, the Asia-Pacific region, and Latin American by 2021. HBO Max, which lands in the US in May, aims to move in Latin America and Europe.

Starz is trying to stake its claim now.

"It's all about global expansion," Hirsch said. "And we think there's a real opportunity to be first to market in the global arena, wake up in three to five years and have built a strong brand with a large subscriber base as that premium add-on."