Movie and TV content studio Lionsgate Entertainment (NYSE:LGF-A) (NYSE:LGF-B) reported second-quarter results this week. The company posted both revenues and earnings far above Wall Street's estimates, sending the two stock classes more than 13% higher on Friday.

The studio's sales rose 9% year over year, to $984 million, while adjusted earnings held firm at $0.22 per diluted share. Both of these results came as a surprise to Wall Street analysts, whose consensus estimates called for a net loss of $0.05 per share on approximately $312 million in top-line revenues.

That's the headline material, but the plain numbers never tell the full story. Paying close attention to the entire report will help you separate truly fantastic companies from the wannabes and the has-beens. Let's take a deeper dive into Lionsgate's results and earnings call to get a better grip on the real news here.

A young couple, sharing popcorn on the TV couch, stare at the screen in wide-eyed amazement.

Image source: Getty Images.

1. The times, they are a-changin'

Lionsgate CEO Jon Feltheimer started the conference call by acknowledging how quickly the entertainment industry is changing right now, and how hard his company must fight to stay relevant. "To paraphrase Mad Men's Don Draper, it's a different universe today," he said. "I want to start by emphasizing how well our businesses are positioned in this incredibly disruptive environment and highlight their strong performance."

The Starz network is of crucial importance here, but not necessarily in the form of a traditional premium cable channel. The STARZPLAY INTERNATIONAL streaming-video service has been rolled out in more than 50 different countries now, becoming Lionsgate's face to the world in many ways.

Starzplay accounted for 1.2% of Lionsgate's total second-quarter sales, up from a mere 0.1% in the year-ago period. The company is investing heavily in this expansion, building out the needed technology platforms and then kicking off marketing campaigns to bring some subscribers to the party in each new market.

It's more than an international expansion strategy, too. Streaming-video services in the domestic market doubled in size on a year-over-year basis, now representing a 2.1% slice of Lionsgate's total revenues. All of these streaming-video efforts are unprofitable today, but they also form the core of Lionsgate's long-term strategy and will be allowed to run up some red ink while their platforms and marketing messages mature.

2. Better together?

One analyst asked whether it would make sense to break Lionsgate apart into separate Starz and "legacy entertainment" businesses. That query echoed reports earlier this year that CBS wanted to buy the Starz division and fold it into its own media conglomerate.

CFO Jimmy Barge stepped up to the plate with this response:

The quickest and easiest example to look at the benefits of these companies being together is the international launch. As we've mentioned, we're in almost 50 countries and it honestly couldn't happen without the Lionsgate library, without the fact that we are making available in the U.K. and in India the feature films in a pay-television window. That we work together on original series from Lionsgate.

Barge celebrated the marketing synergies that stem from backing a new streaming service with a proven content library, an argument that should sound familiar if you've followed Walt Disney and the upcoming launch of its Disney+ streaming platform.

If you build it, they will come. If you also supply it with plenty of attractive content, they will stick around and bring their friends. Therefore, Lionsgate needs to pair its streaming services with that meaty content library in order to boost its global growth trajectory.

3. Content, content, content!

In order to fuel the cable TV and streaming platforms with fresh content, the Starz division started up more than 80 different projects over the last 1 1/2 years. Some of these shows are made under contract for other broadcasters, covering nearly 20 different platforms in all, but some are headed straight to Starz-branded platforms, as well.

The proven hit shows Weeds and Mad Men are hitting the global syndication window next year. That's another pair of great fits for Starzplay in its approximately 50 current markets and for whatever new markets Starzplay might launch in after that.

There's even room for some innovative split-licensing deals here. One of the new shows is romantic comedy Love Life, starring Anna Kendrick, which will premiere as an HBO Max original in the American market while launching on Starzplay internationally.