What happened 

Shares of Lionsgate (NYSE:LGF-A) (NYSE:LGF-B) jumped as much as 12.5% in trading on Friday after reporting second-quarter fiscal 2021 results. At 3:10 p.m. EDT shares were holding up 11.2% and look like they'll end the week on a very positive note. 

So what

Quarterly revenue fell from $983.5 million a year ago to $745.0 million, and net loss was $18.4 million, or $0.08 per share, as movies were all but shut down. And results even fell below the $760.4 million in revenue and $0.03 loss that analysts expected.

Cinema sign with locked doors.

Image source: Getty Images.

What was particularly encouraging was the 2.3 million global over-the-top subscribers added to the company's network, reaching 13.7 million in the quarter. STARZ alone added 1.8 million subscribers to 9.2 million, showing some traction in the streaming business. In a world of COVID-19, building that base of customers is more important than any small earnings miss in the quarter. 

Now what

Lionsgate still has an uphill battle against much larger studios and streaming networks, but it's making some progress. Building a streaming service that can generate consistent revenue will be a big win even when we can return to theaters again. But long term, I worry that consumer-discretionary stocks like this will go through ebbs and flows as consumer media preferences change. That's what'll keep me out of the stock until we know that the streaming business is big enough to be a force in the future of media. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.