Decline in AVOD segment pulls down WildBrain’s Q1 2021

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The company's revenue was down 15%, but its recently expanded Apple TV+ deal is expected to help drive new growth over the next year.

While WildBrain reported a 14.9% decrease in Q1 revenue ($95.5 million in 2021, versus $112.3 million the year before), it’s counting on its recent Peanuts deal with Apple TV+ to help right the ship.

The revenue drop was driven primarily by AVOD business WildBrain Spark, which was offset by stability in the company’s other categories. WildBrain Spark faced the same problems many YouTube creators have throughout the pandemic; despite a spike in viewership, there was a decline in revenue due to changes in kid-targeted advertising policies and ad spend decreases related COVID-19. Although WildBrain Spark’s revenue was down 59.7% from the year before to $8.9 million, advertisers are returning to the platform, said CEO Eric Ellenbogen on the earnings call.

Despite the drop, the company is confident that its growing number of SVOD deals – including Johnny Test for Netflix and Snoopy content for Apple TV+ – will drive substantial new production, distribution and consumer products business in the coming quarters, said Ellenbogen.

The expanded Apple TV+ deal for all Peanuts content, which was announced in October, is the largest content deal in the company’s history, he added. It could net around US$20 million, Ellenbogen said. Under the deal, WildBrain is in production on season two of Snoopy in Space and season one of Snoopy Show. Apple TV+ also ordered new family specials, as well as a 70th anniversary special that the company is coproducing with Imagine Documentaries. The full impact of the deal on WildBrain’s revenues will be reflected in its 2022 financial reports.

WildBrain consolidated its revenue lines into three categories starting this quarter – content production and distribution, consumer products and WildBrain Spark. In previous reports, the company separated its production and distribution revenue, and had separate lines for consumer products revenue and the WildBrain CPLG business. Its content production and distribution revenue stayed relatively flat at $36.3 million, a 3% increase from the year before, driven by the success of its shows on streamers.

The company has been focused on ramping up its studio and inking new SVOD deals, and is now looking to dive into its library of IPs to spark additional growth, added president Josh Scherba. WildBrain is currently working on building out new content for Strawberry Shortcake, Teletubbies and Inspector Gadget.

Despite the declines, the company is benefiting from a growth in co-viewing, said Ellenbogen. In particular, smart TVs are making it easier for families to watch content together, opening up new CP and content opportunities for family-friendly shows.