Content monetization strategies from DHX Media prove successful

Content monetization strategies from DHX Media prove successful


(audience clapping) – Thank you. And since I see a few
friends in the audience who promised to heckle,
maybe we’ll just open this up to questions along the way
if you have any questions. That way I can kind of disarm
any hecklers, I’m hoping. Please, come in and have a seat. So, just in case you
don’t know much about DHX, I’ll give you a quick overview. You heard briefly that
we’re 10 years old now. In fact, May the 19th
is our 10th anniversary. And we’ve spent the last 10 years and for me more than that,
having founded Decode, building an international
kids television business or kids content business that
happens to be based in Canada. We now have four parts to our company. Our core business was production. We have studios in Vancouver,
Toronto and Halifax. Animation studios in
Halifax and Vancouver, about 800 people in
Vancouver, 250 in Halifax, and then we have a live
action studio here in Toronto. We also produced, I think, four or five series last year in the U.K. But the other real core
part of our business has been the worldwide
international sales part of our business. One of the things we’ve done
is we’ve grown this company over the last 10 years
is acquire libraries. We believed early on that
the digital transformation would ultimately revalue libraries and that there was content that did not have a place on linear platforms, there simply wasn’t enough shelf space, enough room, as many
channels as there are, but that there would be some home for it on demand platforms. So, we’ve been building that
library over many years, both through acquisition
of existing libraries and the original content that we create. We also have a. A couple of years ago, we
acquired the Family Channel assets in Canada, so we are broadcasters, of course, every producer
dreams of being a broadcaster so they don’t have to
go and pitch and gravel, but somehow we’re still
pitching, not graveling so much. And then we have a licensing unit because one of the key
parts of the kids business, of course, is that it often
has a strong connection to consumer products. So our licensing group,
our brands group happens to be based out of the U.K. and we really do have a
significant international footprint with offices throughout North America. But on our licensing
businesses we have offices in London, Paris, Barcelona,
Milan, Munich, Amsterdam, Stockholm, Warsaw,
recently Athens and Dubai. And we manage consumer
products’ opportunities for a number of different brand
owners, not just ourselves. So for example, we manage the Minions across all those territories
for Universal Pictures and a number of other brands. But the core part of our
business and our key customers have always been broadcasters. And we sell to traditional
broadcasters around the world. And in fact, when people ask about us as a production company, I always say, “Well, we’re really a sales
focus company that happens “to be in the business of making content “to feed our sales and opportunities “and we have great relationships “with traditional broadcasters
around the world.” But the other part of
the business is really the growing SVOD and AVOD business. We have been one of the
leaders in selling content to these new platforms
as and when they start up and wherever they happen to arise. I had note this morning saying that Amazon just launched
the direct video, so this is truly late breaking news. All right, it’s a
screenshot from my email. There were some questions today around well, what are we doing about that? Are we in business with them? And the answer is yes, of course, but the thing that Amazon is now doing is really going to, in some
ways, compete with YouTube. And that really brings me to
the next part of our business which is something we really just unveiled a couple of weeks ago called WildBrain and this is a company that we’ve been incubating in-house since 2012. For me it’s been a kind
of an interesting story and an evolution and some
people have heard it. A number of years ago, we spent time, at least our lawyers
spent time sending cease and desist notices to
people who were putting what we call user-generated content up and we call them friends
and fans, not pirates, but there’s a lot of pirates there. We were sending cease and desist notices and then YouTube’s or Google’s
content claiming system evolved to a point where
instead of asking people to take the content down that we own, we started to claim it
and monetize it ourselves. Again, I don’t know how
much you know about that, so we’ll just go into it a little bit. If we can demonstrate to YouTube, YouTube doesn’t care where
the content comes from. If you put a Caillou video up
and you say you’re the owner, then as they sell ads on that,
they will send you the check. If you can demonstrate that you’re the legitimate copyright
owner of that content, they will instead send you the check because there are ad server member Youtube has enabled on platform. So we started to monetize our content on YouTube that is strictly by claiming. And it actually created
some small controversy inside the company
because there were people in our brand group who said, “Well, hang on, we shouldn’t
be serving ads against Caillou. “They’re for the youngest kids.” But one of the things that we said on the commercial side was, “But somebody else is
putting that content up “and there are ads being
served against anyway. “Why don’t we just step
in the line and collect?” So that’s what we started to do. We developed an interesting
and good relationship with YouTube and then they launched the series of subscription services. And again, I don’t know
if anybody remembers this but there was quite a bit
of publicity and promotion around the launch of YouTube
subscription services. And so we signed up and
had, I think, three channels in 10 countries in different languages and it was kind of a
massive thing to set up and one of the things
that we started to do out of that opportunity was
build a massive database which we call mega data for
our some 12,000 episodes. I think we’re now up to
17,000 separate assets in our catalog. And so the first step in
this was actually building this mega data and it really
is a metadata database of every title that we own
so that we could use them as reference files when figuring out where our content was
around the world on YouTube. We signed up for a few of
these subscription channels. We loaded a bunch of content
up from our database. There were conflicts with
the existing licensees and some of the territory’s
traditional broadcasters didn’t necessarily like this. And guess what? The YouTube subscription
model didn’t exactly work. I think we had five subscribers. Well, maybe it wasn’t five,
but it wasn’t very many. But what it did give us was a really great close
relationship with YouTube and they were interested
and impressed in the way that we had constructed our database and understood our library
in quite a deep way. So, that’s 2012. This has grown into a
point now where, I think, we’re up to 750 or 800
million views a month of all of our content. We manage content for a
number of other companies, including people like Turner,
some of their content. And it’s been a significant and growing part of our business. But one of the things that it’s done is and this will be, I
think, a bit of a theme through what I have to say today. For us this has been a
really interesting step into the world of the way that kids are consuming content now because YouTube is where they are. They’re on YouTube and they’re on Netflix. So at this point, yes, some of my slides
are better than others. What this shows really is that
the kids channels are really some of the most popular
channels on YouTube. Kids and music. Justin Bieber being right
up here at the top almost. And so one of the things that
we’ve done is really worked to manage our various channels. So at this point, almost
all of our content is actively managed by our team, which has been partly based in Toronto and partly based in the U.K. But the other thing, I’m
here to talk about some of the other things
around discoverability, and this is, I think,
again, there’s a number of different things
that you’ve heard about, whether they’re recommendation
engines, algorithms, there’s a whole litany of new terms to go with this notion of discoverability. Again, when it comes down to it, we’re still traditional broadcasters and producers of long form content where the primary market is
the international broadcasters. So I thought what I’d
do is just shift gears and talk a little bit about what we’re doing actually on the content side, irrespective of some of
the distribution platforms. I think this is for us
one of the things is to be platform agnostic overall, have your content on
every possible platform, but understand which platforms
are actually paying the way. I’m gonna kind of divide
it up into two things. The first thing I’m gonna talk about a few of our legacy properties, because in a library like ours, we have a bunch of
different legacy properties that are very well-known. And when it comes to the
issue of discoverability, it’s much easier to get an audience that’s interested in those. So I will start with Degrassi which, of course, is hugely well-known. It’s been around, I
think, almost 32 years. There’s over 400 episodes produced. And we acquired the Degrassi
company a few years ago from Linda Schuyler and Stephen Stohn. Linda is the original
creator of the series and is still working with us on the show. And a year after we acquired it, the key U.S. long-term
broadcaster called us up and basically canceled the show. In fact, what they said was,
“We’d like to wrap up the show “by doing maybe a couple of specials “and oh, by the way, could
you get Drake in it?” Which we politely said no and came back to Toronto and huddled and strategized. We’ve already developed the next series, the next season, as it is the next class. Our next step was actually to
take the team to Los Angeles and go and pitch what might
be replacement partners for our traditional broadcast partner, and we didn’t even go to the
traditional broadcast partners. We went to Amazon, Netflix
and each one of them showed a huge amount of interest in the show, and we ultimately made a deal with Netflix and we’re now on our
second series with Netflix. And the thing about this show
for them that was appealing was a built-in audience,
built-in awareness and I think some of these things
are really kind of obvious. But for us, even though
it’s obvious in retrospect, we had no idea when we
were going in and pitching. We had a pretty good idea that
those new platforms would be the most likely buyers of the content, but we were amazed at how
quickly they responded and the way that they
assessed the property was so different from a
traditional broadcaster. In this case, it was all about the data. It was data-driven. They wanted, and they had, of course, Netflix doesn’t share their
data with other people, but their research department
certainly does a deep dive into this to understand
exactly what position this property holds in
the minds of audiences. And again, we don’t really
know how well it’s done in its first season on Netflix, but it did well enough for
them to order another season. And by the way, we have this
on the Family Channel in Canada and Netflix has it worldwide. And one of the issues and you never know who you’re going to run up against, but because Degrassi is serialized, because we’ve carved it a
window for Family Channel in Canada, one of the
issues we ran up against with this was the spoiler alert. Of course, I think, again,
one of the great themes of the new platforms like Netflix is that they really forced drama to, they made drama better, in my view, and especially when you
look at serialized drama that really engages audiences. And it’s great if you can
find it the first time, but if you get hooked,
you watch the whole thing, everybody knows about binge watching. Well, Degrassi is serialized and because Netflix
doesn’t have it worldwide, we have effectively and
primarily in Canada, one of their biggest
concerns was spoiler alerts on social media, if it
aired in Canada first. And at the opposite edge of the age range, the Teletubbies. – [Voiceover] Steve, Steve. – Yeah, oh, Doug. – [Voiceover] What happened
with the social media? How did that end up? – Well, It was a concern
before the broadcast. It didn’t turn out to be
that big a deal, so we hear. But again, it’s hard to get
real hard evidence of this. It didn’t seem to affect the viewing and I think the conclusion, ultimately, was that Degrassi fans
would go to watch Degrassi whether they knew what
was gonna happen or not. – [Voiceover] But they
put it up all at once so that people could binge watch it. – Correct. – [Voiceover] You had it
staggered over a schedule. – That’s right. – [Voiceover] All right. – And so there’s a whole thing about negotiating windows in that case. – [Voiceover] So the
Canadians would have (mumbles) and the other thing is that the Canadians couldn’t get access unless they had a VPN. – Correct. – [Voiceover] So, the Degrassi have been at the center of the
Canadians who were angry that Netflix is cracking down on the. – It could be. I haven’t heard of that. – [Voiceover] Oh, sure. (chuckles) – Yeah, oh, we’ve got others? Now I’ve lost my place, Doug. (audience murmurs) Really? Thank you, thank you. – [Voiceover] We can
take over at any time. – I know. – [Voiceover] We’re here for you. – I know, it’s good to have friends. So the remaking of the Teletubbies could have gone horribly wrong. It originally aired in 1997 and it had millions of
fans around the world. It turns out there are some people that didn’t like the Teletubbies at all the first time
around and asked why, with 365 episodes, we
would want to make more. Well, there were a number
of different reasons. One of them is that the
original Teletubbies were done before HD television. They’re actually shot in a farmer’s field that was sculpted and landscaped and they really don’t hold up
to a traditional broadcast. They look okay on a small
screen, but not in HD. So we actually went to the BBC and said we think there’s a way
of using new technology. In fact, instead of going to
a farmer’s field and building, if you can imagine, in England where it rains at least half the time, trying to have these extra
large characters outside, impossible production scenario. So what we did is basically
used the technology that made Lord of the Rings,
and Harry Potter possible, green screen technology. We built basically a model. I think it’s four meters across. But basically we built what is a model of the Teletubbies’ world and we shot them all blue
screen in the studio. I don’t have a clip here today but it is absolutely seamless. The show looks great. It’s a hit in the U.K. It’s been doing very well. It launch in the U.K. in the U.S. soon. The reason I wanted to talk
about the Teletubbies is it targets kind of the youngest viewers and the BBC has a tradition of doing shows that are really at kids’ bedtime, six or 7 o’clock in the evening and they’re probably the
only broadcaster in the world that actually has ever made shows that are for kids under three. In lots of territories
there are no ratings for kids under two. In most places people don’t think kids should be watching television
before they’re two or one, but anybody who has a two-year-old, I don’t, but I’ve seen
two-year-olds with iPads and they’re way better
than I am with an iPad. So kids really are some
of the earliest adopters of the technology. And again, for us,
that’s one of the themes. We are targeting a generation. Miss Schuvle talked about
the group that they had, which was, I think, teenagers, 15 to 18-year-olds, 17-year-olds. And of course, our audience
is really up to 13. So the reason I wanted to
talk about the Teletubbies is that they were no longer
on the air and we were, and again, this is go
back to the YouTube theme. We were looking at
YouTube and this is even before we acquired the
company that made them. We’re looking at YouTube and
realizing that two things. First of all, that there
were tens of millions of views a month, like 25 million views a month worldwide of the Teletubbies, first of all and secondly, that nobody was monetizing them. Ragdoll, the company created by Anne Wood, who created the Teletubbies and a number of other iconic British shows was coned between Anne and the BBC
and they decided to sell it. We acquired it, but when we
were doing the due diligence and the research trying to figure out what that company was worth, a big part of our due diligence was based on the YouTube figures that we looked at to see what the viewership was for things like the Teletubbies and the number of the other shows in the library. And what we realized, two things. First of all, that they were
more popular than we imagined, still, with kids and parents. In terms of discoverability, this, because, again, this is the
thing, this is the legacy brand, is that parents or grandparents
were directing their kids to this kind of content on YouTube. And the other thing is that
we use that as evidence for broadcasters to say
this is still popular and if you, broadcasters,
are having a hard time with brand new shows, getting
people to tune in and watch, we’re gonna make a great version of a well-known brand already and you will have an easier time in terms of your, you know, ratings. We also then actively started to manage the Teletubbies content on
YouTube to the point now where I think up to 90
million views a month. So it represents a big chunk
of the viewership that we have, and by the way, with YouTube, we know where people are watching, we know what device they’re on, we know which territory
they’re in, what city. We know how long they watch. We generally don’t know
who they are, though, but we’ve got a pretty good idea. Yes, so that’s the Teletubbies. Any questions on the Teletubbies? – [Voiceover] How do you monetize that? – Well, YouTube serves
commercials against it and that, I mean, this is AVOD, so for us, on YouTube, it’s AVOD. The new episodes are not on YouTube, only the old episodes are
and then some clips and games and some other little bits and pieces. So the new episodes are
traditional monetization through broadcast sales and then there’s some other toy
deals and a whole long list of other consumer products deals for that. Doug. – [Voiceover] You said
you got into this arena because the user generate, you found that your shows were being
put on YouTube by users. – Yes. – [Voiceover] So in effect
fact, there wasn’t any kind of scheduling (mumbles) behind it. Now you’ve said we’re moving toward a more managed due diligence. What does that mean when you say manage and what proportion of
the revenue you get comes from the manage side as
opposed to the user-generated? – Yeah, it’s an interesting area. You know, the statistics
change every week. We’ve set up official channels for many of the titles that we own and what we’ve seen is as
the user-generated content, and there’s lots of user-generated content that truly is piracy. As so as pirates have been discouraged, what we’ve seen is the user-generated drop and the official channel
rise quite simply. – [Voiceover] How do you collaborate your the YouTube viewership in
your marketing campaign to bring people to the new show? – That we do territory by territory. We have to do that in a
partnership with broadcasters. Broadcasters in different territories have different attitudes towards that as a positive or a negative thing. What we do have is we have, basically, short teaser content of
the brand new Teletubbies on YouTube, so it’s very limited. What we’re really trying
to do is make sure that we’re encouraging the content, the viewers to go to
our broadcast partners. Sure. – [Voiceover] Just a quick question. Do you think that the YouTube
videos reduce your ability to make linear sales of
this library contents or is your logic that you sort of made all the money you can from
these broadcast deals? – So far it hasn’t. Again, that’s such an evolving area. As I say, broadcasters
in different territories have different attitudes towards it. So this will on
Nickelodeon Jr. in the U.S. One of the things that
they insisted on was that they limit the
number of episodes we have on our official channel. So each territory is different that way depending on who the broadcast partner is. Gigi. – [Voiceover] Just going back to Degrassi, if you don’t mind. – Sure. – [Voiceover] Did you discuss with Netflix or did you think about
like doing another version for them without the next ons or whatever they
considered a spoiler alert? Like, what was that discussion? Like or did they just take the content that you created and said– – Well, they bought it before we made it. – [Voiceover] The two versions. – No. – [Voiceover] Just think
about doing like one without the next on, I don’t know what they would consider a spoiler alert in the binging world. – We had developed a new series in anticipation of our
U.S. partner continuing. When they passed, we just took
the new version to Netflix and then did some new
development for them around that and that’s all separate from
the spoiler alerts stuff. The spoiler alert stuff is
all on social media, right. – [Voiceover] So they
were just worried about that the people were
talking and you didn’t worry about like what was in your next on or what was in your previously
on or anything like that? That’s not part of the equation? – Not really. – [Voiceover] Okay, I get it. – Yeah. – [Voiceover] Can I ask another quickie? – Yes. (audience laughs) – [Voiceover] The traditional role of a Canadian broadcaster, say, with the series of (mumbles) production is that they would have executive
clients of the show look at every script, get notes and so on. I know that from Stephen and Linda that the tone of the Degrassi series changed fairly considerably
with the new series that went to Netflix. What this role does Netflix play? Does it play a role
that’s in terms of content and creative supervision? Does it play a role that’s like the Canadian broadcasters
used to or did or do? – Well, I think again, that’s one of the really interesting
things for those of us who’ve grown up selling
content to broadcasters is no, they do not play quite the same role. In fact, they’re hugely creator-friendly. I think it’s one of the things that they promote about themselves. They do have opinions and they
do have executives signed, but it’s very, very different from working with a traditional broadcaster. Initially, most of those companies or platforms had more
people analyzing data than they did analyzing script. And then I just thought I’d
put Inspector Gadget up here, another show that has
real heritage and legacy. It was initially produced as
a Canada France co-production, 1983, Michael Hirsh was one
of the executive producers. We re-launched Inspector
Gadget a couple of years ago and it’s done very, very
well around the world. And so I think that one of
the things here is that, for me, it’s Degrassi started in ’79, this show started in
’83, Teletubbies in ’91. So if you look at this, there are parents who grew up watching Inspector
Gadget, who were actually, I mean, the numbers, again, from YouTube. When we’re looking at this, the numbers for Inspector Gadget were huge and we believed that it was, of course, parents sitting down
with their kids saying, do you want to see a really great show? Now of course, you look
at them and you say, wow, it was never that
slow when I was a kid. That’s a different subject. What’s my next slide there? Okay, so I’m gonna move from
the legacy brands to the new. And I think that for us, as broadcasters, we spend a huge amount of
time trying to figure out what we think is going to
work as far as new shows and certainly, there have
been creators who’ve said, well, if you’re only focused
on recycling old ideas, what about some of my new great ideas? And of course, we continue to believe that fresh new programming
is one of the things that drives ratings and
viewership and so on and I guess, that comes
back to the kind of core of discoverability is
how do you get people to notice those new shows. I’ve got a few shows here
that are Family Channel shows that have had some kind of
an international profile. The first one, The Next
Step, which is produced by Temple Street, created
by Frank van Keeken. There’s a number of things about this show and actually, the Shaw
Rocket Fund was instrumental, both in terms of its initial creation and they’ve been a key
funder of it from day one, and that should probably stop
any questions from them on it. (audience laughs) Maybe not. Anyway, The Next Step
launched on Family Channel when the Family Channel
actually had Disney program. And again, this is one
of the other themes, is that in terms of
discoverability there’s nothing like putting a new show next
to a currently performing show in order to get people to pay attention. It’s an old strategy, it’s
worked, it continues to work. The Next Step, first of
all, it’s a great show. It is a little bit
different from the comedies that Disney was making. It was carefully scheduled
and programmed right from the very beginning at Family Channel. But this is and again, obviously, it’s sort of a scripted
faux reality dance show. That’s all right, Agnes? – [Voiceover] Yeah. – Yeah? And it’s proved to be hugely popular. And so, for us, one of
the things about this was then let’s figure out where else and what else we can do with this. Temple Street’s done a good job of getting this placed internationally. It happens to be huge hit
in the U.K. on the BBC. We partnered with Temple
Street to create a live show, so this is completely outside of the social media and digital world. But the other thing, and again, I think from the CMF discoverability essay that came out last week, one of the things they
talk about is marketing and they talk about kind of stunt events and expand that to include live events. One of the things that has happened with The Next Step is
we have got a live tour that started in Canada. It started out relatively small. It grew to the point where last year, it actually did 60,000
admissions across Canada. So basically, live touring show
in theaters targeted really at viewers and kids under
13 years old, 14 years old. That was successful enough
and the show’s been enough of a rating success in the U.K. and Spain that we expanded the live
tour there this year. We had sold out shows
in both of those places. But the interesting thing
for us and this is that, and again, I suppose it’s another one of the themes is you have to be, even if the key platform
is traditional television, you have to be across every
other platform that there is and the live events platform has proven to be a really great adjunct to the promotion of this series. – [Voiceover] I have a question. So when you sell it to a broadcaster, international or worldwide
and they buy the rights to it, you’re monetizing it on a SVOD
or AVOD or YouTube, maybe. Do you hold back the window so
the broadcaster has a chance to monetize it first or how
does that relationship work? Or is that negotiated at the time? – This is an evolving
area of our business. And it used to be that for
some of the SVOD services, they didn’t mind or even
traditional broadcasters, they didn’t mind. Even in the early days of Netflix, we could make a traditional
over the air broadcast sale as well as a Netflix sale in
territory and they didn’t mind. It reminded us, actually,
of window sharing with cable when cable first, when the proliferation of specialty channels came out. But that’s actually evolved now where they want exclusive
windows on both sides. The good news is that that’s
actually driven the price up. So for people selling content, there are better license
fees because of that. People pay for exclusivity. The next show I’m gonna talk about. So this is a show called Hank Zipzer which is a huge hit in the U.K. It’s a show that we produced
with a company called Kindle in the U.K. and distribute worldwide. We’ve put it on the Family Channel before we got rid of the Disney content. And we had it programmed around
some of the Disney comedies and it performed very, very well. Then when we stopped
airing the Disney content, for some reason, the ratings on this show did a bit of a dip. Now they’re coming back up now. Again, this is part of theme. How do you get kids to discover shows? This is a very English show. The kids wear uniforms, they have accent. And of course, we’ve tried to
figure out why does this show, which does very well in other territories, have this kind of lumpy time in Canada, and everybody has a different theory. There’s no real science around it. The real reason I wanted to show it is because it was created, written by a guy who’s actually well-known, dyslexic and the main character, Hank
is dyslexic but very verbal. The creator of it is none
other than Henry Winkler. Now you think Henry Winkler
would be promotable, but it turns out kids have
no sense of nostalgia. (audience laughs) Who knew? Unless they were watching
Arrested Development, which probably not a good idea. So anyway, these are books,
as I said, written by Henry. A huge passion project
and he’ll go anywhere and everywhere to promote the show. And that has worked, I’d
say, very well in the U.K. We haven’t done a lot of
promotion with Henry here, but one way or another, we
also think it’s an audience where that doesn’t really matter. What matters is whether the show is funny and whether they like the kids and so on. So again, hits and misses. This one’s a little bit of a miss. The next show I want to talk about is Gaming Show In My Parents Garage. Our creative executives,
Michael Goldsmith, in particular, at the Family Channel, observed that we kept, that well, what he said is, you
know, we’ve had websites, we thought we had to have
websites to engage kids and for a time, that was true. Every channel had a website. Every channel had a bunch
of different content they put on the website,
games, other activities, bios, lineups, character
descriptions and so on. What we could see is that
the traffic was falling off, so one of the thoughts was
kids, where are they going? They’re looking at games or playing games. Let’s make games and
put them on our website. Of course, it didn’t take us too long to figure out that we’re
never gonna do games that are good enough to compete with where kids are going
for the game experience. So, Michael had a really
simple, but I think smart idea. Why don’t we make a show about gaming? He pitched the idea or discussed it with a great little company
called Banger Media, based here in Toronto who
we’ve worked with before. They came back with an idea that was let’s create a fake YouTube show where three kids literally review games in their parents’ garage, thus the title Gaming
Show In My Parents Garage. And so we cast these
kids, we made a pilot. The pilot was just okay. We showed it to Disney. They said, “This is terrible. “We would never have anything
like this on our network. “Pass, pass, pass” And then we put this on YouTube. And now again, to come back to my theme about how we’re using the different parts of the universe and different platforms. So we put this on YouTube and we had our YouTube group put little tags at the end of some of
our most popular episodes or shows that we thought would appeal to the target audience for this. And it basically is a little
recommendation engine. It says if you like this or
Johnny Test, go watch this. We had within eight or
nine weeks of putting this on YouTube, 2,000,000 views of this pilot. Just raise your hand if you ever heard of a Canadian pilot ever
getting 2,000,000 views ever. I thought so. I thought Doug was raising his hand. (audience laughs) We knew that there was something
that connected with kids and we’d actually gone
ahead, ordered the show, made the show and it was about, I think, six weeks into
the YouTube campaign that the show went on the air. – [Voiceover] Where did it go on the air? – Family. Family Channel, our channel and Chrgd. It has been one of our number
one rated shows ever since and we move it around to
the different channels. It’s got lots of extra content. It’s fun. It’s not that expensive. And it really fits with, I mean, this is the thing about
think about where kids are. Go where they are, make
content that is similar and looks like what
they’re choosing to watch. It seems kind of obvious
when you state it that way. Oh and by the way, Disney bought it. (audience chuckles) Time for a video interlude. I’m gonna show you the opening
title sequence to this, from YouTube, of course. (lively music) – [Voiceover] Hey guys
and welcome to Gaming Show In My Parents’ Garage’s YouTube channel. – [Voiceover] Gaming show. – [Voiceover] Sorry about the (mumbles). – [Voiceover] Gaming Show
In My Parents’ Garage. – I’m Jesse. – I’m Julia. – And I’m Ian. – Come check us out to
see what we’re all about. I mean, we’ve got Let’s Plays. Our newest, coolest game ever. – We like collaborating
with a lot of big YouTubers. There’s a lot of Minecraft. – All the Minecraft. So much Minecraft. We get to see what different
gaming companies are up to. – [Man On Screen] Can you
go get some donuts for us? – [Boy On Screen] Oh, nice. – Goal. – [Man On Right On Screen]
Yes, that was awesome. That’s exactly how you look in the game. – This is happening. (squealing) – You’re Norman North. – That’s what they tell me. – Maybe a bit more slow. You’re Charles Martinet, right? – Yes. – You’re the voice of Mario! – It’s-a me, Mario! Woo-hoo! – [Voiceover] So what’s the
development of (mumbles)? – That’s my coffee. – By the way, it’s still warm. – We’re not gonna lie. Sometimes things around here get pretty, pretty, pretty weird. – Pretty awkward. – It’s good job, pato! – [Voiceover] Jesse, you’re
kind of a weird dude. – I get that a lot. – Are here to interview
us about guacamole? – Si. (guitar strumming) – Watch the game, feel the beat. – I’m feeling it. – [Voiceover] You’re not racing this car. In fact, you can’t even look at this car. Don’t look at it. – [Voiceover] I’m looking.
– [Voiceover] Stop. – [Voiceover] Okay, okay, okay. – You look like the kid
who plays the young me. – That means so much. (laughing) – What video game do you think I’m from? – I’m gonna go with Pong. – Why do you get that sword? It’s on fire. – Amir, would it kill you to bog a shock? – What’d you say about me, Ian? – The first driving game that is in color. – That’s great but I’m
trying to focus right now. – It’s the end of the line, little man. – Stick around and check us out. – [Julia] And we’ll see you guys soon. – See ya! (thrilling music) (playful music) (thrilling music) – Cut our production cost in half. But the other thing that we’re doing is taking, again, legacy brands. And you wouldn’t know this one, but Brum was a television show from the early ’90s, created by Anne Wood, the same woman that created Teletubbies. Very well-known in the U.K.
and what the group did there is they looked and said okay, we’ve got this old brand,
the shows aren’t that great, nobody really wants to watch
and they get some viewership. But then one of the other
things that they realize is that there’s a trend now, you know, about toy unboxing videos. Do you know about car wash videos? Okay, so apparently, kids
love to watch car wash videos and so there are millions
of views, literally, of cars going through a car wash. (audience chuckles) Okay, you learned something here today. Huh? (mumbles) I could be you. Get it up there, monetize it. So one of the things our
crew did is take Brum and do some animation of Brum and it’s the Brum car wash video and within a few weeks
has millions of view. I have the video, I’m
not risking another one. – [Voiceover] We wanna see it. – [Voiceover] We want to see it. – Thank you. Are you ready? That’s good. (cheerful music) That’s Brum’s Car Wash Adventure. It’s not on. – [Voiceover] Is it just that one? – [Voiceover] That was it. – That was it. – [Voiceover] Okay. – Can you go back and do that? – [Voiceover] Sure. (playful music) – Okay, so we’ll just kill that and we’ll move on to the next slide. We’re there anyway, you
can push that one down. Anyway, you get a bit of the idea of the animation, very simple animation. So for us that’s using a
bunch of different things. An old brand, a trend
on YouTube right now, new content and immediately
with millions of views. Okay, so it is true, we
don’t just make kids content. I thought I would talk about Letterkenny. If you’re not familiar with Letterkenny, it is an outrageous comedy. Think trailer park boys
in a small Ontario town. So first of all, our comedy business is another kind of small subset. A few years ago, we invested some money in another incubation project, a small company called New Metric Media, run by Mark Montefiore
and Patrick O’Sullivan. They were focusing on
some new comedy ideas. Jared Keeso, Jared, is from Listowel, Ontario and he and a friend
created a Twitter account that was called List Problems that were about the problems
of their small town. It’s all very funny. And they realized in a
town of 5,000 people, they had 1,500 subscribers pretty quickly. So they took a camera and they went and shot a few episodes
and put them on YouTube. And in a very short time, it had hundreds of thousands of views, and it’s very funny, it’s very dry. And for people who have
ever spent any time in the Ontario countryside,
it’s highly recognizable, so relevant to a lot of people. So Mark partnered with Jared,
created a television show around it and then went out pitching. In the meantime, the YouTube views started to increase dramatically and they had a significant
amount of interest but Bell was interested even
before they started CraveTV. But this turned out to be
the first CraveTV original and we understand that the
show’s done very well for Bell. It continues to get a huge
number of views on YouTube. It is definitely not for children. Go watch it in the
safety of your own home. Bell has just ordered
another season of it. The reason I wanted to talk about this is, of course, comedy is the other thing that knows no bounds when it
comes to these new platforms. And I think Bell, in particular,
has done a spectacular job of managing and promoting this. One of the other things for me is that size really does matter
in terms of being able to promote shows, both
in a particular country, but internationally as well. So Bell basically used
all of its resources, all of its different platforms, Comedy, CTV, Crave, et
cetera to promote this radio. They took advantage of the
fact that it had a huge number of views on YouTube, as well
social media, et cetera. And so it’s apparently
the most watched show on CraveTV these days and certainly, a great
thing as an original. And I think as much as people are looking at Canadian broadcasters and saying so, what are you going to do to reflect Canada to Canadians? And how do you manage and promote it? This show is a little surprise. And certainly, it was a
bit of a surprise for us. In fact, some people in our company are really surprised when they see it because it hasn’t exactly been, you know, our kind of our core focus. But the other thing that Bell did which I think is interesting
in terms of TalkTV and what consumers seem to want is they promoted it heavily
during the Super Bowl. Now next year, I’m wondering, will this be promoted in the Super Bowl or will we just get American commercials? Anyway, we were quite pleased with the way that Bell managed that. And by the way, we’ve done some analysis on the YouTube numbers and the content is 5,000,000
views from the U.S. There’s been no effort yet really to kind of focus on promoting it there. We’re talking to traditional
broadcasters about buying it. And again, that’s one of the tools that it’s already popular. And there are a number of, I guess, we’d call them opinion leaders, Kevin Smith and our old
friend, Hart Hanson, who happens to be Canadian, well-known American showrunner, watching it and tweeting about it and they both have tens
of thousands of followers. So when you start to figure out, you know, how do you build up
critical mass of viewership outside your own territory,
that was a bit of a surprise and that’s something we could
have necessarily targeted. We’re coming up to the end of my session here in a few minutes. So there’s a few things that I just wanna come back to on this. And actually, I wanted to
just go to the CMF document that was produced last week
which I thought was good and I’m looking forward
to the second part of it. But again, they talk about marketing and when it comes down
to this discoverability, a word we didn’t really use
or didn’t know so long ago and is apparently not
really that pronounceable in either official language. So the things from the
CMF study is they talk about marketing and they
have a number of categories that they actually identified. Search and optimization. Okay, again, we all
know about what that is. How it works technically is
a hugely complicated thing. And of course, that
also goes to algorithms. We’ve heard a huge
amount about algorithms, and if you’ve read anything about this, you realize how unbelievably complicated those things are becoming. And this is really about predicting what you would like to watch with some element of randomness put in it. Digital ad campaigns. Digital ad campaigns turned
out to be hugely important in terms of generating audiences. It is one of the things we were doing, for example, with the Gaming Show. We’re actually buying ads on YouTube. Now I was interested in buying
ads on our content on YouTube because we split the
revenue 45/55 with Google and we get 55 cents back on every dollar. Not to make too fine a point on it. Grassroots Campaigns, they mentioned that in their list, targeting
communities of interest. Then they talk about traditional
marketing, prints and ads, and I think there’s a big question about what the effectiveness of that is and how you measure it. Some of these other things
you can actually measure with a much greater degree of precision. And then finally, the one
thing that they didn’t mention, but which in our space
is hugely important is how you relate to YouTube stars and how those people who have become stars on YouTube are migrated
into other kinds of media. So as far as just to kind of wrap this up and then if there’s any other questions, I’m happy to continue. I think my conclusion is
that whatever you’re doing in terms of getting
people to discover things, you have to work across and pretend to understand all platforms. Well, I’m kind of serious because I think there’s lots of people, including marketing professionals, who talk about those things
without really knowing how some of it works. And this is really all about
the newness of this world. And all you have to do
is talk to a 15-year-old and find out what they’re doing on social media to be surprised. For those of you just getting on Facebook, there’s a bulletin, it’s not
really where kids are anymore. And then I think the last
thing and I’ve said it before but I really do think that
vertically integrated companies, and I don’t mean it necessarily in the CRTC definition of VI, but I mean companies that are able to work across multiple platforms. We’re a vertically
integrated company working across every possible kid
platform and opportunity. I think that vertical
integration really does matter in terms of being able to get audiences to find new programming. And that’s all I have to say. (audience applauds) Sure. – [Voiceover] I just have
a quick question for you. So, with all all of these
platforms that YouTube and Netflix became international, do you ever run into
issues with like the tax, credit or funding purposes needing to have a Canadian presence that kind of interferes with what these international companies
want to do in Canada? – So far we have not, but there has been, I think, robust discussion around having, let’s say, non-traditional
platforms trigger tax credits and I guess that’s, CMPA is certainly pushing for that and I think it’ll continue
to be an interesting issue. – [Voiceover] So in that in a
sense with the Family Channel then become like less of a priority, would you say, for the company? – Again, maybe I haven’t stressed that, but we think that traditional broadcasting will continue to be hugely important and even though kids are
watching another platforms and devices, there’s
still massive viewership of traditional broadcast platforms and it remains the most
popular destination and the one that generates the most money to put into new content. Sure. – [Voiceover] Apart from
YouTube, how have programming, be it adult programming,
teen programming or the kids, how have they incorporated
second screen viewing? – Kids? – Any of the shows that you’ve discussed, how have they incorporated
second screen viewing? – Well, I guess, the
research that we’ve seen says that kids are watching multiple devices. And so, you know,
Degrassi has actually been one of the leaders in terms
of second screen programming. So while you’re watching Degrassi, there’s a whole other world you can follow that’s Degrassi related. We’ve done a little bit of that
on some of the other shows, but again, some of this
is really age related. So if we’re targeting
really nine to 14-year-olds, that’s hugely important. It’s much less important
for the younger viewers. Yes. – [Voiceover] Hi there. My company, one of the things
we do, we’re a radio station. We also run a YouTube channel that has around 15,000 subscribers. Just under 3,000,000 views. Been going for about two years. We have about 300 videos. Something you said for the game show was that you added some tags on the end with regards to
recommendation and you kind of like went through that pretty quickly. Can you just elaborate
on that a little bit on how that works? – That would be the part about pretending to know how all these things work. No. So first of all, it’s easy
to do on our own channels. It’s a little harder to
do on all the UGC stuff, but you sound like you
have your own channel. – [Voiceover] Yeah. – So for us, and again, I don’t know how technically they were doing it, but basically they created it
was like our own little banner that just went on the end of, and it happened that Johnny
Test popped up there. So it’s really just a little banner that we stick on the end of our own show. Yeah, exactly, that’s all it is. Yes? – [Voiceover] I just see
some English programmation or maybe Inspector Gadget
be co-produced with France. Is it in French? Do you accept some French series? – Absolutely we do and in fact, we have a preschool channel,
Telemagino, in Quebec as well. (audience member murmurs) Yes, absolutely. 2:39. – [Voiceover] Questions? – [Voiceover] I do have one. (mumbles) If a third party was programming
on one of your channels, so it’s now mixed with your programming, and the sole source of revenue on the YouTube channel is then split. How do you split then between
the third-party provider and you since that you’re now kind of coaliating that channel? – There are many, many channels. But when it comes right down to it, you can tell exactly how many views and what revenue any
particular title is generating, and that’s part of the thing
about our mega database and the YouTube interface. And actually, it’s quite
fascinating to have a look at. For us, it’s searchable. We can have a look at any day
at how many views you’ve had and in fact, even with YouTube
though you can check in on how many views and what kind of revenue your title has generated. That’s all become very user-friendly. I’d be interested to see what Amazon does. And from what I can see, the
music publishing business is actually going the same way.

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