HALIFAX – While the company continues to invest in a growing media segment, kids content, broadcaster and producer DHX Media saw revenue declines in its fiscal second quarter, ended December 31, 2016.
Q2 2017 revenue of $78.9 million was down 3% compared to Q2 2016, due largely to expected declines in quarterly targets, reads the company’s press release. Besides its production, DHX also owns Family Channel, Family Junior, Telemagino and Family CHRGD.
“At quarter-end, we had invested $31.4 million in ongoing proprietary production, resulting in a robust pipeline with the majority of these productions expected to be delivered in the remainder of Fiscal 2017 and into early Fiscal 2018,” added the release.
The company did see a bump up in its content business as revenue rose 10% to $48.4 million from its proprietary content derived from production, distribution and consumer products-owned as an integrated group compared with Q2 2016.
DHX’s expanded focus on ad-based video-on-demand (AVOD) is also bearing results, as evidenced by a 78% rise in WildBrain revenue to $9.4 million over Q2 2016.
Broadcasting revenues dropped 18% however, compared to last year’s Q2, to $15.39 million. “The decline in the subscriber revenues was expected and has been driven by the negotiated lower rates resulting from the Company's strategic decision to focus the majority of the TV slate on our own proprietary content,” reads the release. “The decline was also driven by lower than expected promotion and advertising revenue as the Company has just been begun to step up its efforts in this regard after recently getting approval from the CRTC to allow broadcast advertising for the Family Channel. Approximately 88% or $13.53 million of the television revenues were subscriber revenues, while advertising, promotion, and digital revenues accounted for a combined 12% or $1.87 million of the total television revenues.”
Overall, “adjusted EBITDA of $24 million was in line with Management's expectation for Q2 2017 while net income of $5.8 million was impacted by a foreign exchange loss versus a significant foreign exchange gain in Q2 2016,” says the release.
The company also announced today the signing of another large content deal with Amazon Prime Video, which sees the SVOD provider picking up more than three dozen DHX shows for its new service in India.
"We continue to deliver on our strategic priorities of creating engaging kids' content that sells globally, and driving sales growth in our branded consumer products business," said Dana Landry, CEO of DHX Media in the press release. "We are seeing strong demand for our kids' titles across all media platforms, as well as new opportunities to unlock incremental value in our library. Q2 revenue from our core proprietary content business was up 10% from a year ago, and we're achieving double-digit growth in our WildBrain online kids' network. We believe an equally significant opportunity lies ahead for consumers to click and buy their favourite characters while viewing our content."
