Kew expands focus on IP ownership, subsidiary growth

In the company's quarterly investor call, Kew chair Peter Sussman said the company is also using its scale to increase the speed to market of its products.
November 14, 2018

Eighteen months after Kew Media Group arrived in the Canadian market with the acquisition of five domestic production companies, its executives say a number of its key strategies are coming more clearly into focus. Namely, a shift toward more IP ownership within its portfolio of production assets, and a focus on building out the scope of the individual companies under its umbrella.

The Toronto-based company on Tuesday (Nov. 13) reported that its year-over-year revenues had climbed to CA$52.8 million (US$40 million) in Q3, from $43.3 million a year ago. Within that, Kew reported $35.8 million in quarterly production revenue, with the remaining $17 million on the distribution side of its business. Meanwhile Kew posted $18.2 million in gross profits for the quarter, up from $11.7 million last year.

Last month marked a first for Kew as subsidiary Our House Media brokered an acquisition deal of its own, taking an undisclosed stake in unscripted production company 4East Media with Kew holding a minority stake.

On an investor call on Wednesday, Kew CEO Steven Silver said the move is part of the company’s strategy to allow its production subsidiaries to fuel their own growth. “The plan is to do more of this so the companies in the Kew family can also grow through M&A and spread their management skills across a larger platform,” he said.

Kew execs also expanded upon the company’s ongoing shift toward owning more of its own IP, and the resulting move away from service-production gigs.

“You have a lot of companies in the Kew family that historically produced for fees, and not for ownership, or didn’t produce enough of that. What we’ve been doing is socializing and moving the business toward greater ownership of content versus producing for fees,” said co-founder and chairman Peter Sussman.

Bristow Global’s Haunted Hospitals and Frantic Films’ In Plain Sight were among a number of Kew produced-and-distributed shows highlighted during its Q3 financial report.

CFO Geoff Webb added that, across Kew’s production and distribution infrastructure, the company is continuing to look for opportunities to execute on its strategy to greenlight projects without the involvement of international broadcast entities.

“This includes collaborating across our production and distribution divisions to greenlight shows that do not rely on a single large broadcast commission, but can be greenlit by the distribution team in the knowledge that they can successfully place the product around the world,” said Webb.

“These types of products are typically cheaper to manufacture, they remove much of the production bureaucracy, and consequently they have much higher margins,” noted Webb. “Additionally, when the shows are sold, you get the additional synergy of keeping all fees within the group for both production and distribution.”

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