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Peanuts Deal for Apple Streaming Service ‘Doubled’ Brand’s Value, DHX Says

05-02-2019

Peanuts Worldwide’s content deal for Apple’s new streaming service “doubled” the brand’s value, with licensing and consumer products among the major beneficiaries, DHX VP David Regan said today at the ThinkEquity investor conference in New York.

Under the agreement, DHX will work with Apple to produce new Peanuts series and specials for a service that is expected to launch later this year. DHX acquired a majority stake in Peanuts Worldwide, along with Strawberry Shortcake, from Iconix Brand Group in 2017 for $345 million.

The Apple agreement is “going to give that brand incredible exposure and that is great and we will do well off the production in our studio. But it is licensing and merchandising downstream that will benefit most and is the highest margin business,” Regan said. Peanuts has 1,100 licensees and while it has strong presence in the U.S. and Japan, it is “under-penetrated” in other regions of the world, Regan said.

The new Peanuts content, along new Strawberry Shortcake programming for which DHX is seeking a “premier partner,” is part of the company’s shift to being a “royalty collection and brand management” company within five years that “leverages production to grow brands,” Regan said. DHX also expects to be able to double the value of Strawberry Shortcake IP.

As part of the new strategy, DHX is shifting its focus toward striking deals for “premium” streaming content (with a $1 million production cost for a 30-minute episode) and away from “mid-market” ($350,000 per episode cost) cable TV shows, Regan said.

With larger production budgets, DHX can hire “better creative” and develop content “that has more chance of resonating with kids and therefore a greater chance of developing large merchandising and licensing streams afterwards,” Regan said.

DHX retains content rights, which helps to build a program library that can be continually leveraged for new programing and merchandise, said Regan, noting DHX’s ownership of Mega Man, Inspector Gadget, Teletubbies and others.

Contact:

DHX Media, David Regan, EVP Strategy and Corporate Development, 902-423-0260, David.regan@dhxmedia.com

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