July 21, 2022
William J. Rouhana Jr. is chairman and CEO of Chicken Soup for the Soul Entertainment and has been CEO since April 2008. A leader in the media, entertainment and communications industries for more than 35 years, he was the founder and CEO of Winstar Communications, a wireless broadband pioneer, and Winstar New Media, one of the earliest online content companies, from 1993 until 2001. During his career Rouhana has led the acquisition of numerous media companies including Virgin Vision, a Virgin Group worldwide film distribution venture, in the 1980s. As an entertainment and finance lawyer from 1977 to 1985, he developed new film financing models for major producers such as Blake Edwards. He is a founder of The Humpty Dumpty Institute, which created the International Film Exchange, and the co-chairman of the Global Creative Forum, which connects the United Nations with major film and television executives, producers and talent.
In May, Chicken Soup for the Soul Entertainment announced it would acquire Redbox Entertainment, operator of more than 38,000 DVD rental kiosks and branded digital entertainment properties. The announcement came on the heels of the March announcement of an agreement to acquire the assets of 1091 Media, comprising its distribution business known as 1091 Pictures.
Media Play News asked the long-time executive what he plans with the acquisitions and about the long-term strategy of his company.
MPN: What is your grand vision for Chicken Soup for the Soul?
Rouhana: We, Chicken Soup for the Soul Entertainment, are building the best AVOD and bringing great content to everyone at no cost at all. We are increasing our high-quality original and exclusive content, expanding our reach, and driving ad sales through our new tech platform and ad formats.
If we execute on all these initiatives, we should be able to drive significant shareholder and consumer value en route to building the best AVOD.
MPN: What are the entertainment properties/services under the banner and how do they integrate?
Rouhana: We have three key AVOD streaming services within Crackle Plus — which has 40M+ MAUs:
- Crackle — a top AVOD network — a leading, free-to-use video entertainment streaming service featuring full length movies and TV shows including original and exclusive content;
- Popcornflix — created for viewers who want to watch action, adventure and heart-pounding moments from full-length movies, compelling documentaries, foreign films and unique original web series; and
- Chicken Soup for the Soul — our newest streaming service, which includes entertaining, inspiring, uplifting, and informative content with a large selection of movies as well as TV series covering food, home, travel and more.
We also have global content acquisition and distribution capabilities through our Screen Media division and production capabilities for a variety of original long- and short-form scripted and unscripted content through our Chicken Soup for the Soul Television Group with multiple studios. In addition, we have one of the largest independent film and TV series libraries to feed our streaming services.
MPN: How does Chicken Soup compete against the major streaming services and what services do you see as your major competitors?
Rouhana: Anywhere that consumers go to watch great content can be viewed as a competitor in the streaming business. However, Chicken Soup for the Soul Entertainment is primarily focused on providing value-conscious consumers original and exclusive content that they can’t find elsewhere. Recently, our Screen Media team secured a deal with BBC for “Sherlock” and 2,500 additional hours of content exclusively on our Crackle Plus streaming services.
We view our major competitors in the AVOD space as services owned by Fox, Paramount and Amazon.
All this comes back to compelling content (and original content at that). People don’t think they’re going to get great original content on a free streaming service, so we’re something new for them.
MPN: How long do you think this explosion of ad-supported streaming content will last?
Rouhana: There are several industry themes that that we believe will only continue going forward:
- The rate at which consumers have shifted to AVOD — while that was accelerated by COVID — has continued as many more consumers are aware of quality free streaming options, like ours.
- There is great, award-winning content available on streaming services, including ours.
- The rise of AVOD across the streaming industry is driving media to increase spending on AVOD. Not only do we have a four-year head start on newer network owners, we also are free from legacy thinking — for us it’s not a strategy to compensate for cord-cutting; it’s a growth business.
MPN: Crackle Plus had a big hit in 2019 with original series ‘Going From Broke,’ the Ashton Kutcher-produced series about helping young adults get out of debt, which generated more than 5 million views in its first 10 days, prompting a sequel. How important is exclusive content to your business?
Rouhana: Our original and exclusive (O&E) content is a priority and a key differentiator. We have made a lot of progress over the past year, as our O&E as a percentage of total streaming hours is now up to 27% as of Q1. We want to continue to move that number up over time and believe it’s a good indicator of our differentiated programming strategy.
The key driver of this viewership is the quality of the O&E programming. We are putting compelling and high-quality content on our streaming services as we have had an impressive number of hit TV shows and movies recently, including but not limited to “Going From Broke.”
Importantly for the business and our investors, we have a good track record of acquiring and producing content economically by using co-production deals and partnerships.
Beyond new releases, we’re also significantly growing our IP library rights, which drives higher margins over time, in part due to the absence of royalties. We also typically see higher CPMs on our original content than licensed content.
We have a really exciting pipeline with new content rolling out at a higher rate than ever.
MPN: What prompted the Redbox acquisition, and what kind of integration are you looking at? Who will direct its digital services?
Rouhana: The combination of Redbox and Chicken Soup for the Soul Entertainment is a perfect fit — one that allows us to build a full streaming solution faster than either of us would have been able to do individually. Rather than Chicken Soup for the Soul Entertainment having to build our own TVOD, PVOD and FAST platforms, and Redbox having to build their own AVOD, we can utilize the products we’ve each developed to improve our offerings. This will save both companies valuable time and money as we build out a full streaming solution.
MPN: What will be the fate of the Redbox kiosks?
Rouhana: Those beloved Redbox kiosks are not going anywhere. They serve as a convenient and valuable source of entertainment for value-conscious consumers, providing the company with an important source of cash flow and customer engagement. The Redbox kiosks also represent a new distribution opportunity for our original films, further supporting acquisition synergies. As viewers return to theaters, the increase in new movie releases will also benefit the kiosks.
MPN: You’ve made some other acquisitions and licensing deals recently, such as the BBC Studios and Kin licensing deals and the 1091 Pictures acquisition. What’s the company’s driving strategy in making such deals?
Rouhana: A key initiative for us is building our film and television library by obtaining content economically and through our production and acquisition capabilities. Key drivers of this strategy include:
- Using co-production deals and partnerships to produce cost-effective original content;
- Increasing IP library rights ownership to drive higher margins over time;
- Increasing CPMs on our original content rather than on our licensed content; and
- Supporting our original and exclusive content strategy to enhance margins over time.
MPN: Tell us a little about your own history and your history with the company.
Rouhana: Since acquiring the company in 2008, we have created our Entertainment division and become an innovative leader in the AVOD space, assembling a large film and TV rights library and building viewership of our streaming services, including Crackle, Popcornflix and the recently launched namesake Chicken Soup for the Soul. Prior to Chicken Soup for the Soul, I began my career as an entertainment and finance lawyer, after which I founded a merchant bank as an entertainment financier and founded Winstar Communications — a wireless broadband pioneer.
My experience provides the company with a long-term perspective on media trends, and the importance of streaming to the future. We hope to help the industry realize the opportunity to serve consumers by building the best AVOD streaming services.