Entertainment One eyes large profit boost from China
China presents a significant opportunity for media group Entertainment One (ETO), according to chief executive Darren Throop. He tells Shares the country could be ‘as big as the US from a consumer standpoint’ in the future, meaning significant potential to earn large amounts of money from broadcasting and merchandise.
Broadcast and licencing revenue from its Family and Brands division – which includes Peppa Pig and PJ Masks children’s cartoons – increased by 144% in the past financial year, partially down to strong demand from China.
‘We’ve got new buyers of content including people in the Chinese marketplace, as well as ongoing demand from incumbents Netflix and Amazon. Our income is going up because if a streaming platform wants to hold on to subscriber numbers, they need to pay for high quality content,’ explains Throop.
The company will increase the division’s investment in productions from £6.4m in the past financial year to £10m this year. Having more content increases Entertainment One’s chances to benefit both from selling the broadcast rights and also from toys, clothes and other related merchandise.
A new pre-school brand will be launched on Chinese streaming platforms in the summer called Ricky Zoom, followed by a launch on global broadcast networks later in the year with toys coming next summer.
The past few years have seen the company dramatically reduce investment in third party material, preferring to focus on developing its own content. This trend will continue – for example, television production investment will increase by nearly two thirds this year to £350m.