Chicken Soup for the Soul Entertainment said it had its best financial quarter in history after taking over RedBox.
The company completed its $375 million acquisition of RedBox in August 2022, allowing Chicken Soup to move further into the free ad-supported streaming video space and retain the use of its kiosks as well as its pay-per-view service. Executives say the company, which also owns Crackle and other free ad-supported streaming services, also benefited from having lower-cost offerings in a tough economic environment.
“This has been the best financial quarter in our history, and our position in the free and low-cost streaming ecosystem is stronger than ever after completing the acquisition of Redbox during the quarter,” said William J. Rouhana, Jr., chairman and chief executive officer of Chicken Soup for the Soul Entertainment. “We saw tremendous growth, with revenue increasing 149% and Adjusted EBITDA 97% year over year. Despite a slowing economy, I am optimistic about the days ahead as we continue to serve value-conscious consumers across kiosk, transactional and ad-supported video on demand services.”
Rouhana added that despite the advertising decline seen at linear networks and in other streaming sectors, he said sees more advertising budgets shifting to advertising-supported video streaming, with the last quarter seeing a boost from political advertising, and believes that Chicken Soup will see continued strength heading into the holidays.
Asked about Netflix’s entrance into the space, with the launch of its ad-supported tier, Rouhana affirmed that it would likely bring even more advertisers into the space.
“It just validates, once and for all, that this is it. It is an ad-supported business that we’re all in,” Rouhana said.
On Monday, the company announced Jason Meier, who had been serving as the company’s chief accounting officer since September 2021, as its new chief financial officer, effective Nov. 15.
In the three months ended Sept. 30, 2022, Chicken Soup reported net revenue of $72.4 million, compared to revenue of $29.1 million in the third quarter of 2021, with growth driven by “strong AVOD streaming revenues and TVOD performance.”
One-time transaction expenses related to the acquisition of RedBox led to an operating loss of $42 million for the quarter, compared to an operating loss of $13.2 million a year ago.
In addition to completing its takeover of RedBox, Chicken Soup launched its Crackle and Popcornflix FAST channels launched on FuboTV and reported a 4,000 percent increase in viewed minutes on Chicken Soup for the Soul streaming app from August to September, which the company attributed to its “strong programming slate.”
In October, Chicken Soup announced former Epix executive Phil Oppenheim as its chief content officer.
