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Shout! Factory Launches Ad-Supported Video Service

5 Feb, 2015 By: Erik Gruenwedel

Shout! Factory Feb. 5 joined the growing ecosystem of media companies and distributors going directly to consumers with over-the-top video.

Called “Shout! Factory TV,” the service is ad-supported, thereby negating the requisite monthly subscription common to OTT pioneers Netflix, Amazon Prime and Hulu Plus. Videos stream to a desktop computer, mobile browser or the television via the Shout! Factory TV app found on Roku streaming media devices.

Interestingly, the Shout! Factory TV interface looks similar to Hulu — the latter licensing white label OTT software to third parties.

Shout! Factory TV offers more than 2,500 hours of eclectic and mainstream movies and full-length TV episodes curated from Shout! Factory, Westchester Films, Timeless Media Group, Scream Factory, major studios, independent producers and other sources.

Santa Monica, Calif.-based Shout!, which distributes content on disc and other digital platforms, opted for ad-supported OTT access due to the business model’s greater opportunities, according to Gene Pao, VP of digital.

“The economics of an ad-supported business have improved considerably over the past 10 years as streaming costs have decreased, and ad revenue per-viewing-hour has increased (via higher CPMs and higher ad loads),” Pao said. 

At the same time, Pao said the biggest drawback of SVOD is the cost of subscription management and customer service. At low monthly subscription rates, the share of revenue needed for subscription marketing and customer support results in unattractive margins.

Streaming Fan Base

In the industry crush toward OTT, how does Shout! stand out to consumers in a market dominated by Netflix, Amazon Prime and Hulu Plus? Through brand street cred.

The distributor over the years has generated a reputation for award-winning discs and boxed sets (Halloween: The Complete Collection, The Vincent Price Collection, The Extraordinary Adventures of Adele Blanc-Sec, My Little Pony: Equestria Girls, among others).

Pao said Shout! Factory TV will not only target consumers familiar with Shout! discs, it will use social media to inform them about an out-of-print DVD or titles heretofore never available on disc, but now available digitally.

“For titles that fans have seen over and over, such as ‘Mystery Science Theater 3000,’ we will create programming stunts that can include social interaction so that a fan can have a unique viewing experience despite having seen the episode many times. This is what we have successfully done for two years now with the ‘MST3K Turkey Day’ marathon,” Pao said.

More importantly, as Netflix, Amazon and Hulu focus on hit properties and original programing, Pao said Shout! aspires to circumvent a one-size-fits-all content offering by narrowing in on “heavier” consumers of TV/film/pop culture.

“Our strategy is to activate these fans to watch on Shout! Factory TV,” he said.

Disc/OTT Hybrid Business Model

Despite the hype surrounding OTT video, Pao said Shout! aims to remain true to packaged media for more than nostalgia. As a distributor known for its unique physical reissues, the distributor plans to meld that reputation with a streaming option.

“This is an advantage that pure-play digital streaming services do not have,” Pao said, adding that OTT affords the distributor the ability to bundle digital rights with physical — securing them at more attractive financial terms than a pure-play streaming service. 

In addition, Shout! usually has the masters, metadata and closed-captioning files to a title in-house, which eliminates the costs of encoding, compiling artwork and creating promotional material,” according to Pao. 

“We can create digital programming stunts to promote a DVD/Blu-ray box set release. We also have the benefit to manage a property across all distribution windows, including transactional VOD, EST, SVOD, television, physical and theatrical to maximize it’s total value,” he said.

Shout! Factory TV programming includes: “Mystery Science Theater 3000” (30+ episodes); “Home Movies” animated comedy series; “The Weird Al Show”; “It’s Garry Shandling’s Show”; “Father Knows Best”; “Dennis The Menace;” “The Many Loves of Dobie Gillis”; “The Saint”; “Fridays”; “Gerry Anderson collection” (hand-picked episodes from "Thunderbirds," "Stingray," "Captain Scarlet," "Fireball XL5," "Joe 90" and "Supercar"); “Secret Agent”; “Kevin Smith: Smodimations”; “Steve Martin Stand-Up Show Case” featuring Steve Martin: Comedy is Not Pretty and Steve Martin: Wild and Crazy Guy; Mel Brooks: Make a Noise; “The Ernie Kovacs Show”; Werner Herzog movie collection, featuring 16 acclaimed films and documentaries; Roger Corman’s Cult Classics (select movie titles); The Marx Brother’s A Night in Casablanca; Oscar-winning A Room With a View; "Death of a Salesman" (Golden Globe and Emmy winning film by Volker Schlondorff); Hoop Dreams (a film by Steve James); and award-winning films The Long Voyage Home (John Wayne); The Stunt Man (Peter O’Toole, Steve Railsback, Barbara Hershey); Stagecoach (John Wayne); Bruce Beresford’s Breaker Morant (Jack Thompson); and The Ruling Class (Peter O’Toole), among others.


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