Chicken Soup for the Soul CRO dishes on return of theatrical releases, new DOOH business

One thing Chicken Soup for the Soul Entertainment (CSSE) is excited about for 2023, according to Chief Revenue Officer Philippe Guelton, is the return of new theatrical releases. While that’s in no small part due to CSSE’s acquisition of DVD rental company Redbox last year, new movies are also a great driver for the rest of the company and to some extent “dictates the entire strategy of the business,” Guelton told Fierce during the NAB Show in Las Vegas this week.

Guelton noted that as theatrical releases were put on hold during the height of the Covid pandemic it really impacted the RedBox business, which is in part why it was able to get the price that it did (around $375 million in an all-stock deal that included the assumption of $321 million in Redbox debt).

“We’re seeing studios, after retrenching during Covid and putting their original programming directly on their SVOD, they’re coming back to the home entertainment business and wanting to reinstate those windows,” Guelton told  Fierce. “And so that’s critical to us.”

For example, he noted that right now “Avatar: The Way of Water”” is available for rent on Redbox, even though Disney-owned title hasn’t made its way to Disney+ streaming service yet.

The return of windowing for film releases clearly helps fuel the DVD rental business at thousands of kiosks across the country, but also its TVOD (transactional video on-demand), “which is also fast growing,” he said. CSSE earlier this month recorded its largest TVOD revenue week in the company’s history on the Redbox streaming platform, with the premium release of the latest Avatar film and “Creed III” premiere, alongside the simultaneous release of “Plane” at the kiosks and on VOD. New release rental titles on Redbox kiosks also grew 102% for a rolling three-month period thanks to consistent new movie additions. The company expects continued momentum with major releases this year such as “John Wick: Chapter 4,” “Guardians of the Galaxy Volume 3,” “Fast X,” and “The Little Mermaid,” among many others.

However, importantly, new movies returning on a regular basis also bodes well for CSSE streaming services, as DVD rentals and TVOD “are drivers for our audience on our O&O [owned and operated] apps,” Guelton noted.  

Outside of the DVD rental kiosks, CSSE has a portfolio of assets including its three flagship AVOD streaming services – Redbox, Crackle and Chicken Soup for the Soul. It also has the RedBox Free Live TV FAST that offers both free linear streaming channels and TVOD.  

“If people are coming to rent movies, they’re going to start watching more of our AVOD content, they’re going to discover we have a FAST platform with 160 channels,” Guelton said. “So this is a really great driver for almost the entire business.”  

Entering the DOOH business

A second priority teed up for CSSE in 2023 is its advertising platform Crackle Connex (which recently announced Vidgo as a customer, more on that later) and entering into a new business segment altogether.

“Connex really symbolizes…the combination of the Redbox and Crackle business together and the fact that we’re expanding into new directions,” he said.

As for new business avenues, CSSE is now getting into the digital out of home advertising business, installing big, high-definition screens atop some of its Redbox kiosks distributed at retailers across the country. Guelton clarified that these aren’t the screens people interact with to rent DVDs, but digital advertising for branded content and ads, where Connex comes into play.

“This is a brand-new business for us…basically going into the digital out-of-home advertising business” he said, noting an expansion beyond CTV and in-home entertainment. “We have our own screens, with about 3,000 installed, we have more coming.”

In total RedBox has a network of approximately 34,000 DVD kiosks across the country, including grocery and retail, with 90% of Americans within 5 minutes of a DVD rental point. Separately, just this week CSSE disclosed its Redbox footprint will grow further, announcing a deal for 1,500 new kiosks at Dollar General over two years, for a total of 5,000 at the retailer by the end of 2024.

Guelton described that CSSE is also expanding the DOOH footprint with partnerships at retail to allow it to leverage screens others have deployed and build an ad model around it .For example, one partner is Velocity, which has screens in theater and hotel lobbies, while another, undisclosed partner, has screens in bars and restaurants.

Outside of the displays on DVD rental kiosks, he explained that CCSE won’t be installing those screens itself (such as in bars and restaurants, etc.) but the partner approach provides a broad scale for advertising.

“It’s going to drive a huge amount of screens available to our sales team to basically reach consumers at, in most cases, a point of purchase, or in bars and restaurants,” Guelton said.  

Expanding ad rep sales 

Another focus in 2023 is building out its ad rep business, which outside of the digital screen side just mentioned, CSSE is already actively participating in within the CTV space, counting 19 partners for which it’s selling ads.

He noted that these partners might sell ads on their own programmatically but don’t have a direct sales team, and in other cases CSSE will be the exclusive sales partner. Back to Vidgo, Guelton said while the vMPVD has been around, it’s looking to grow, particularly around sports, and CSSE is taking over 100% of its sales and operations, basically becoming its sales arm. This is a function it’s already taken on for other brands like anime services Crunchyroll and Funimation.

“The key is together, we have a lot more scale,” he said. There’s about 60 million monthly active users across the company’s owned-and-operated platforms and “a minimum of 20 million additional on our ad rep partners.”  

A third priority for CSSE this year is margin and “making sure we are making money as a company and being as efficient as possible as we integrate the two companies,” Guelton said.

So far they’ve been able to do so without any restructuring in terms of people, he noted, but called out certain elements, such moving to the same platforms and making its sale process more seamless, for example, across Redbox, Crackle and Chicken Soup for the Soul.