Fresh off a rebrand, VA Media is mulling moves to capitalize on the success of its long-form YouTube channels and leverage insights for an expansion into free ad-supported streaming TV (FAST) on broader AVOD platforms.
Formerly ValleyArm Media, the Australia-based company recently rebranded to VA Media – signaling its shift from what historically was known as multi-channel network publisher on YouTube to more of a media company since building out its owned and operated brands, according to CEO Mark Ashbridge.
In addition to its YouTube network platform, VA Media has a services business where it helps clients create their own respective channels and to license and monetize content. For example, the company previously ran the Cartoon Network YouTube channels. The services' arm is mainly on YouTube but also Facebook, TikTok “and anywhere we can imbibe opportunities for social video monetization,” said Ashbridge.
Last month the company signed new deals with Cinedigm and Revry, taking a two-pronged approach with agreements that involve both services and content licensing.
VA Media will manage Cinedigm’s suite of YouTube channels globally, while also licensing content from Cinedigm for its own YouTube movie channels. For Revry, the company will help the global LGBTQ-first streaming service enhance engagement and grow audience share on its YouTube channel and Facebook Watch page, while also licensing content for VA Media’s Pride Central brand.
However, owned and operated channel brands make up the bulk of the business and that model has “ignited the growth of VA Media,” Ashbridge told Fierce Video. In the coming financial year, owned and operated content channels will account for 68% of the business, he said.
Success with long-form content on YouTube and a growing AVOD ecosystem means VA Media is now turning attention to platforms more typically known in the AVOD space, as it uses data and insights on audience appetite garnered from its own and client YouTube channels.
“We’re starting to consider opportunities in the broader AVOD landscape,” Ashbridge said. “I think what we can do through our YouTube audience is we can understand what niches might be working in which markets because we have real-time data at our hands.”
While YouTube often lends itself to short-form video content, VA Media’s YouTube network has about 15.1 million subscribers, a figure Ashbridge said is growing day by day and year on year, alongside company revenue growth of about 35% year on year. Its network clocks around 25 million watch hours per month and 80 million views per month on YouTube.
Movie Central, YouTube’s largest movie channels with 3.25 million subscribers alone, is among VA Media owned and operated brands along with several genre-specific channels for around nine in total. Other movie channels focus on sci-fi, family, horror, western and world movie genres, with three unscripted channels focused on documentary, true crime and LGBTQ programming.
To license independent films to publish on its long-form YouTube channels, VA Media works with media and distribution companies including Sonar Entertainment, StudioCanal, All3Media, Vision Films, The Asylum, Distribution Solutions and Indie Rights.
Meanwhile, partnerships with the likes of Cinedigm are beneficial on two fronts, as it works with the client on a services model, but also licenses content to put on VA Media’s owned YouTube channels – mostly the movie-centric ones.
On the licensing front, deals usually start with a set number of titles from partners and grow from there.
“Generally what happens is the relationship seems to work so well that we end up coming back to them and getting a second, third, fourth batch of titles,” Ashbridge said. “So the actual catalog is now expanding from all of our key partners.”
As for Revry, in addition to licensing and services, the partnership has opened an opportunity for both companies to work together on creating original content focused on the LGBTQIA+ community – initially starting with unscripted and YouTube formats.
“We’re a YouTube first company and now we’re looking at expanding into FASTs and Revry’s the other way around,” Ashbridge noted. “They launched on global AVOD platforms and now they want a presence on YouTube, so we’re kind of helping each other.”
In a statement Ashbridge noted that SVOD is seen by many as the holy grail, but a solid AVOD strategy can deliver huge results.
“Our clients often tell us that the monthly AVOD revenue our network generates is consistently in their top three platforms, rivalling the likes of Roku and Tubi,” he stated.
But FAST services like The Roku Channel and Fox’s Tubi are where VA Media is looking next.
Expanding into FASTs
VA Media is currently working through how it will expand to FAST channels on AVOD platforms and Ashbridge said it’s too premature to announce what companies it’s been talking to.
However, he did acknowledge VA Media is “working through one of the large-scale AVOD providers.”
That global network of both owned and operated, as well as client channels gives the company insights “into where we could potentially launch or broaden our AVOD strategy into other platforms like Tubi and Roku and all of the [smart TV] OEMs like the Hisenses and the LGs and Samsungs.”
The larger AVOD market continues to grow, with eMarketer forecasting the number of U.S. AVOD viewers to rise 8.6% year over year to over 140 million in 2022 (for platforms like Peacock, Pluto TV, Tubi etc, and excluding YouTube, Twitch and other user-generated content channels). By the end of the year the report expects U.S. AVOD users will make up 58.2% of all OTT video services.
Aside from completely free streaming options, major SVOD players Netflix and Disney+ plan to introduce lower-cost ad-supported on-demand tiers this year.
The driver for a push into FASTs is about understanding where a niche genre might work in a high ad-revenue market, Ashbridge noted with the U.S. clearly being one.
He said 65% of VA Media’s monetization revenue on YouTube channels comes from the U.S., against just 32% of views coming out of the market – reflecting the strong U.S. ad market on YouTube. The company also is starting to see some other good markets emerge from a monetization perspective, with Ashbridge citing high single-digit growth on advertising in France, Germany, Brazil and Canada.
For a company the size of VA Media, compelling niche genres is something it works hard to find, he said. Typically that means looking to understand “where there’s a high volume of interest and perhaps low competition” – or what he referred to as a white space opportunity.
Asked about the kind of insights the company’s gleaned from YouTube, he called out Australian true crime as having success in the U.S., as well as action movies.
“We figured out Australian crime works really well in the U.S., just off our platform, so now we’re kind of zeroing in on maximizing that opportunity on more AVOD platforms than just YouTube,” Ashbridge commented, categorizing the move to FASTs as a natural extension.
Thanks to YouTube, proprietary tech and expertise in digital data, VA Media can understand audiences geographically, as well as what genres and types of content they like.
“We know that crime works globally and we’re doing very strongly,” he continued, pointing to its True Crime Central channel on YouTube, along with a large library of licensed content globally.
“We can see pockets around the world where we know crime will work, and obviously we talk with some of the FAST platforms and that really starts to influence our decision into how we might extend one of our YouTube brands into the broader AVOD landscape,” he added.
Alongside the growth of AVOD, VA Media is also seeing competition heat up for AVOD rights globally.
“AVOD was traditionally a non-exclusive right in the streaming world and in some ways it still is, but we’re certainly seeing different types of deals out there being done now which is interesting,” Ashbridge noted.
As VA Media navigates the changing landscape it’s looking at appropriating and increasing licensing budgets according to the types of content it wants for owned and operated YouTube channels and further afield, he said.
One key factor for driving growth on its networks is improving quality of the content it’s licensing for the platform, “so naturally they go hand-in-hand,” Ashbridge said of increasing budgets.