Corus snaps up Disney content from DHX Media
TORONTO Corus Entertainment Inc. is snatching coveted kids-programming rights from rival DHX Media Ltd. in a “landmark” licensing agreement with a subsidiary of The Walt Disney Co. that will see Disney Channel launch in Canada later this year.
That will be just in time to win viewers’ loyalty amid sweeping regulatory changes that will put more power in the audiences’ hands than ever before.
Set to debut Sept. 1, the Corus operated Disney Channel will air shows such as Liv and Maddie, and Girl Meets World, adding to a suite of children’s properties including YTV, Treehouse TV, Cartoon Network and ABC Spark. This news was preceded by Halifax, N.S.-based DHX Media’s decision, made public Wednesday night after the stock market closed, to rebrand three of its family stations with ties to Disney.
Corus spokesperson Sally Tindal said she was “not able to disclose the terms of the agreement,” including its length or licensing fee. Disney/ABC Home Entertainment and Television Distribution spokesperson Kim Harbin did not elaborate on the release. DHX Media spokesperson Shaun Smith also declined to comment further other than to say, “As you can imagine, it is an exciting and busy day for us with our rebranding news.”
Investors looked past the buzz and responded forcefully to DHX Media’s decision not to renew its contract with Disney, which is in effect until January 2016. Shares of DHX Media declined 7.5 per cent Thursday, to $7.90. Conversely, shares of Corus had a modest gain of three per cent, to $17.58.
“There is no doubt that, in the family content arena, it’s a big deal to be associated with the Disney brand,” said Charles Falzon, chair of RTA School of Media at Ryerson University, who has been involved in kids’ TV for the past 25 years in multiple countries and produced properties such as Thomas the Tank Engine and Guinness World Records.
“In a world where there is a tonnage of content being thrown at us, the value of brands that already have a seal of approval at home is very important.”
Analysts at RBC Capital Markets estimate DHX Media’s Family Channel paid an estimated $30 million annually to rent content from Disney, they wrote in a research report published Thursday.
Now that it has off-loaded this cost, the company can pursue higher-margin original shows or enter into deals with smaller independent suppliers — and realize only a “modest” impact on revenue.
In contrast, RBC analysts said, Corus’s new deal, which likely saw it “pay a premium,” is “not without risk” since monetizing content “can be challenging” as the country’s new pick-and-pay pricing model looms.