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TFSA Stock Pickers: 1 Entertainment Value Stock to Hold Forever

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WildBrain (TSX:WILD) is a leading independent kids and entertainment company, recognized globally for high-profile properties including Peanuts, Teletubbies, and Inspector Gadget. WildBrain focuses on kid- and family-content and brands, primarily in animation, given the international reach and longer lifespan of this genre and the potential to monetize this content and associated intellectual property (IP) across multiple revenue streams.

Multiple revenue streams

WildBrain monetizes content and IP and generates revenue mainly by distributing shows to broadcasters and streaming services worldwide. Further, the company realizes royalties from consumer products based on WildBrain’s IP and brands. It owns and operates a suite of linear specialty television channels in Canada and represents third-party lifestyle and entertainment brands around the world.

The company’s licensing library comprises of approximately 13,000 half-hours of entertainment content and is one of the world’s most extensive. WildBrain is a premium producer of original animated and live-action series, with the company’s shows being watched in more than 150 countries on over 500 telecasters and streaming services worldwide.

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Licensing products

WildBrain’s Spark subsidiary also offers one of the largest networks of kids’ channels on YouTube and includes WildBrain’s own content as well as representation of third-party IP. The company also operates a family suite of linear specialty channels, which has been a trusted broadcaster for over 25 years. Additionally, WildBrain licenses consumer products and location-based entertainment around the world for the company’s own properties as well for clients and content partners.

Given the company’s assets and capabilities, it is uniquely positioned to monetize content and related IP across the value chain from development to production for viewing on all screens and into consumer products and location-based entertainment and live experiences. The company has three reportable operating segments, which include production and distribution of content business, television broadcasting, and representation of third-party brands.

Production strategy

WildBrain’s production business focuses on programs, primarily animation, targeted at kids and families that appeal to worldwide audiences and have the potential to generate multiple revenue streams. Children’s programming, especially animation, travels across cultures more easily, as it can be more easily dubbed into other languages and can therefore be sold in numerous markets. Animated kids’ programming is particularly attractive due to the potential for longer-term revenue streams, as it tends not to become dated as quickly as other forms of programming and consequently may be resold for viewing by successive generations of children.

Working with international partners, WildBrain develops and produces award-winning original animated and live-action series for audiences from preschoolers to teens based on proprietary IP or as a service studio for third-party titles. WildBrain has also produced numerous live-action comedy and drama series.

Leveraging co-production relationships

Management believes focusing on a targeted audience will contribute to extending the revenue-generating life of these titles, support potential for consumer products opportunities, and increased profit on production. WildBrain pursues this strategy in part by focusing on redevelopment of existing IP for global streaming services. WildBrain also actively pursues co-production relationships to expand output and access to international talent to create worldwide brands of value. These relationships should serve long-term shareholders well.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

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