WildBrain's latest earnings call, covering the third quarter of fiscal year 2024, paints a familiar picture: the content production business is experiencing difficulties due to the industry-wide slowdown. However, the company anticipates a robust recovery in fiscal years 2025 and 2026, a view shared by other analysts. Interestingly, there's a subtle yet potentially significant change in WildBrain's rhetoric concerning its YouTube strategy, particularly in how the company plans to leverage YouTube Shorts. This subtle shift could signal a revolution in the making.

WildBrain manages a staggering network of over 500 YouTube channels, commanding a massive kids' audience. In previous calls, the company's focus was on "increasing the quality of owned and partner content" while "pruning and cutting back on lower-quality views." This strategic move towards high-quality, long-form content aimed to optimize ad revenue per video.

However, the Q3 2024 transcript introduces a noteworthy change in emphasis: "YouTube Shorts continues to be a key engagement tool to attract viewers to our vast network. We are continuing to learn and refine this new lever for audience acquisition to meet audiences where they are. During the quarter, we saw significant increases in watch time in YouTube Shorts."

This shift from solely prioritizing long-form content to actively embracing Shorts as an "audience acquisition" tool hints at a fundamental change in WildBrain's YouTube strategy. It suggests a recognition that YouTube Shorts, with its short-form, highly engaging format, holds the potential to drive viewership across their entire network. This could translate into a boost not just for Shorts watch time, but also for the consumption of their long-form content.

"This strategic realignment could be a game-changer. WildBrain already holds a significant edge in the kids' entertainment arena with its "omni-platform" expertise. The company operates across YouTube, SVOD services, FAST, non-YouTube AVOD, and even gaming platforms like Roblox. If WildBrain successfully leverages Shorts for audience acquisition, effectively guiding viewers from the world of short-form content to their broader library of long-form shows and franchises, it could unlock a substantial surge in viewership and revenue."

Imagine a young viewer, completely engrossed by a 30-second Teletubbies clip on Shorts, then seamlessly directed to a full episode on WildBrain's dedicated YouTube channel. This could ultimately lead to further engagement with the Teletubbies brand through merchandise, licensing, and other avenues. This exemplifies the power of a strategically interconnected approach to short-form and long-form content.

WildBrain's YouTube Watch Time Growth

The chart below illustrates WildBrain's significant year-over-year growth in YouTube watch time, as highlighted in their Q3 2024 earnings call.

Although the Q3 transcript doesn't offer specific figures or concrete plans, the shift in language is telling. It aligns with YouTube's own efforts to promote Shorts creation and integrate it more seamlessly into the platform's overall user experience. WildBrain, already a dominant player on YouTube, is in a prime position to capitalize on this evolving trend.

A Hypothesis Worth Exploring

Let's hypothesize: If WildBrain, by strategically employing Shorts, increases the average view duration on its long-form YouTube content by an additional 10%, building on the impressive 40% year-over-year growth reported in Q2 2024, combined with the ongoing expansion of their FAST and non-YouTube AVOD channels, this could potentially lead to an extra 15% to 20% revenue growth in audience engagement for fiscal year 2025.

This, of course, is just a hypothetical scenario. However, WildBrain's nuanced shift in language regarding YouTube Shorts, coupled with the enormous potential of the short-form format, suggests a significant opportunity that could fundamentally reshape the company's trajectory.

"**Fun Fact:** WildBrain owns the rights to an impressive array of iconic children's brands that have spanned generations, from the nostalgic charm of Strawberry Shortcake to the globally recognized Teletubbies. The company's library is a treasure trove of childhood memories, and their strategic efforts to revitalize these brands for contemporary audiences through innovative digital strategies are definitely worth watching."