Chicken Soup for the Soul Entertainment, the ‘positive content’ company backed by Ashton Kutcher’s A Plus, has entered a definitive agreement to acquire Pivotshare, a global subscription-based video-on-demand service.
The service generates approximately US$2.5 million (€2.2 million) in annual revenue and has 25,000 paid subscribers, according to the company. It charges US$9 a month.
CSSE used perpetual preferred stock to complete the acquisition. It has paid US$4.35 million in a cash-and-stock deal. It will be the company’s first move into SVOD.
“This accretive acquisition of Pivotshare launches us into the subscription VOD space, significantly accelerating our business plan,” said William J. Rouhana, Jr., chairman and CEO. “This multi-channel online network comes with pre-existing content, much of which fits with the Chicken Soup for the Soul brand.”
Scott W. Seaton, vice chairman of CSSE, said: “Pivotshare is expected to generate approximately US$1 million per year in cost savings for CSS Entertainment, which is a 23% return on our investment annually.”
Speaking to analysts following CSSE’s quarterly results, Rouhana said that acquiring Pivotshare should secure the company’s presence in the SVOD market “earlier than we had projected”, enabling the company to deploy its content as SVOD “quickly and at little or no additional cost”.
Rouhana said that CSSE would start to roll out its own networks on the Pivotshare platform, which will serve as a single platform for subscription and advertising-supported VOD, between now and the end of the year.
He said that the acquisition, which currently provides a platform for third-party content, would enable CSSE to build relationships with other producers and “give us a chance to work with them on their content”.