Shout! Factory's brand has always focused firmly on the past: DVD sets of classic TV series ranging from The Phil Silvers Show to Pee-wee's Playhouse. But the company itself has kept an eye on the future, and with industry-wide DVD sales in decline, today it's launching Shout! Factory TV, a multi-platform streaming channel stocked with golden oldies to be viewed on modern media.
“We've been working on this strategy for years,” says company co-founder Garson Foos, explaining that the onslaught of digital product available on Amazon, Hulu, Netflix, and YouTube made the move inevitable.
Classic TV, Foos says, will be its “sweet spot,” differentiating Shout! Factory from the current slate of streaming networks. “Netflix does not have much, so there's a hole in the market,” Foos says. Starting today, its site will offer 1,000 hours of programming, including series like Hill Street Blues, Father Knows Best, and The Twilight Zone, and movies from John Ford's Stagecoach to Roger Corman's Candy Stripe Nurses.
Shout! Factory vice-president of digital Gene Pao says they examined both subscription and free models and ultimately decided on the free, ad-supported network, adding that other companies “are overestimating the willingness of consumers to pay for things online,” and that advertising revenue on free networks is improving in the digital world.
He points to the old sketch-comedy show Fridays as the “poster child” for their strategy, saying sales showed Shout! Factory consumers were reluctant to shell out $30 for an offbeat and erratic series. Unsurprisingly, “if you tell people they can watch old sketches starring Michael Richards and Larry David online for free, they are going to check it out,” he said.
Currently, its products are available freely on desktop, and on mobile through a web browser. It has an app on Roku that allows you to watch one show at a time for 99 cents each. Gradually, the company plans to roll out a mobile app and make its offerings available through Amazon Fire and Chromecast. Pao added that it might create an equivalent of Hulu Plus down the road, where subscribers pay a monthly fee for access to the entire collection.
Shout! Factory was born in 2003 after Garson, his brother Richard (CEO of Shout!), and Bob Emmers sold off Rhino Records. Shout! started with CDs but quickly shifted to DVDs, first making its mark in 2004 when it cleared all the music licensing rights and released the short-lived but beloved Freaks and Geeks.
“That sold way beyond our expectations,” Foos says. “It also led to a nice relationship with Judd Apatow, who connected us to Garry Shandling, which got us both the rights to The Garry Shandling Show and The Larry Sanders Show.”
These cult classics — along with broader hits like WKRP in Cincinnati, All in the Family, The Bob Newhart Show, and Hill Street Blues — built a strong following that Foos believes provides a built-in audience for the digital channel. “We have 300,000 social media followers, 100,000 newsletter subscribers, and a website with a couple of hundred thousand unique visitors each month,” he says.
But the free digital platform will allow the company to indulge in more “cult-y” programming as well. Foos says there are plenty of other sketch shows even less famous than Fridays, but they plan to be tactical with their releases. “We're not putting up everything at once,” Foos says.
Pao points to March, when Disney is releasing a new Cinderella movie — Shout! Factory is banking on getting free publicity by holding its 1962 Rodgers and Hammerstein musical version of Cinderella till then (although the DVD is already out and selling well, he adds).
Down the road, Foos says, there'll be more strategic maneuvers, such as possibly carving out separate channels for different genres and finding new ways to make their product appealing. They can't legally reedit old Fridays episodes, for example, but they can pull out clips and monetize those so you could go straight to all the Michael Richards sketches. “We could maybe even do a 'Best Physical Comedy Moments' collection and add in clips like Chevy Chase falling down on SNL from YouTube,” Foos says. “We would not be able to monetize those segments, but even if only three of the top ten were ours, we could drive people to our site and give them a good viewing experience.”