Positive revenue growth of 4 per cent for WildBrain’s Q2 2020 will be stunted heading into the back half of the year, it has warned, after changes in YouTube’s advertising rules immediately impact its Q3.
The positive second quarter spurred group revenue 6 per cent growth in its first half 2020, which ended 31 December 2019. Viewership figures through its WildBrain Spark YouTube division climbed 36 percent to more than 9.9 billion during Q2, sending growth for the first half up a whopping 51 per cent in the period to 22 billion views.
Eric Ellenbogen, WildBrain CEO, says the figures show WildBrain Spark “to be a valuable platform for our own IP and brand partners”.
The company develops and manages YouTube audiences for its own brands, such as Peanuts and Teletubbies, alongside Moominvalley, Best Furry Friends, Fireman Sam and Ben 10 and a host of other third-party properties.
But changes in YouTube’s policies towards targeted advertising on videos aimed at kids have already significantly hit WildBrain Spark’s revenue.
Introduced in January, new YouTube rules ban targeted advertising and restrict comments and other forms of interaction on videos aimed at children. The result led to a sharp decline in WildBrain Spark revenue, dropping 40 per cent year-on-year in the first few weeks of January.
Eric believes that while its YouTube business will miss out on money in the short-term, YouTube’s new rules will “reward quality content” with improved monetisation.
“We’re ideally positioned to benefit from this move over the long term,” he adds.