Chicken Soup for the Soul Entertainment, which disclosed financial troubles to the SEC in December, has formed another joint venture as it looks to drive added revenues for its existing assets through third-party deals.
The latest effort is a JV agreement with Swirl Films to relaunch the ad-supported video on-demand (AVOD) FrightPIX service as a free ad-supported streaming TV (FAST) channel. In addition, the partners are launching FrightPIX as a YouTube channel and plan to offer it through other connected platforms.
CSSE is combining “thousands of hours” of full-length horror, thriller and true crime shows with exclusive original content produced by Swirl Films. The Atlanta-based Swirl Films has created over 100 original productions across various platforms and distributors, including BET, Bounce, Lifetime, Hallmark and others.
“As a consistent producer of thrilling content for networks, partnering with Chicken Soup for the Soul Entertainment on FrightPIX and having our own platform is a dream!” said Eric Tomosunas, CEO of Swirl Films / FrightPIX LLC, in a statement. “FrightPIX allows us to continue to expand our content offerings and gives us the unique advantage to leverage our ability to produce quality content at lower price points for our platform.”
Under the agreement CSSE is providing content from its Screen Media Ventures division, while Swirl Films will produce original content and manage the channel itself, while also serving up its expertise in the independent film space. It’s the second recent streaming JV for CSSE, which last week disclosed a joint venture with Fuel TV to launch FAST and SVOD channels for action-sports content. CSSE has said it plans to launch more JVs in 2024 as it looks to monetize its existing assets.
“We’re delighted to be working with Eric and his team at Swirl Films on this joint venture,” said Elana Sofko, chief strategy officer of Chicken Soup for the Soul Entertainment, in a statement. “Creepy content is one of the most popular genres for streaming audiences, not commonly available for advertisers, and we feel this new joint venture will enable us to fully realize the potential of our catalog and the FrightPIX brand.”
In December CSSE, which counts AVOD and FAST services including its namesake Chicken Soup for the Soul, as well as Crackle and Redbox Free Live TV service and TVOD and DVD rental business, in a 10-Q filed with the SEC disclosed “substantial doubt” about its ability to continue operating as a going concern.
The company took on nearly $360 million in debt associated with its 2022 acquisition of DVD rental kiosk business RedBox but later failed to secure a loan facility, leading to issues with acquiring and paying providers for content. That resulted in lower Redbox kiosk rentals, which left “insufficient cash flows and a significant working capital deficit,” impacting its ability to effectively run the business. The company in late December said it was exploring several strategic avenues including hiring an investment bank to help sell assets and assess strategic alternatives, seeking third-party lending, and also pursuing active discussions to modify underlying terms of an existing loan agreement.
For more on CSSE’s financial disclosures, read here.