More and more recurring recipes at Xilam

The videoconference meeting with Marc du Pontavice, boss of Xilam, confirmed our idea that this animated series production company is developing a very promising strategy. First, Xilam did not wait for the introduction from the start of 2022 of funding obligations for independent producers by streaming platforms to be very present with them. More than half of the turnover already comes from deliveries to these platforms, of which 40% for those by subscription (SVOD) and 10% for those financed by advertising (AVOD). Marc du Pontavice explains that they have “ a strong need for entertainment programs, because they travel very well around the world, allowing the amortization of the investment in a large number of countries “. In 2021, series like Chip’n’Dale at Disney + or Oggy Oggy at Netflix were delivered. Discussions are underway with Video Max (Warner). And Xilam is in direct contact with the three Chinese platforms, Youku (Alibaba), Tencent and Iqiy. The Tales of Lupine have been delivered to Youku.

Marc du Pontavice also explains to us that the strategy consists of “ create recurrence To reduce the usual fragility of production companies. Thus, the Oggy Oggy series was designed from the outset to generate merchandising revenue with derivative products (royalties). This is how a contract was signed with a global toy company, Simba. The launch of toys is scheduled for Christmas 2022. Catalog revenues, expected to rise sharply this year, also help reduce income volatility. The accounting depreciation of the series is prudent, in ten years maximum. Then the revenue 100% match the profits. The rate of amortization has accelerated, because it is linked to the period of exclusivity of first-time broadcasters, which is shorter for platforms than for traditional television channels. Asked about the balance sheet value of the catalog, the financial director, Arnaud Duault, who participated in the interview, tells us that it amounts to 68 million euros net.

Marc du Pontavice also draws our attention to the fact that “ adult animation achieves spectacular audiences in the United States “. Investment in this promising segment could drop from $ 1 billion to $ 2 billion within three years. Budgets are much larger than for children’s animation series. It is therefore an identified growth driver, with orders at the start of the year and sales from 2024-2025. Xilam has legitimacy in this area, because he has already produced an animated film for adults (I lost my body).

The leader does not hide either that he has a ” debt capacity of 15 to 20 million euros for acquisitions of small studios, in a very fragmented European market “. There is therefore no change in the capital to be expected in the short term.