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Streaming services are desperate for new material to feed viewers during the pandemic. Blue Ant Media’s CEO is happy to oblige as long as there’s a profit

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Steve Craft/The Globe and Mail

Everyone has a pandemic screen-time story, and the brass at Blue Ant Media, the Toronto-based media and broadcasting shop founded in 2011 by Michael MacMillan, is no exception. One admits to living through a “dark period” of gorging on terrifying bio-docs about heinous criminals. Another describes content consumption in his home during the lockdown as “watching more of everything.”

Which, by most accounts, has been the norm, especially earlier in the crisis, when some wits took to Twitter to declare they’d reached the “end of the internet.” One survey produced for Rogers Communications estimated that Canadian streamers, many of them in the sought-after 18-to-34 demographic, increased their daily viewing time by almost two and a half hours in 2020.

Blue Ant’s founder, however, tacked in precisely the opposite direction, as he has been known to do in other phases of his long career. When the lockdown began, MacMillan—whose 400-employee company produces and distributes shows like Canada’s Drag Race and owns eight specialty channels, including Love Nature—retreated to his place in Prince Edward County, where he has no cable or even a Netflix subscription. “While everybody else was watching TV all day,” he says matter-of-factly, “I went to ground and read books. I’m not part of the cohort driving up these amazing viewership ratings.”

“Amazing” is his characteristically understated way of describing the viewing landscape right now. MacMillan points to the proliferation of subscription streaming services, which is dizzying, not to mention confusing, as buzzy series invariably end up on another channel or don’t have Canadian rights (yet). Free streaming sites, such as CBC Gem, Roku and Pluto TV, are gaining ground, and let’s not even talk about the rampant online pirating of marquee cable brands like ESPN. Meanwhile, the pace of cord-cutting, a well-established trend before March 2020, has accelerated hugely, driven in part by the growing household cost of multiple streaming subscriptions.

The bottom line is that COVID has triggered a TV gold rush in the guise of a seemingly bottomless desire for shows, series, docs—basically anything to keep that content tank from running on empty. In the U.S., huge investors have snapped up production companies for staggering sums; Blue Ant itself is privately owned, with Fairfax Financial holding a big stake. “It really is a producer’s market now,” says Charlie Keil, a University of Toronto cinema studies expert. Yet “what’s on” no longer looks anything at all like your parents’ 500-channel universe. So while content is definitely king, as the old cliché goes, the pandemic challenge for firms like Blue Ant has been figuring out how to react as viewers grow tired of buying endless subscriptions to see all of it.

At 64, and well into major career venture No. 2, Michael MacMillan is runner-grade trim and still rocks a shock of shoulder-length, straw-coloured hair that pre-dates the coronavirus. One warm day, sitting on the patio in back of the chic converted Victorian semi that serves as Blue Ant’s executive hub and the head office of his charity, the Samara Centre for Democracy, he radiates that aura of cerebral gravitas that marks his stature as one of the éminences grises of Canadian TV.

It’s a mien for which he’s well known, and he comes by it honestly. As Asha Daniere, a former Blue Ant legal counsel explains, MacMillan is famously indifferent to office intrigues, TV industry BS and “corporate arbitrage.” “One of the interesting things about Michael,” Daniere says, “is that he just gets more opportunities than most people.”

While the pandemic viewership trend lines suggest hockey-stick acceleration, MacMillan’s view is that much of what’s happened in the industry was germinating before the plague sent everyone into hiding. That craving for new content, he says, “just doubles down on the trends that were already there. It turns out that people like to be entertained or informed by watching video. They like it so much, they’re demanding more choice, demanding to be able to do it from wherever they want. So if you’re in the business of making and distributing or presenting these programs, it’s a great opportunity, which was the thesis for starting Blue Ant in the first place.”

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Steve Craft/The Globe and Mail

In 2007, at the very crest of that decade’s financial craziness, MacMillan and his partners sold Alliance Atlantis, the film and TV empire he started in 1978, to CanWest and Goldman Sachs for a stunning $2.3 billion. He checked out for four years to think about the world and then launched Blue Ant from a mishmash of content assets, including the Cottage Life brand and a cable channel called GlassBox. The idea, as he liked to say at the time, was to create a media company that was “platform agnostic,” meaning he didn’t care if you watched on your laptop, the phone or the TV. That concept, born in the early days of streaming and at a time when Netflix had just launched in Canada (2010), seemed, well, theoretical. Today, of course, platform agnostic is table stakes.

Soon after he started the company, MacMillan took on equity partners—Torstar and Fairfax, as well as the Slaight family. (Fairfax began investing in media in 2007, with a stake in Torstar and then CanWest, and expanded its entertainment industry holdings when it bought a piece of Blue Ant.) MacMillan acquired Canadian rights to branded content offerings like Smithsonian Channel and BBC Earth, and produced some shows in-house, including for Cottage Life TV. Despite MacMillan’s theorizing about the future of video, Blue Ant continued to focus on old-fashioned cable TV, which still accounts for about a third of its revenues, cord-cutting notwithstanding.

Along the way, the company made numerous rights deals and acquisitions, including, oddly, a piece of a Los Angeles–based gaming outfit. As MacMillan tells it, Blue Ant in 2014 picked up a share of Omnia Media, a startup specializing in YouTube content, mostly hip hop. As Blue Ant increased its stake, Omnia evolved into an all-gaming site with a big following. “Once we realized that,” he says, the thinking was, “Okay, this is cool, this is a real thing, but we’re not video game makers.” In 2020, Blue Ant sold Omnia to Enthusiast Gaming, a TSX-listed gaming company, in exchange for 18.25 million shares, plus cash and debt. At the time, those shares were trading at $1.65, but soon shot up to $8. Blue Ant has gradually sold most of its Enthusiast shares, earning a $100-million windfall. As he says of this profitable digression, “We needed to zig and zag.”

The episode is emblematic of Blue Ant’s approach, as well as MacMillan’s knack for turning a sow’s ear into a silk purse. As Keil and other Canadian TV industry watchers point out, the firm’s MO has always been opportunistic—searching for profitable niches in a rapidly globalizing space. “In all honesty,” muses Daniere, who joined in 2012 and left last year, “it’s not like it was all well planned.” Phyllis Yaffe, MacMillan’s long-time business partner and one of the company’s directors, puts it this way: “I think Blue Ant has matured into what it was intended to be. It hit some bumps in the road, but it’s found its groove at this point.”

When Blue Ant started, producers like MacMillan had a more or less well-established approach to generating revenue. To get something made, they cobbled together financing and tax credits, secured a Canadian broadcast deal, and then sold the rights in the U.S., but held back international rights, which could be marketed later on. Blue Ant also purchased rights internationally for programming it would fold into its established Canadian cable channels.

That business model has gone the way of the satellite dish. In the current market, the streaming behemoths—Netflix, Disney, Amazon, Apple and the like—buy the world, as the saying goes, meaning they grab global rights for everything. The quid pro quo is that there’s a ton of financing chasing after fresh content, but producers have to relinquish all their IP, which is where the real money is.

Yet the streaming and video-on-demand juggernaut has shifted because of what some in the business have described as “subscription fatigue.” The related development is the rise of free advertiser-supported streaming TV—or FAST—which is a kind of digital descendent of the old appointment TV and basic cable model. FAST platforms like Samsung TV Plus, Pluto TV (owned by ViacomCBS) and Roku have all seen significant growth over the past few years. A Deloitte market survey published in April found that 55% of respondents were watching a FAST channel. Another recent market analysis predicted the FAST sector would double in size in the next two years to US$4.1 billion. “FAST is quite a good example of everything old is new again,” says Yaffe. “You can’t just keep adding more and more streaming services.”

About four years ago, Blue Ant began responding to the industry’s shifting sands, mainly by significantly increasing its library of originally produced programming. The company snapped up or launched several international production houses. Much of the content these divisions produce, under the Blue Ant Studio umbrella, airs on platforms ranging from Netflix and Crave to Sky and the BBC. The FAST space has also become a growing focus for the company, MacMillan adds. “I think the appetite for FAST is everywhere. Like, literally everywhere.”

In terms of shows, Blue Ant’s imprimatur can be found today on properties like Crimetime and a docuseries about Jeffrey Epstein’s madam, Ghislaine Maxwell, as well as eight branded channels, including HauntTV, which launched last December and can be found on Roku. Love Nature, a popular nature documentary channel, now airs in 135 markets, according to Jamie Schouela, Blue Ant’s president of global channels and media.

The latter two properties are prime examples of the Blue Ant MO. HauntTV, MacMillan explains, traces its roots to a travel channel, of all things. “What was weird,” he muses, “is that on our TV channel, the programming that worked best was paranormal.” In a global pandemic, shows about haunted hotels and spooky castles, perhaps unsurprisingly, connect well with audiences craving escapism.

As for Love Nature, Schouela points out that Blue Ant has cobbled together hundreds of hours of high-definition documentaries about baboons and ospreys and other #nature Instagram fodder. These shows, he says, are evergreen and illustrate how Blue Ant has continued to fill its content cupboards with profitable niche programming for free streaming sites. As Schouela notes, “We’re not trying to compete with premium dramas.”

Company officials say strong growth on free streaming platforms, which offer producers some combination of advertising revenue and licensing fees, confirms that Blue Ant’s “FAST-first” strategy is hitting the target.

The rightness of the gambit, however, merely serves as a reminder that the viewer beast in these not-quite-post-COVID times still demands to be fed. “The appetite for content around the world is rather insatiable, to be blunt,” says Julie Bristow, the former CBC executive who built the network’s Dragons’ Den franchise and last year founded Content Catalyst Fund (CCF), a development shop specializing in documentary content created for, by and about women. “Having both been on the buying side and the selling side of television,” she notes, “I’m thrilled to be on the selling side, because there are more clients than there’s ever been before.”

MacMillan is among those clients. Earlier this year, Bristow and Blue Ant negotiated a wide-ranging development partnership, with CCF signing on to create “unscripted” programming in genres like lifestyle, crime and docuseries. Bristow will be executive producer, and the programming will be mostly distributed through Blue Ant’s international division.

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Steve Craft/The Globe and Mail

There’s good reason for Canadian media watchers to pay particular attention to this deal. This past August, A-list actor Reese Witherspoon sold her media production company, Hello Sunshine, to Blackstone, the American private equity giant, in a deal that valued the company at an eye-watering US$900 million.

Concerned about the lack of compelling female roles in the scripts she was being offered, Witherspoon and a partner set up Hello Sunshine in 2016 specifically to create stronger programming for and by women, first in movies and then in the documentary genre. Bristow’s company, which was established a year before that massive Blackstone acquisition, has dived into this exact space. “CCF addresses the same need,” she says. “Stories told through a female lens—that’s the value proposition Blue Ant Media saw in CCF.”

The net effect of this and the other deals struck since 2017 is that Blue Ant has finally emerged from its early cubist phase. The days of esoteric prognostications about technology platforms supporting little-known brands with no obvious connective tissue have yielded to, well, a simpler storyline. “I like being a little engine,” allows MacMillan, reaching for a different metaphor. “When it’s getting traction, that’s really the fun part, and that’s the phase we’re in right now. We’re teeny compared to the majors, so there’s a lot of growth to be had.”

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The Globe and Mail

Editor’s note: An earlier version of this article incorrectly said Blue Ant merged Omnia with Enthusiast Gaming, in exchange for six million shares in Enthusiast, eventually resulting in a $16.2-million windfall. In fact, Blue Ant sold Omnia for 18.25 million shares plus cash and debt, eventually generating a C$100-million windfall.

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