Moonves: Pocket.watch will give creators equity stake

The startup's first content deal with YouTube toy-review channel HobbyKidsTV offers a window into its strategy to stand out in the kids digital space.
April 26, 2017

A month after launching with US$6 million in hand, Pocket.watch isn’t wasting any time getting into the kids content game.

The startup helmed by former Maker Studios chief audience officer Chris Williams, ex-Nick boss Albie Hecht and Hollywood entertainment lawyer Jon Moonves has inked a long-term partnership with YouTube toy-review network HobbyKidsTV to expand the brand into apps, books, an animated series and toys.

Pocket.watch, which creates, acquires, distributes and curates content for kids age two to 11 across platforms, will kick things off with a new HobbyKidsTV animated series that’s being fast-tracked by Hecht and the startup’s development team. Pocket.watch will also give HobbyKidsTV an equity stake in the company, as well as access to digital experts who can help innovate new programming formats and develop original IP.

In return, Pocket.watch will have exclusive access to HobbyKidsTV’s library of 3,000-plus videos for packaging and distribution outside of YouTube, as well as ideas from HobbyKidsTV that can be transformed into franchises. It will also be privy to commercial opportunities brought about by HobbyKidsTV’s significant audience reach. HobbyKidsTV’s 10 YouTube channels, which review toys and games and feature unboxing videos, collectively amass 200 million views per month. The network has particularly struck a chord with kids through its Giant Egg series of videosone clip featuring two boys unearthing Batman-themed toys from the dark confines of large egg-shaped structure has had 25 million views, for example.

HobbyKidsTV is the first of an anticipated 12 to 15 deals that Pocket.watch aims to strike this year, according to chief strategist Moonves.

“We really want to embrace the people who have made it to the top of the YouTube ecosystem, and we are very excited about finding the cream of the crop in terms of creativity, branding and audience influence,” Moonves says. “HobbyKidsTV has built a real brand with more than five billion lifetime views. Their equity interest in Pocket.watch means they will want us to do well.”

While Moonves says each upcoming partnership will be tailored differently, all will entail meaningful equity participation. It’s not a buy-in, but rather an equity offering, as the Pocketwatch partners put aside a chunk of company ownership following its Series A funding round for this very purpose. It’s a different form of incentive that Moonves says is a more modernand uniqueapproach to revenue sharing.

“We don’t want to build an MCN, but rather a group of real partners and collaborators, hence the equity piece,” Moonves says. “When our company evolves, they will all be a part of it. Look at Maker. Whether it was successful for creators or not, its original stakeholders made lots of money when it sold to Disney. That’s why this is a very effective model.”








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