‘Chicken Girls’ maker Brat raises $30 million to produce online shows for teens

“Chicken Girls: The Movie,” a teen musical about a tight-knit group of high school dancers, didn’t get much attention in Hollywood when it debuted for free online two weeks ago.

But the hourlong movie, based on a popular digital series, managed to draw an impressive 10 million views on YouTube, boosted by the social media following of its 13-year-old star, Annie LeBlanc.

For Hollywood-based digital video studio Brat Inc., “Chicken Girls” is just the latest in a series of digital projects it hopes will transform the company into a major online brand.

Brat specializes in scripted teen dramas and comedies — mostly short episodes lasting a few minutes — featuring budding actors with big followings on Instagram and YouTube in hopes of connecting with their legions of young fans who are coveted by advertisers.

Flush with $30 million in new financing, the year-old company is ramping up to produce more shows that appeal to teens and young 20-somethings — especially girls — who have abandoned traditional TV for bite-size entertainment on Instagram and Snapchat.

“You can look at YouTube views, but seeing our content out in the wild gives us confidence that we’re penetrating youth culture,” Brat co-founder Rob Fishman said.

Teens and young adults have flocked to higher-end shows such as Netflix’s “Stranger Things” and “13 Reasons Why.” When they’re not watching those shows, they’re paying attention to the many social media personalities who create free beauty tutorials and online skits.

But Fishman, 32, and Brat co-founder Darren Lachtman, 36, say there’s a void for teen-oriented television programming once met by the WB network in the 1990s, Disney Channel fare such as “High School Musical,” and the John Hughes movies starring the Brat Pack, which inspired the Brat moniker.

“There’s been a couple franchises and independent movies, like ‘Edge of Seventeen,’” said Lachtman, referring to the 2016 Hailee Steinfeld movie. “But there’s been nothing that we felt was building this generation’s MTV.”

The company on Tuesday said it raised $30 million in a recent financing round led by Anchorage Capital. Anchorage’s other entertainment investments include Metro-Goldwyn-Mayer Studios and “Catfish” producer Critical Content, formerly the television arm of Relativity Media.

Brat plans to make more shows and hire a team of people to sell advertising that capitalizes on the social media reach of its young stars. The company, which has 35 full-time employees, has 2 million free subscribers on YouTube.

BTIG analyst Rich Greenfield said the company has impressed so far by taking YouTube and Instagram stars and putting them in higher-quality productions.

“What they’re trying to do is take very successful social media talent and give them more money and production resources to create higher quality content,” Greenfield said. “There are not a lot of examples of people trying to do that.”

Fishman and Lachtman witnessed the power of social media marketing with their previous company Niche, which connected young social media personalities to advertisers such as HP, Nike and Warner Bros. They sold Niche to Twitter in 2015 for about $55 million.

That track record has drawn interest from investors. In November, they secured $10 million in funding from an investor group led by Menlo Park-based A. Capital. Ronny Conway, founder of A. Capital, said he was impressed with the Brat founders’ history of working with social media “influencers” to court advertisers.

“Young people are spending much less time in front of TV sets and more time in front of YouTube and Instagram,” Conway said. “Rob and Darren have basically built a TV-sized network online over the past year, and are becoming the definitive brand for this next generation of content producers.”

Still, it’s a crowded field. The entertainment business is rife with digitally minded companies that use social media to build a youthful following. Some tailor their shows for certain audiences by focusing on genres such as horror and religion. DreamWorks Animation co-founder Jeffrey Katzenberg has tapped former HP chief Meg Whitman to head his NewTV start-up. Katzenberg reportedly wants to spend $100,000 on each minute of video.

The so-called multi-channel networks that cropped up several years ago have struggled to find a growing business model. Fullscreen last year shut down its subscription video service less than two years after its launch. Verizon recently shuttered its go90 streaming app, which was a prominent buyer of the “snackable,” or short, video created by YouTube-bred producers.

And many remain skeptical about social media stars trying to make more traditional TV shows and movies. But “Chicken Girls” actress Indiana Massara, a 15-year-old from Perth, Australia, says that is starting to change.

“After two seasons, a movie, and now a third season, I think people are starting to take us more seriously,” she said.

Fishman and Lachtman think they can stand out by creating relatable stories and characters. One of their latest shows, “Total Eclipse,” tells the story of a teen girl who struggles socially after being cast out by her former friend group. The characters escape to fantasy realms when times get tough. One character imagines herself as a medieval princess.

Many of Brat’s shows take place in the same fictional county with overlapping story lines and characters. That allows the company to save money on production by sharing sets. At Brat’s cramped 10,000-square-foot office in Hollywood at Willoughby Avenue and North Highland Avenue, part of the building has been modeled as a set for a fictional school’s hallway, complete with lockers and bulletins for the school’s play and math club sign-ups.

Brat, which makes its money through advertising sales on YouTube, generated less than $5 million in revenue in the last year. Although the company is not yet profitable, sales are expected to triple next year, executives said.

Meanwhile, Brat is expanding its lineup of shows. Earlier this year, Brat struck a deal with Snapchat maker Snap Inc. to carry its new competitive cheerleading comedy “Boss Cheer,” featuring teen social media stars Tessa Brooks and Tristan Tales. Brat’s edgier teen drama “Turnt” is expected to premiere on Facebook Watch this year. “Dirt,” a new show about motocross racing, is aimed at boys.

“Chicken Girls: The Movie” almost had a more traditional Hollywood release. The company had struck a deal with Santa Monica studio Lionsgate to distribute and market the film, which could have generated iTunes sales revenue for Brat.

But the plans were amicably canceled, according to Brat executives. The start-up wanted to release the film before the launch of the show’s third season. Lionsgate, meanwhile, wanted a more traditional studio-quality movie.

Though it didn’t make it onto the big screen, the movie’s release brought thousands of new subscribers to its YouTube channel, where the company can make money through advertising. The movie, filmed over three weeks in Alhambra and other Los Angeles-area locations, cost about $500,000 to make.

“250,000 people subscribed to our channel because of that,” Fishman said. “That’s an audience we can monetize over and over and over again.”

ryan.faughnder@latimes.com

@rfaughnder