David Reagan - EVP, Corporate Development Michael Donovan - Executive Chairman Dana Landry - CEO Keith Abriel - CFO

Aravinda Galappatthige - Canaccord Genuity Rob Goff - Euro Pacific Canada Haran Posner - RBC Capital Markets Deepak Kaushal - GMP Securities Bentley Cross - TD Securities Robert Peters - Credit Suisse Tony Rizzi - CIBC

Thank you, operator, and thank you everyone for joining this morning. Today we’re going to start up the call with comments from our Executive Chairman, Michael Donovan, after which we will turn it over to our Chief Executive Officer, Dana Landry, followed by Keith Abriel, our Chief Financial Officer, who will take a deeper dive into the numbers.

After Keith, I will come back to provide a little bit more color on some corporate development activity. We will then open the line to questions from analysts.

First though, the matters discussed in this call include forward-looking statements regarding the business strategies of DHX, the future financial and operating performance of DHX and its subsidiaries, the timing for implementation of DHX's business strategies and payments of dividends and the markets and industries in which DHX operates. Such statements are based on information currently available subject to a number of risks and uncertainties.

Actual results in the future could differ materially and adversely from those described interest he forward-looking statements as a result of various important factors, including the risk factors set out in DHX Media's MD&A and the company's annual information form. I will now turn it over to our Executive Chairman, Michael Donovan.

Michael?

Thank you, David. We are pleased this morning to be again reporting record results for DHX Media.

Today's numbers continue to underscore the strength of the integrated platform and world leading library we built. I'd like to congratulate Dana and the team on their hardwork, as we continue to realize double and triple digit growth.

One of the most exciting developments for DHX over the last year was our expansion into China. Earlier this month, we announced deal with Alibaba, to provide more than 2,500 half hours of DHX content to their new SVOD service.

This of course, follows the launch in March of our joint venture at AVOD service with China's state broadcaster. We see these two deals as only the beginning of the exciting opportunities available for us in China.

Dana will expand on this in his update. I also want to highlight the excellent ratings for the Family Channel going into the new broadcast here, which began September 1.

Family is the number one kids specialty network in Canada. The series, The Next Step and the feature film Fallout winning the number one and two spots respectively on their premier date of September 11.

We see all these strong ratings as signs of early success for our new branding and programming strategy at DHX Television, the remainder of which we will be rolling out over the coming months. With that, I will pass the call over to Dana.

Dana?

Thank you, Michael, and thanks everyone for dialing in today. As Michael mentioned, this is indeed an exceptional quarter and year for DHX, with continued strong growth across all key metrics, including growth in every revenue category.

Revenues for Q4 were up 139% over Q4 last year. Our adjusted EBITDA was up 124%.

Our basic earnings per share rose from C$0.01 to C$0.03 for this quarter, and our adjusted EPS rose to C$0.04 versus C$0.02 last year. These results included strong quarterly organic growth, including among others, 160% organic growth in proprietary production and a 52% distribution for the quarter, and annually organic growth of 33% for proprietary and 68% for distribution.

As Michael mentioned, one of the many opportunities we are very excited about is China. Our announcement earlier this month puts us in business with e-commerce giant Alibaba, who has now license on a non-exclusive basis, almost one quarter of our library for their new SVOD service.

This is a huge leap forward for us in the territory. The Alibaba deal highlights the continued strength of DHX as a go to supplier of kids and family content worldwide.

What we are seeing in China is the emergence of the new OTT market. In our view, the same way OTT services rolled out in North America and Europe over the last few years.

Moreover, we have started licensing in China in the same way, with non-exclusive rights, the same way that we did in North America and Europe some years ago. And as a reminder, we saw growth in North America and Europe as these services expanded and new ones emerged, and we expect to see the same escalating demand for our content in China, as new services grow and emerge.

Indeed, while we cannot count on any specific deals, I can say that we are now in negotiations with several additional OTT services in China. The VOD market in China is heating up, and being on Alibaba's SVOD puts DHX in a strong negotiation position as these other services will want to lock in marquee titles as well as have access to our large library.

Our Alibaba deal also allows us to offer a significantly larger range of Mandarin translated content, leading to margin expansion as we look to leverage these assets across other OTT services. Over the coming years, we expect to see similar growth dynamics unfold in other emerging territories such as India, Southeast Asia, and Brazil.

This is all a continuation of what we have been discussing for quite some time now, the global expansion of OTT viewing. In fact, more than 50 new VOD services have launched in various territories around the world since January 2014, and others such as Netflix have expanded and announced further expansion plans.

This has translated to ravenous demand for content and kids content is being disproportionately revalued upwards, because kids viewing creates stickiness within the household. We are seeing that OTT platforms need kids content to attract and retain subscribers and help reduce customer churn.

As we have seen in territory after territory, families want marquee shows, like the ones in our library. Shows such as Teletubbies, Degrassi, Inspector Gadget, Caillou, Yo Gabba Gabba!, and many others.

This is meaningful not just only for our distribution business, but also for our merchandising and licensing business. Alibaba is not just an SVOD service, they are one of the world's largest e-commerce companies.

We expect this will open doors for our merchandising and licensing brands in China representing huge incremental potential. Over the past year, we have been steadily building up our M&L business to be able to implement a strategy that takes advantage of platforms like Alibaba and other customer -- consumer product retailers.

Our U.K. based M&L business led by Peter Byrne has experienced an amazing turnaround driven by success in the represented Group.

For fiscal 2015, CPLG posted a year-over-year EBITDA increase of 1,200%. The business expanded into the Nordic, Central Europe, and Middle Eastern Territories and continues to drive a strong retail agenda with an enviable portfolio of rights.

In Europe for instance, CPLG represents the Minions franchise as well as Jurassic World from Universal, both blockbuster merchandising success stories. We look to build off these successes.

Our DHX brands team in the U.K. and U.S.

has been very busy securing no fewer than 77 international licensing deals for top DHX brands. I'd like to spend a few minutes focusing on three of these brands today.

First, our highly anticipated new Teletubbies series is set to launch in the U.K. this November and internationally in early 2016.

This update of the classic brand has generated worldwide interest on the merchandising and licensing front, landing 33 toy and product deals. As you will recall, Character Options based in the U.K.

was appointed global master toy partner. Spin Master will distribute in North America and key European territories.

Haven will represent the brand in Australia and VTech will be rolling out electronic toys worldwide. Broadcasters for the show have been announced in the U.K., the U.S., Canada, France and Italy, and there are more to come.

We see tremendous optionality on this brand and feel it is poised to reclaim its position as a worldwide phenomenon in the pre-school space. Next, a potential second big driver for DHX brands is a new preschool show called Twirlywoos, which launched with strong ratings in the U.K.

in February of this year. We have since announced broadcast deals in France, Finland, Sweden, Norway, Israel and Canada, with more to come.

Golden Bear, the global master toy partner on this brand, began shipping a limited release of products this summer. HarperCollins is global publisher.

Further, we've signed a range of other partners for products such as apparel, puzzles and partywear. Next, turning our attention to our third property which we are really excited about for DHX brands, is the new hit teen show, Make It Pop.

The show premiered last April on Nickelodeon in the U.S., taking the number one spot with kids six to 11, and was the most watched long form content on nick.com and on the Nick app. In May, Nickelodeon commissioned a second season for make it pop, which we are now currently shooting in our Toronto studio.

Further, season one rolled out on Nick's international channels this summer. There is a tremendous buzz about the show, and this momentum contributed to us being able to announce into September, that JAKKS Pacific has been signed as master toy licensee for the brand.

Stay tuned for more exciting announcements on Make It Pop ahead. These three examples illustrate what is possible with our integrated platform.

Let's remember, DHX brand is only 15 months old, so there is lots of room and lots of potential for growth. DHX demonstrated scale in production and distribution by delivering explosive growth in recent periods.

Over the coming two to three years, its time to demonstrate our potential in merchandising and licensing. Our consumer products deal with Teletubbies, Twirlywoos, and make it pop are really just the beginning of what we feel can be accomplished with this part of the business.

Changing topics now, we are now one year into our ownership of DHX television. The question that we as management often get asked, is how does DHX TV fit in, into all of this.

Well as Michael mentioned, Family Channel remains the number one kid's network in the country. Meanwhile, our TV rebrand and new programming strategy is off to a great start.

We launched new branding for our preschool channel's Family Junior and Télémagino earlier this month and we will be launching the rebranding of our kid's channel charged on October 9th. Proven hits like The Next Step and The Gaming Show have been renewed.

An exciting slate of new shows have also been commissioned, such as Degrassi Next Class, the Wonderful Wayneys, starring Molly Ringwald and Jason Priestly. Further, hit content from AwesomenessTV and Mattel has also been licensed, and top priority DHX series, such as Degrassi, Twirlywoos, Slugterra, Teletubbies and Yo Gabba Gabba!

are already either on the channels or will be on soon. We have had a busy summer with the rebranding, and have had great feedback from the BDUs on our new lineups, and we are feeling positive about our direction.

The BDUs are interested not only in linear rights, but also SVOD and mobile rights. This rebranding is core to our content strategy, as we are constantly looking at things from a global perspective.

What's critical to understand, is that channels are superb rights generators, allowing us to commission shows, many of which we produce in our own CDOs. Once produced, we can leverage those shows worldwide through our distribution and merchandising and licensing arms.

We are very optimistic of the possibilities for new IP generation for the future. The year ahead is going to be very exciting for DHX, as we continue to realize optionality across our brands through the global platform we'd built.

So please stay tuned, there are many exciting developments to come. With that, I will turn the call over to Keith, for an in-depth look at our financials.

Thank you, Dana, and thanks to everyone for dialing in today. Along with these strong results, management is pleased to announce its outlook for fiscal 2016, the highlights of which are as follows; production revenue is targeted in the range of C$40 million to C$50 million; producer and service fee revenue is also targeted in the range of C$40 million to C$50 million.

Distribution revenue is targeted in the range of C$75 million to C$90 million; DHX Television revenue is targeted in the C$68 million to C$75 million range, and M&L owned revenue is targeted for C$24 million to C$30 million. Turning now to the posted Q4 numbers, management is pleased to highlight very strong growth in revenues, which are up 139% to C$71.1 million for the quarter, from C$29.7 million for Q4 2014.

The increase in Q4 2015 was partially due to the acquisition of DHX Television on July 31, 2014, which accounted for C$19.9 million or 48% of the growth, as well as increases in distribution revenues, which accounted for 24% of the growth, proprietary production which accounted for 8% of the growth, and producer and service fee revenue, which accounted for 17% of the growth. Proprietary production contributed C$5.1 million in revenues for the quarter, up 192% over Q4 2014's C$1.7 million.

Q4 2015, the company added 75 half hours to the library, of which 30 half hours were for proprietary titles. This was at the low end of management's expectations for the quarter.

Distribution revenues for Q4 2015 increased 67% to C$24.4 million, from C$14.6 million for Q4 2014. This increase was primarily due to the continuing growth of new digital customers, platforms, and territories and was well above management's expectations.

For Q4 2015, DHX Television revenues were C$19.9 million, slightly below the midpoint of management's expectations. Approximately 90% or C$18 million of the revenues were subscriber revenues, while advertising, promotional and digital revenues accounted for approximately 10% or C$1.9 million of the revenue.

M&L owned revenue decreased 11% for Q4 2015 to C$4 million as compared to C$4.5 million for Q4 2014, as the company had no scheduled live tours during the quarter. M&L owned, excluding live tours was C$4 million, up 16% as compared to C$3.4 million for Q4 2014.

M&L represented revenues for Q4 2015 were up C$1.6 million to C$4.8 million, compared to Q$ 2014, at C$3.2 million and were above management's expectations, driven mainly by the strong performance of our represented show, Minions. Revenues per producer in service fees came in above the high end of management's expectations for the quarter, at C$11.1 million, an increase of 184% versus the C$3.9 million for Q4 2014.

This increase was a result of a combination of the acquisition of Nerd Corps and continued increasing demand for children's content. New media revenues were up 4% to C$1.85 million for the quarter, compared to C$1.8 million for Q4 2014.

Gross margin for Q4 2014 was C$37.7 million, an increase in absolute dollars of C$18.8 million or approximately 100% compared with C$18.8 million for Q4 2014. The overall gross margin for Q4 2015 was 53% of revenue, just below the midpoint of management's expectations.

Adjusted EBITDA for the quarter was C$22.8 million, up C$12.6 million or 124% over C$10.2 million for Q4 2014. Net income for the quarter was C$3.7 million over Q4 2014's C$1 million or an increase of C$2.7 million in absolute dollars.

Comprehensive income for the quarter was C$6 million compared to a comprehensive income of C$2.2 million for Q4 2014, or an increase of C$3.8 million in absolute dollars. Turning to operating expenses, SG&A costs for Q4 2015 increased 71% to C$16 million, compared to C$9 million for Q4 2014.

This increase includes C$2.9 million for DHX Television as well as Epitome, Nerd Corps, and an increased SG&A level at DHX U.K., totaling C$4.4 million. This also reflects increased costs associated with DHX brands and DHX distribution, as management continued to add resources to take advantage of the M&L opportunities associated with Teletubbies and Twirlywoos and the continued global expansion of digital distribution platforms.

Also in the Q4 of 2015 SG&A, are costs associated with the company's listing on NASDAQ, as well as C$1.2 million in non-cash share based compensation. When adjusted for non-cash items, the cash SG&A at C$14.9 million was just slightly above management's quarterly SG&A expectations.

For further specifics on our Q4 results as well as additional information on management's fiscal 2016 outlook and various other information, including a reconciliation of GAAP and non-GAAP financial measures, I would refer you to the company's fiscal 2015 MD&A, which was posted on SEDAR and EDGAR this morning. I will now turn it back to David, for a summary of recent corporate developments.

Thanks Keith. And just briefly, wanted to mention, that we are certainly pleased to announce that, September 23, the Board of Directors approved the dividend for the quarter of C$0.015 on each common voting share and each variable voting share outstanding to shareholders of record at the close of business, October 8, 2015, to be paid October 16, 2015.

This reflects a 7.1% increase for the dividend over the third quarter of 2015. Also late last quarter, as Keith had alluded to here, we were very pleased to announce the launch of listing of our variable voting shares on the NASDAQ Global Select Market.

This was an important milestone for the company, which we believe provides us with greater access to a wider range of investors. With that, I am going to turn it over to the operator to open it up to analyst calls or analyst questions.

Thank you.

Good morning. Thanks for taking my questions guys.

Congrats on a solid year again. I wanted to start with the international SVOD opportunity that you focused on.

I think Dana, you had mentioned earlier and I think in the past conference that China revenues was a little less than C$1 million. I was curious, I mean, when you are deeper in China with operators like TVO, Alibaba, how are the dynamics different versus your experience with Netflix and Amazon etcetera, both in terms of the competitive dynamics and sales process, etcetera?

I was just curious how that's different?

Well thanks Aravinda for that question. I mean, it’s an exciting territory to be in.

Obviously, totally very specific, and we have been closely monitoring China for quite some time now, probably as long as a year, in trying to figure out a way to crack that nut. As you mentioned, I did mention in the previous conference that we had less than about C$1 million a year in China, and really the point there is China is the second largest economy in the world.

Although obviously, it is having a little bit of issues at the moment, still very large. And when you compare that to the revenues we generated in the U.S., it’s, in our opinion, woefully inadequate.

So we are turning our attention to growing that. We feel the best way through that is through partnerships.

The inevitability of that though, would mean, the sales cycle is slightly longer in China as it takes time to understand the political issues and the various movements there. But having said that, on the positive side, we really feel the territory is extremely right for western content and animation content in particular.

It’s really what we feel has been our experience in all parts of the world and China being no different, which is animation is -- it dubs very well in the language, and in this case in the Mandarin and other forms of Chinese dialect, and in a lot of our brands, we are very well recognized over the period; obviously Teletubbies is the big one, but also In The Night Garden, and probably that was really there -- originally started as U.K. brands and sort of the connection to that [indiscernible] is a little closer.

So we feel that, from a library perspective, we are at the top of the heap. For the same reasons, as we are in multiple other territories, which is that -- our library is extremely large.

It’s very diverse in terms of key drivers, a lot of drivers that we believe the Chinese culture will like, and -- but also, has the scale to be able to provide the necessary tools that are one-two punch in these new OTG services. And so, from our perspective, it’s really just the beginning as we mentioned, but it will probably take us a couple of years longer than other territories to expand.

As far as what the deals look like going forward, I would expect similar type of progression. You will recall, when we started back, a lot of the original platforms in the U.S., most of our deals are non-exclusive and those over time, over the last three or four years have translated into some original commissions, for instance our Degrassi Next Class deal with Netflix.

And so, we would expect that that is a similar trend, but we think we are extremely well positioned to take advantage of that territory.

Thanks Dana. And just turning to the M&A landscape, and it’s an area you have had a lot of success in the past; just wonder if you can give us an update of what you're seeing out there.

I know you focused mostly on the smaller, private tuck-ins. Just maybe a general comment around what the opportunities are, and related to that, we noticed that there is NCIB in place.

Should we read that as sort of a slight change in capital allocation plans towards buybacks rather than sort of on the M&A front?

Okay. Thanks for those questions Aravinda.

I will talk to the NCIB first. I mean, really, we feel its good corporate governance to have an NCIB in place for a company of our size, just in case.

So nothing really specific to that. We haven't had one for quite some time, so we wanted to put it in place.

We may access it or we may not. So really, would not read too much into that in terms of capital allocation.

In fact, on the M&A front, and I will turn to your other question; we think in the last 60 days, a lot more opportunities have come forward. One of the interesting things about it, when the markets wobble a little bit, it drives opportunities off those challenges, and I think a lot of the companies that we are looking at doing deals, whatever those might mean, not having the access to the capital markets, whether that is via possibly -- they were considering going public etcetera, and just not having access in markets, is now creating opportunities and in the last sort of 30 to 60 days, a number of those have popped up.

And so I would say, it’s considerably better than it was six months ago in terms of the prospect of opportunities. Having said that, there is not a lot of whale splash [ph] out there -- and as we get larger, inevitably, the deals look to be tuck-ins, and the last thing I would say is, furthering to some of the past comments I have made over the last couple of months or so is that the opportunities we really feel are in the sort of -- some opportunities going forward in the joint venture, strategic partnership where we are really on the map now with respect to content creation and we are seeing a lot of opportunities coming out of the licensing side of the business, whether that be toys or other licensing companies, and other companies that are producing content or trying to produce content from non-traditional means, whether that be games or apps.

So we, in that regard, announced a partnership of a month or so ago with the AwesomenessTV that produced some new content and owned company-owned and co-distributed those rights, and so we are expecting similar deals to that going forward, and stay tuned.

Thanks. And last one and I will pass the line, with respect to guidance, DHX TV; obviously the guidance for fiscal 2016, at least on the revenue side, is fairly conservative, considering that you did about C$76 million in revenue for fiscal 2015.

Is that sort of meant to -- is that meant to be conservative, because that should be a reflection of sort of some of your BDU discussions? I just wanted to see if you -- just wanted to comment on the deal --

Yeah, I expect to be conservative. Obviously I can't comment on any of the specific negotiations.

But I think that we feel that this is an extremely comfortable range for us. Obviously, like we do on all of our ranges, will try to beat and we think that there is lot of opportunity, certainly in the SVOD side and the mobile rights side, in addition to possibly having advertising on the channel and sponsorship, which we think over time, those things will easily cover off whatever might -- headwinds might be created by the linear side.

Having said that, as you know, we are relatively conservative with our guidance, and so we feel this is the range that we are comfortable putting out there at this moment. In six months, we will readdress, and perhaps we will be updated on it.

Great. Thank you.

Thanks Aravinda.

Thank you very much and good morning. My question would be a follow-up on the Family Channel; with the ratings that you have seen to-date out of the Family Channel, would that suggest that you've perhaps invested more into programming than you might have originally anticipated or planned, when you talked to synergies or programming savings of C$10 million to C$14 million, last May I believe it was?

Not really. I think its really a timing thing.

I think what we -- when the reality -- and just get that all up into the consolidated part Rob, as you know, it bears up in slightly different ways. And for us, really what it means is inventory synergies.

So when you look at our guidance, you will see that we have upped our gross margin expectations from -- to low 50s to the mid 50s to possibly even 60%. And a lot of that has to do with -- there has been some early investing in the schedule, as we look to launch and hit the ground running.

But what we are trying, that will certainly bear out and perhaps be a little light. But in this particular year, we think that that conservative range is sort of 5% to 10% incremental margin, that would cover our cost synergies.

Great. Thank you.

And one other one if I may; the headlines with respect to the Great Britain campaign are impressive practically. Is there a lot that it can do in terms of opening doors for you?

Yeah absolutely. I think that's the law of -- our team is, we feel extremely good at that sort of grass roots marketing campaigns, and that is led by Peter Byrne, who has -- in past has been at places like HIT and FOX.

In the case of HIT, he was there when Thomas went through its bloom. So we are drafting off of his experiences, and certainly in the U.K., those sort of early efforts are certainly paying dividends, and from a global perspective it was a great thing for our buck.

I don't want to sort of pre-disclose any other campaigns that our team is developing, but other than to say, lots more to come, stay tuned.

Okay, great. Thank you very much.

Thanks Rob.

Yeah. Thanks very much.

Good morning guys. Maybe first, I was hoping for you to give us an update on where you are with SVOD, maybe I missed it in the MD&A, but just wondering if you could give us an update on revenues from YouTube and I don't know if CCTV is included in there?

Yeah. CCTV has been a soft launch, so there is very little in there at this moment, and it would only be up till the end of June, but whatever amounts would be in there.

I mean, what we have seen Haran, and thanks for your question, allow me to clarify, as you have seen in the past, two years ago, the YouTube revenues for us were pretty significant, when it comes to a percentage of overall distribution revenue, and in terms of what's happening in -- you'd recall perhaps in past calls, where I've said stay tuned, and we think there is other platforms that are going to also either meet or perhaps exceed YouTube and one of those ones for has certainly been Amazon. And so, it sort of felt inconsistent for us to sort of be highlighting that one in particular, so we have sort of started to Group those whole -- all of those revenues in a sort of digital category.

And what I would say is that, that plus everything else in terms of the digital side, whether it'd be the SVOD or let's call it the premium service that you have on Amazon, which is free, if you want to be served ads, and if you don't want to be served ads, you pay the prime service and you get sort of fewer ads. There is all sorts of expense, and so as a result of that, we sort of decided to go away from individual disclosure.

I think there is some general guidelines that I am just looking at here now. Looks like the gross revenues for YouTube for fiscal -- this fiscal Keith?

Yes.

Was about C$12 million, 77% about over last year, of about 6.5. But going forward, you will see us probably group those with other digitals and try to create a little more clarity into those streams.

Okay. That makes perfect sense, Dana.

I wanted to give you an opportunity to maybe comment on the polled equity offering I guess, and really what's more interesting for me is going forward, obviously lots of sort of corporate development opportunities, whether it's JVs or acquisitions, and how do you feel about sort of where you are in terms of the cash position to pursue these acquisitions?

Thanks for that question. I mean for us, it was really a matter of -- we had the demand for the stock at the last moment, unfortunately the price of the stock on the day of pricing that crushed below a level that we felt was acceptable and fair [indiscernible] So we pulled it.

That was a decision at that moment, and certainly not one that we regret, because obviously we feel over the summer, we have had some tremendous conversations with a lot of the accounts we have seen and a lot of them have picked up stock, we believe, over that period. So we are gaining traction in the U.S., and so we are looking forward to possible futures.

I mean, what I'd say in terms of our access to capital, we still think its extremely positive, the market conditions for us, and as opportunities come forward and we qualify for those opportunities, we feel -- if we didn't give access to capital, whether -- be it from a debt market or an equity market. Its there for us, and so, nothing specific in the works, but given our track record of being very inquisitive, I would assume that we will look to do a few deals, as we move forward here, and as we do, we will assess what the best fit for the capital is.

That's great. Maybe last one, Dana, if I may.

With respect to Teletubbies, obviously you are already recognizing some minimum guarantees in your M&L revenue. This is a big brand, so we are seeing a good pickup on the broadcasting side, and from a licensing perspective.

I am interested in your thoughts on kind of the timing on when -- when is the optimal timing to go deep into sort of the retail space with merchandising? I mean, its probably -- you want to wait until the brand has kind of had its time to develop?

I am just interested in your thoughts?

Yeah exactly. The timeline of these things is, that you can't rush them.

You have to -- it’s a very tricky scenario. First of all, that's a content that connects to kids in deep and meaningful ways, and we think we have that, we have that with our rebranding.

You then have to have it on the proper channels, and in some territories that is linear broadcast. The U.S.

for instance, is still a key territory for linear, and then other digital platforms in various other territories, are also emerging as key. So once you have it on that, then you look to -- that is essentially your advertising, for a lack of better word, for your licensing campaign.

So you got to build the awareness within the territory and then have the toys on the shelves when the awareness is hopefully starting to build. For us in the U.K., I will use that as an example.

We feel that, that won't be until next Christmas, sort of 2016, which would be in our fiscal 2017. So you will see that we have increased our guidance for 2015 for M&L, and we do expect to pick up as momentum builds on these brands.

But really to be frank, we are not producing Teletubbies for minimum guarantees, we want royalties for years to come, and these brands tend to have a cycle of -- much longer than live action and in the live action world, brands tend to be seven to 10 years in the animation world, that could be as long as 15 to 20. And so we are unbilled, we are early days, but the momentum is building and stay tuned.

But from a granularity perspective, its probably 2017 or 2018 [indiscernible] the big years.

That's great. Thanks very much.

Thanks Haran.

Hi guys. Thanks for taking my questions.

I just got a couple of quick follow-ups, and then I think a picture question. Just on the last comment you made, Dana, live action seven to 10 years, animation has a shelf life of 15 to 20.

But you have been commission through Family some more live action and drama-based content. How do you see the mix of this going forward, and any other differences in economics that we should be --

Yeah, that's a good question. I think as we look to expand and grow, its logical for us as a -- we believe, as a key content provider to go into that live action space.

Its not one that you should be afraid of, its one that we should embrace we feel. And one thing that you can do, in terms of live action to extend that brand, as you have seen in the adult side, sort of CSI world or the Law and Order world, is to continue to produce new series.

And Degrassi for us is a great example of that, where we are now into sort of the third, at least, version of the series, and The Next Class, sort of with brand new life. So that's how you can continue to extend that brand, in the case of CSI, I believe I saw a note saying that it's wrapping up its 15th season, and that's going to be its last.

So you have to build it through awareness, and so that's a key area when you think of focus and so on, that we are in a position to take advantage of, so we are going after it. Obviously, because we own Family as well, it gives us great access to the resources related to that, and to build those right.

Having said that, we have said from the beginning, you want a diverse portfolio of rights. Animation has certainly been our strength, and so we'd like to continue to build on that.

But having a lot of action piece, we think its very interesting in this world of OTT services. Also, you will note that we own a studio through our Epitome transaction, the Degrassi studio, and obviously that allows to vertically integrate to just continue to reduce the overall CapEx requirement on our inventory.

And that vertical integration will continue to sweep, we believe, to results in further margin expansion going forward.

Okay, great. And just -- I mean, does it tie-up more working capital to do and you got more -- over short term period out, when you start delivering or how does it come to this?

Yes, I mean, to some degree, because the budget is a slightly higher. But I think -- you have to think about it moreover from -- is your proprietary production growing, and ours is, and so there is a greater use of working capital.

But again that, we believe, as we have been saying for quite a while, is in the [indiscernible] of time, that gets repatriated, as it starts to collect the tax credits in the various contracts. So you are always in the state of either expanding production or reducing production.

When you're reducing production, your working capital starts to swamp back in, and right now we are going to [indiscernible], so certainly that will continue to be useful, at least the next few years.

Okay, great. And then just a bigger picture one.

There is a bit of doom and gloom last quarter coming out of the U.S. linear industry with cord cutting and the fear of changing dynamics there.

From your perspective, its one of the most mature, over the top markets. But what are you guys seeing in terms of changes in that market?

What are your observations or what do you think is coming down the pipe?

And just to clarify Deepak, was your question related to the linear side or the OTT side?

Well just the overall U.S. market.

Given it’s the most mature, over the top market and there is doom and gloom being put in place of linear, what are your thoughts there?

We've felt for quite a whole, obviously, media is very cyclical. Its driven by technology; the latest technology of course is digital, and the U.S.

typically leads that, mainly because it has the greatest access to capital. And so our theory from the beginning is that capital agglomerates to various parties and then monetization models emerge.

Obviously, we are well into that cycle in the U.S., probably half way through the gain. Halfway through these cycles, leaders start to emerge in certain territories and that's certainly what we are seeing.

We haven't yet got to that next base, which is sort of -- let's call it the third base, which is the consolidation phase, and we don't feel that that's there for another two or so years. And so we still feel that there is pricing expansion possible, because we still feel there is supply-demand imbalance, which obviously to our growth and others, some of that is being filled, but you're still seeing -- and to that end, you're still seeing Amazon lately and Hulu, Google, all talking about putting much more capital into the content space and particularly into the kids space.

And you're still seeing brand new VOD services come onstream, like HBO came on a month or so ago, and we are seeing more, and on average, it has been about one month. So in terms of the new players, that hasn't subsided just yet.

Okay. So no change still, tracking along with the cycle and still lots of upside to go?

Yes.

Okay. Great.

Thank you so much.

Good morning gentlemen.

Good morning Bentley.

Given the upside, I wanted to talk about Inspector Gadget. That was hyped up as a property for you guys a couple of years go, and now it has hit the market, wondering how the early traction is going for M&L?

So yes, thanks for that question Bentley, and it allows me to -- it didn't come up in our bullet, because its one that's probably a little bit further down the road for us. And just to remind everyone on the call, Gadget is an exclusive deal in the U.S.

for Netflix, and so like all of our information, although anecdotally, they seem extremely positive and we have commissioned the second season, which is always the key metric. They still very much keep their cards close to their chests.

However, having said that, you recall we did a number of Cartoon Network deals throughout the world and the ratings on Cartoon Network are extremely positive. And so the relaunch seems to be going well.

The thing about Gadget of course, is that its aimed at boys, which is typically [indiscernible] boys. Although, obviously there is a strong female character in Penny as well.

It is -- boys sort of 6 to 9, and Gadget although, there is a [indiscernible] early into Gadgets, he is -- let's call it, a bit of a bumbling fool himself, not necessarily aspirational. So it’s a little bit -- always has been a little bit of a tougher sale, a little bit of slower cycle into the merchandising and licensing role.

However, having said that, over time, it has built great fan base and great traction. And so, we would expect that to develop over the coming years, just at a slower pace.

Okay. And then one more, production in the quarter fell short of where I was expecting, and I think where you guys were expecting.

Wonder if you could explain why that might have happened, if deliveries were postponed or something along those lines?

You were stating -- I think you have talked about production deliveries, I think that was your question.

Yes indeed.

Yeah okay. So I mean, the quarterly specific -- very hard o read into any one particular quarter.

Sometimes you get timing of deliveries as always the potential thing. You will recall on past calls, we have always said, look at the annuals, judge us on the annuals and you will see the growth patterns are there.

And you can see, we are guiding up again for next year. So just more of a timing thing.

Okay. That's it for me.

Thanks.

Thanks Bentley.

Hi. Thanks for squeezing me in.

Just a quick question on my end, Dana. Just when we think about the demand for kind of linear production?

I know traditionally, it has always been very Canadian focused. I was just wondering if you see any -- how you see kind of demand for your content evolving over time from a linear perspective.

Will it be shifting more to international markets, or do you think its still going to be fairly domestic in nature?

I think its definitely shifting towards a more global field, and that's sort of how we are commissioning all of our series at this moment in time. Even though, obviously beyond the family channel and very much -- I look forward to programming that for Canadians.

We have always looked at it from global. So Degrassi is a great example, which is obviously -- lot of Canadian stories are laced within, but its sort of -- it does play very well [indiscernible].

In terms of demand for linear production, its still ironically growing. Its not growing at the pace that digital is for sure, and that's sort of typical what you see in cycles in our view, and that as the technology -- digital creates new markets and new players come in.

You have the existing decide to either die or fight and nobody likes to die, so they start to fight. So we have seen this in various examples, and Caillou is a good example of that in the last year or so, I guess.

We have seen some of the linear services paying up to a degree, much more significant than they have in the past. And certainly, we are seeing that in some of our existing brands, Teletubbies for instance, we licensed to Nickelodeon and a very competitive -- or Nick Junior, I should say, very competitive environment.

So we are still seeing that demand. Obviously, we think the large portion of the growth is going to be coming from the digital side, but that linear demand is still there.

Thank you very much, and maybe just a follow-up on that. Kind of when you think about your own mix in terms of leveraging the family channel, is that a place where you're going to be focusing more -- I know, I think you said in the past, you are going to be focusing more on, but is it going to be almost 50% family, and then 50% non-family channel commissions, or how should we kind of think about that?

Well, I think in terms of the -- remember, there is three channels that we have. So there is Family Junior, and that's our preschool brand, obviously that will be our Teletubbies, Twirlywoos and Yo Gabba Gabba!

and many more going forward. So that's an area that we have had leadership in for quite some time.

So we'd like to continue to build off of that one. What's key there, is obviously the merchandising and license potential, so that plays very much into our expansion there for consumer products.

And then you got the middle channel charged, which is typically more animation and for us, we have been filming that up through some of our recent commissions and -- but also, our existing slate, like Slugterra. So we feel that those are very much -- animation and also will have global demand.

And then finally, you have got Family, which is predominantly live action and we will look to feed in, as we feel the right mixes of our own content, and -- but all the while, focusing on those global brands, things that we think will sell outside of Canada. We have felt for quite some time now, that it’s a huge advantage that we have, competitive advantage to offload the vast majority of our CapEx, and there is no reason why we cannot develop content that has global appeal and sells in multiple territories over multiple platforms, and we have had obviously great track record of that in the recent past, and that's what we look to build on.

Perfect. Thank you very much.

Thank you, Robert.

Hey guys, just a question about -- I guess to go back and talk about the China opportunity; can you give us a sense of, maybe how much of that you're baking into 2016 guidance? Do you have some sense of what that will look like into next year?

Yeah. We have built some small amount in there Tony, but that certainly could be considerable upside for us.

It’s a little too early days to be too aggressive on projections related to that, I mean, whenever you have an emerging market, particularly one that's largely in the control of others, you have to be a little cautious. So that does represent some upside.

There is certain growth -- there is a little bit of growth in that guidance.

Okay. Perfect.

And then -- I apologize if you already addressed this, but DHX TVs revenue looks like guidance is a little bit lower. Can you outline maybe some of the big drivers there?

Is it mostly kind of, in anticipation of how you are seeing BDU fees, or is it audience size, advertising? How do you guys kind of look at the guidance and put out this year?

Yes. So the guidance is based on our conversations, generally with the BDUs.

Obviously to this point, the channel has been, I think 87% to 90% of subscriber fees, and so those we are building in, comfort level within that range of where it could go. But having said that, we think there is lots of opportunity to potentially add advertisements to the channel and channels.

So there is upside number one. Number two, we think sponsorships are a big growth potential for us, given our connections with some of our live action initiatives, and you will see some of our new expectations going forward with things like the Big Ticket concert and The Next Step and a number of other series.

And so we think there is a great tie-in there between the linear and the new ancillary rights potential. So those are growth side and certainly upside.

Excellent. Okay.

Thanks guys.

Thanks Tony.

Thank you very much, operator, and thank you everyone for joining today. As always, if you have further questions, please feel free to reach out to us or consult the Investor Relations section of our web site at www.dhxmedia.com.

Thank you.