Q4 2020 Cinedigm Corp Earnings Call
Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
[music].
Ladies and gentlemen, thank you for standing by welcome to the Senate Encore financed or financial 2024th quarter and full year earnings conference call. At this time all participants are in listen only mode. After the speaker presentation. There will be a question answer session to ask a question. During the session you will need the press Star then one on your telephone.
Please be advised that today's conference is being recorded.
Your acquire any further assistance. Please press Star then zero I would now like to handle conference over to your speaker today Ms. Jill Calcaterra Executive Vice President. Thank you. Please go ahead.
Good morning. Thank you for joined yesterday on our fourth quarter fiscal 2020 earnings conference call.
Starting in today's call, our Synerons, Chairman and Chief Executive Officer, Chris Mcgurk.
Correct.
Okay.
Officer in general counsel and present or cinema equipment goodness, Gary Loffredo.
Before I hand, the call over time and Smith. Please know that on this call certain information forgotten. It contains forward looking statement.
These statements are based on management's current expectations and are subject to risks uncertainties and assumptions.
Potential risks and uncertainties that could cause the company's business.
Actual results could differ materially from these forward looking statements are describing the companys periodic reports filed with the FCC from time to time.
All the information discussed on this call is as of today July 620 20.
Got it I'm does not intend and undertakes no duty to update future events or circumstances.
In addition, certain financial information presented in this call non-GAAP financial measures and now I'd like to turn call over its Chris Mcgurk Huh.
Thanks, Joel and thanks, everyone for joining us on the call today.
I'll start with an overview of the business, then turn things over to Eric the architect of T. T streaming business, which has now clearly the center piece of our company and our growth story.
Eric will provide a more in depth review of all the key developments in that business and then he'll turn things over to Gary for a more financially oriented review.
After that we'll take your questions.
By every measure soon and I put together a remarkable series of accomplishments over the last year.
Including the company's business transformation by solidifying our unique position as a key player in the exclusively growing O T T streaming business, here's what we accomplished.
First we launched several new screening channels, including common <unk> comedy dynamics in bamboo to build our portfolio to 16 premium streaming channels, either launched or under contract to watch.
We will soon be at 20 channels and plan to get to 30 in the next 18 months. This gives centered on a large meaningful in growing channel share on the program guide for every key streaming platform and device. Most of these new channels will be set up in a similar fashion to our recent Bob Ross all three.
The media, which is owned by Liberty Global in discovery networks team whistle and lie by like channel deals, where we partnered with established branded entertainment companies that bring huge amounts of content to the table and then we launch with our major distribution partners like Roque and Amazon and to be in Samsung.
That's a very high margin high return business for us with little risk.
We have a robust deal pipeline at these potential premium new partners in channels now, though because we have clearly established cinedigms as the go to independent streaming company that can employ our stated the art proprietary match for technology and enormous streaming distribution platform and device reach and a huge digital.
Content library to help on screen screaming channels across the entire global TT Echo system, we can do all that quickly.
Cost effectively and with almost ubiquitous distribution potential on every device and platform the quality of the business partners reflected in our new channel deals clearly demonstrates that the entertainment industry now understands the advantages of doing business with Cinedigms.
The exploding streaming space.
Second in the last year, we generated explosive growth in our AD supported streaming business segment estimated to be Btwenty 7 billion dollar market in the U.S. alone and growing it's 30% of year.
We grew our AD supported viewership from essentially zero viewers 15 months ago to 4.5 million viewers last October to 9.7 million viewers in March that was an increase of 116% inside much.
Between the end of March and the into May we increased our viewership to 13.2 million viewers up another 38% in just two modes virtually tripling viewership over the trailing seven months.
Our AD based revenues last year were up 466%.
We are generating visa explosive results in AD supported viewership growth of our premium channel portfolio and are extremely strong distribution on connected Tvs, where we have deals in place for embedded channels with key Oems and streaming device technology companies like Samsung Vizio wrote COO and view.
Obviously, the stay at home environment. We currently find ourselves and has also fueled this growth tremendously.
Reading a once in a generation catalyst that is vastly accelerating the dramatic and permanent cord cutting consumer shift to streaming that was already underway.
Third.
In the last year, we dramatically expanded our distribution reach both in the number of streaming devices and platforms for our channels and our geographic footprint.
Through deals with Samsung Vizio, Amazon I M D be free cash so that TV and viewed among many many others. We now have distribution reach into over 670 million devices and our rapidly expanding our geographical footprint overseas.
Fourth.
Over the last year, we continued to be an effective go to distributor of independent film and TV content for premium brands like Hallmark showed factory in the NFL.
We have been particularly focused on aggregating and distributing thousands of titles to the key streaming platforms like Netflix and Amazon and who given the huge demand for premium content. We are seeing from both existing and newly launched platforms that need to high volume of fresh digital content to keep pace competitive.
And keep up with a record cord cutting now happening.
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As expected in this environment, we generated tremendous results in our digital licensing business in the first quarter of fiscal year 2021, which just ended.
We expect some news on that very soon.
Fifth.
Our financial results for fiscal year, 2020, clearly began to reflect the significant strides we have made to rapidly expand their streaming business.
As we transition away from our legacy digital cinema business, which we expect will be largely phased out over the next two fiscal years, we're clearly scaling up to be a must have portfolio of channels technology content and services for every streaming platform.
Our momentum continues to accelerate and we're moving to become a pure streaming company with sustainable profitability.
In fiscal 2020, we grew our OTI ti revenue by nearly 60% and improved our adjusted EBITDA for our core business by $6 million are almost 80% driven by the explosive growth in our channel portfolio viewership and global distribution reach that I just described.
Reflecting all this in the fourth quarter, we generated a profit and our core business streaming and content distribution, where our adjusted EBITDA improved by $3.5 million or up 125% over last year.
We also streamlined our cost structure tremendously during the year as we continued to transition from our legacy business to the much more operationally efficient high margin streaming business, we reduced total operating costs by over $15 million and much of the overhead savings and the total have yet to be reflected on a full year basis.
Which should greatly benefit or fiscal year 2021 results. In addition, we close many significant new deals. After February 2020, with the likes of team whistle, Bob Ross viewed and Amazon MTB. Among many others that were not reflected in our 2020 results at all.
And we'll generate revenues and profits in the 2021 fiscal year. We're currently in.
We feel extremely positive about our drive to fill your profitability in fiscal year 2021, and the prospect of sustainable profits beyond as well.
Finally in the last year, we made significant progress regarding China.
Where our long term goal is to distribute content and streaming channels bilaterally into China in the U.S. by far the two biggest entertainment markets in the world with over 200 billion and combined revenues in that segment.
We believe over the long term this initiative will create a unique competitive business opportunity and value proposition for the company.
To that end last year, we launched the Chinese language film based you know called bamboo into the U.S. marketplace. Additionally, during the last quarter of fiscal 2020, we closed the transaction to acquire approximately 26% or the outstanding equity of leading Chinese entertainment companies start rise media listed on the home.
I think stock exchange in an all stock transaction.
This investment strengthened our balance sheet and more importantly gave us a boots on the ground content streaming and distribution partner in China. This arrangement will give give us the unique ability to directly monetize content and launch streaming channels in both China and North America.
Now, let me reinforce that our overriding business focus now is our streaming business been taking full advantage of the explosive growth we see there.
However, we also believe our unique positioning as a catalyst for monetizing content and launching streaming channels into China by creating a gateway for Hollywood in Europe through start rise media could be a significant phase two value creation opportunity for the company down the road.
In summary, we've had a remarkable year at centered on.
Solidified our position as a unique independent streaming company rapidly building on our premium channel portfolio, and our screaming device platform and geographic reach while delivering thousands of hours of digital content to the entire streaming echo system, which continues its unprecedented an explosive growth.
Our immediate and long term financial prospects look right.
Positive fourth quarter financial performance are massive increase in viewership are significant cost streamlining and all the new high potential channel in distribution deals. We closed after February 2020, underscore that we're on a path to profitability in this current full fiscal year that will be sustainable.
Now, let me turn things over to Eric for a deeper dive into our streaming business Eric.
Thank you Chris.
First I want to discuss the current macro environment for stringing entertainment once the generation transformation are both the pay television and the 70 billion dollar.
TV advertising space.
One of the biggest driver is that impacts our business the acceleration of cord cutting.
In 2018, just 4% of households cut the cord last year that number rose to 7% and.
And according to research firm convergence research that number will reach 9% and may even trend higher this year.
Even after subscribing to general Entertainment services like Netflix Amazon Prime or does the plus consumers still have ample savings and continued described and multiple special interest channels like Cinedigms, Contv and Dove channel and many others. This trend will continue to accelerate as companies like Comcast dish, Apple Amazon and others.
Embrace adding these channels the platforms.
Next we are seeing an unprecedented shipped by consumers the streaming purse consumption profile.
At the Internet advertising Gardner Newfronts. This Jim Samson noted that 58% of TV customers spend the majority of their time watching stream video.
We think this example, exemplifies the rapid broad shifts the streaming and expect this percentage to continue to accelerate over the short term.
Another key factor is the rise in smart Tvs. This next major battleground streaming wars.
Living room has always been the perfect environment for streaming given the much higher degree of engagement versus mobile devices. However, just a few years ago Smart Tvs are not very smart outdated user interface is limited content and apps and very high prices today spot today Smarttv he's had become usable fast achieved with fantastic.
Content options.
Many taught manufacturers, including Samsung LG and Vizio.
Baked free AD supported linear channels or has there node fast channels directly into the TV operating system effectively marketing a free basic cable alternative with every television sold.
With more than 250 million sets shipping annually worldwide. It is easy to see how this business scales to hundreds of millions of users in a very short amount of time.
As consumers choose free alternatives legacy cable and satellite audiences continue to record decline.
Advertisers will accelerate the reallocation of more than 70 million of North American TV AD spend to streaming services and said I'm believes as much as 20 billion could shift each year over the next three months.
Given these market dynamics, there has never been a greater demand that consumers as well as Oems and platforms for channels and in particular quality AD supported channels.
In addition, the financial profile of the AD supported business model extremely appealing as is less capital intensive repairs less upfront and ongoing investment in content compared to the subscription video on demand business model and it continues to utilize and leverage our existing library of content.
We believe that transformation currently underway as the tectonic shift much like the one that happened in the print advertising industry more than a decade ago for tens of billions of advertising dollars ship, the digital never to return to print and forever transforming the ad landscape.
We think a similar transformation is underway for the television industry and believe there equates to build a substantial business by becoming the leading independent provider streaming content channels and services and the entire ecosystem.
Our revenue model focuses on four key pillars of revenue generation.
And I talk about them now.
First we license or 32000 title digital film and TV library to the broad access system of more than 200 streaming providers in the U.S. and more than double that internationally.
This includes large scale subscription companies like Amazon Netflix as well as AD supported companies like to be clear, though.
Second we provide a basis for subscription streaming services Contv Dove channel Docurama contv enemy direct to consumers the apps as well as the broader ecosystem offering add on channels through providers, such as Amazon, Comcast Roque dish and others.
This allows us delivered to deliver subscription services scale, while avoiding the high cost of customer acquisition marketing and dramatically reduces our opex.
Next we distribute a portfolio of 16 fast linear and AD supported channels that the focus on distribution with large scale partner platforms.
Six of these channels, we own and the remainder are in partnership with third parties. Our go forward focus will be to partner with major media companies such as Chris mentioned, all three media a joint venture of Discovery Communications Liberty Global as well as American public media or the largest public television companies.
Lastly, we operate match point software platform that enables major media companies do all these things I just described essentially as a cloud based operating system for entertainment companies that need to build streaming apps distribute content in channels together critical business intelligence.
After several years of successful operation, a massive operational efficiencies and cost savings cinedigms.
We are now selling the software as a service commercially.
To fully realize revenues from these areas cinedigms over the last year embarked on a four stage plan.
Acquire and launched channels secure distribution build the audience and scale monetization.
First let's discuss our results in acquiring launching channels at the beginning of last fiscal year, we had just four channels and operation.
By the end of the fiscal year, we had six slide and 10 under contract.
Subsequent to the close of the fiscal year, we launched the Bob Ross Channel, which has quickly become one of the company's top performing channels a favorite of consumers on Samsung Roka as of last week to be.
Currently we now have 16 channels under contract, including deals SPR International a global lineal linear channel operator 42 million subscribers.
And a global Beach digital media company focused on live entertainment.
Why next slide.
The industry's leading live music video streaming platform and operator of streaming service Slacker radio.
Finally, we didn't deal team whistle fast growing sports lifestyle Entertainment company back by shareholders, including Discovery Communications Snap and Jeffrey Katzenberg Wonder code.
Our short term vision is to grow this to a portfolio of 30 AD supported networks over the next 12 18 months with a focus on continuing the trend of partnering with major media engines.
On the distribution from our focus over the last this year was to focus on expanding our addressable footprint.
This footprint is similar to the strips and cable households that it reflects the total potential reach over time of our properties.
Over the course of the fiscal year, we expanded addressable reach of our footprint with 310 million devices globally.
Our focus was one was on expanding into areas linear platforms for our fast channels as well as connected TV platform providers, both domestically and internationally.
On the fast channel front, we added or expanded with key partners, including Samsung TV, plus the broker channel Vizio, Comcast zummo and many more.
We also completed deals with three major smart TV platform providers viewed box on decent dramatically expanding our international footprint and growing our international smart TV penetration to nearly all major commercially available smart Tvs.
Our focus over the next 12 months will be to grow our domestic base between 50 to 60 million devices. As we continue to partner with telco cable companies broadband providers as they expand their t. offerings. We all we will also focused on extending our base in Latin America in India to markets with rapidly growing basin smarttv consumers.
[noise] leveraging our addressable footprint growth, we began to focus on growing our audience. During the last fiscal year with a special emphasis on our core growth area AD supported users.
Over the course of the fiscal year.
We grew our AD supported business our user base from approximately 2.2 million monthly active users. The 9.7 million monthly active users an increase of nearly 341%.
This was heavily driven by our focus on growing fast linear users.
Linear adoption can scale incredibly quickly get to the embedded nature of fast channels. The native operating system of smart Tvs, there's no lack to install and our channels and literally a click away on the remote.
This embedded nature has been instrumental for companies like ROE cooling others to benefit from scale user growth tied to hardware shipments with minimal marketing costs incident on the seeing a similar net result, as more and more devices shipped.
As we expand this approach to an even broader selection of smart Tvs on global basis, we expect to continue to see a growth trend that will only be accelerated as we add new channels to our existing deals.
This figure is a strong proxy for sustained future revenue growth and a key driver of implicit valuation of the company.
We expect this momentum to continue into fiscal 2021, given the clear line of sight, we have into a massive millions of additional viewers that we believe will approach 15 million rather quickly.
Last but not least scaling monetization is the last phase two achieving considerable and sustained revenue growth over the coming fiscal year and beyond.
While the number of channels addressable footprint and audience are the predecessor requirements of this growth providing an adequate base demand partners is critical.
Due to the rapid growth of our user base has been it's viewed I'm happy to report that demand for fast very adamant inventory has never been higher even amidst the current environment.
At the beginning of our fiscal year, our audience was still nascent and we had just one demand partner to the rapid rise in hindsight consumption, we were able to close 21 demand partner deals, including major partners such as 18 Zander rise in media Beach front media and many more as our growth continues subsequent to the fiscal year end, we had signed.
Her entered into partnerships 11, additional demand partners, bringing our total to 32 partners.
We also signed a deal that tech companies spring serve and publica to improve our AD Tech stack given these improvements we expect material improvements in fill rates and CPM in this fiscal year.
As our audience and consumption continue to scale, we anticipate direct AD sales partnerships to further maximize our revenue base.
To sum it up in 12 short months, we increased our channel footprint by 67% more than doubled our addressable device footprint scaled our audience, 341% increased watch time by 77% and grew overall revenues by 59% driven by an increase in AD revenues of nearly 468.
Percent.
Given the overall industry trends, our roadmap of new channels platforms and monetization partners. We expect these substantial gains to continue to drive increased revenues and a profitable growth trajectory over the coming quarters that will substantially increase shareholder value.
We're excited to be a central player in the evolution of entertainment.
With that I'll now turn call over to Gary for view of our financial results.
Thanks, Eric.
As reported in our 10-K for fiscal year 2020, consolidated revenues were 39 point Threemillion.
As expected overall revenues declined as a result of the contract the decline in our legacy digital cinema equipment business.
The deployment contracts in this segment of our business provide for the payment of virtual print fees for up to 10 years from the date of installation of the digital projection system.
And therefore continued to move towards the end of the respective terms we have planned for this expected roll out.
Expected roll off a virtual print fees revenue.
Reflecting the shift in our business revenues for our own TT streaming and content distribution core business were up 31% over the last year.
As Eric discussed the streaming channel revenues have increased about 59%.
The most explosive growth was in our AD supported OTI tea business, where revenues were up 466%.
We had shifted our business in anticipation of this trend the trend is continuing in the first quarter fiscal 2021, starting in April 2020, as cord cutting accelerates even more.
Due to the current stay at home environment.
The total operating expenses decreased in our fiscal 2020 to 43.6 million, which has a decrease of 15.5 million or 26% below fiscal prior fiscal year.
This is primarily due to our focus on cost rationalization and expense cutting efforts.
We have and continue to reposition our infrastructure to focus on growing and high margin LTT digital streaming business.
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So.
<unk> expense decreased 29% to 7.2 million for fiscal 2020, compared to 10.3 million last fiscal year.
The current interest rate on our mean east West Bank credit facility is 3.75%.
The decrease in net interest expense is primarily the result of our active reduction in out then that balance.
Our total outstanding debt balance as of March 30, Onest, 2020 was 49.9 million or 24% lower than it was 12 months ago.
Our total outstanding debt balance as of June Thirtyth 2020 is 44.8 million.
As a reduction of over 20 million for the debt balance as of March 31 2019.
The net loss attributable to common shareholders for fiscal 2020 was 15.1 million a 9% improvement to fiscal year 2019.
The improvement is primarily the result of higher margins as we shift our business toward OTI to streamline our efforts to reduce and streamline our cost structure and lower interest rate interest expense on a much lower debt balance.
For fiscal year 2020, adjusted EBITDA was $6 million compared to 11.7 million in a year ago pure.
The decrease was due to the expected reduction in the legacy cinema equipment business.
Full year, adjusted core streaming and content distribution business, EBITDA improved by $6 million or 76%.
Importantly, Q4 2020, adjusted EBITDA for the core streaming content business was positive $700000. This is a 3.5 million or 125% increase from Q4 2019.
These are significant improvements trending toward profitability for full year fiscal 2021.
From a liquidity standpoint, we have taken several steps to improve our liquidity position position.
Our credit facility at East West Bank out an outstanding balance of 14.5 million as of March 31, 20 Twond.
And that balance has decreased to 10.2 million as of June Thirtyth 2020.
For context. This balance was 18.6 million at March 31, 20 Nike.
We also recently executed an amendment with east West Bank to extend the maturity date of this credit facility June Thirtyth 2021.
On April 15th 2020, the company received 2.2 million from East West Bank pursuant to the payroll the paycheck protection program of the care side.
This loan matures on April 10th 2022, and accrues interest at 1% a year.
We intend to see forgiveness for all or a portion of your bar.
The Companys second lien notes had an outstanding balance at 8.2 million as of March 31, 20 Twond.
During the last 12 months ended March 31, 20, Twond them. The company paid down 3.4 million of the outstanding second lien secured loans.
Following another pay down agreement with the second lien lender June 2020, the outstanding balance on the second lien debt has been further reduced to 7.5 million as of June 30, 20 Twond.
On may 22nd we close the registered direct offering 10 million, Rick <unk> 6666 shares of common stock.
Priced aftermarket under and I think rules for gross proceeds of $8 million.
From March 31st 2019 to June Twond, Thirtyth 2020, we have reduced our bad debt balances by over $20 million.
While our financial results for the 20 this fiscal year.
Good luck substantial improvement over the year from March 31000, a 19 to March 31 2020.
We have made incredible progress closing new chunk deals and distribution deals since February 20, Twond Street that are not yet reflected in our financial results, but set us up for future quarters.
In addition, the consumer viewing patterns have shifted dramatically and permanently to streaming as Eric mentioned accelerated by the current state home environment.
We are uniquely well positioned to benefit from that shift.
With that I will turn the call back to Chris.
Thanks, Gary.
Clearly this was a pivotal year for senator.
We made tremendous progress in the OTI t. space, expanding our channel portfolio growing our distribution footprint and increasing viewership exponentially.
We did this through a series of agreements with real and establish growing partners like Roku, and Samsung and Amazon and Vizio and to be in all three media and the Bob Ross of state.
In many many others.
And we continue to work through a real and robust deal pipeline with many more these established brands Oems telcos and other key entertainment industry players that recognize the advantages cinedigms brings to OTI Ti in our channel expertise our device reach or match point technology.
And our massive digital content delivery capabilities.
Has already demonstrated by our profitable fiscal year, 2024th quarter core business results.
We expect that all of this will drive us to profitability in this full fiscal year and then sustain profitability.
That.
There exists an incredible level of energy and growth in the streaming market space and we are fully engage to capture a meaningful share the market and fully capitalized on the huge opportunity in that space.
But the entire sending 19.
There's work so hard to create for the company over the last few years.
And with that we'll now take any questions you might have operator.
Okay.
Thank you as a reminder to ask a question you will need to press Star then one on your touched on telephone to withdraw your question from the Q. Please press the pound key.
Please standby well, we compile the culinary Ross.
Our first question comes from Dan Kurnos with a benchmark company. Your line is now open.
Thanks, Good morning.
Eric can I go back some of the comments you made just on fill rates since TPN is obviously it was challenged to starts.
In in its co the environment and we seen kind of a rapid recovery how close are you getting back towards.
Normalized levels and then maybe you can just talk a little bit about what you're seeing in July either on that front or from an M&A perspective.
Sure.
Yes, so a first I'll address your point on Cpms.
Yeah, I think we're pretty close to fully recovered I think we're at about 90% to 95% of our pre coded CPM rates.
That spend as I mentioned on the call earlier in the call.
Adding in quite a lot of demand at this point needs more competition and then we would normally have had a for the same amount of slots, which means we can charge higher cpms. So that's been helpful. Also I think the macro environment.
Where TV dollars are shifting into UMTP is helping to bleed.
He rates at to some degree so I think.
Overall, I think as we start heading into Q3 and then the busy Q4.
I think.
Even with the impact of co bid.
He is still seeing now expected to sequential year over year growth overall as a business. So I think that will be borne out in the cpms in.
In terms of our viewership our viewership continues to rise we haven't fully tallied.
Our numbers for June yet because we have to get data from third party partners, but June looks like we're on we're continuing the same trends going forward.
There there is a little bit of six cyclical nature in the summer.
I think we will as people spend more time outside of that may be less so this year.
That said, we are adding on have chance multiple additional channels launching which we'll all have a significant act.
On the user growth as well as you know you saw our announcement Bob Ross on to be.
Last week, so we're going to just continue to see the current properties growing and additional user base growth.
Inline with what we've been been seen so far nothing nothing is a leading me to believe it's going to be any different.
Got it very helpful. And then you know you guys have outlines the channel strategy here without getting more specific on explicitly the road map you know as you guys continue to add content I think the next logical question is when are you able to go back to the distributors and.
Have conversation about you know more premium placement and so how do you think those two falling HELOC staff and you know do you anticipate any near term benefits or is that still more of a long term battle as you kind of filled out the platform.
So we've had great. The team has had great success, securing a strong placement for our channels.
You know as I mentioned on the linear side first up.
No the amount of channels in the ACA system today is relatively small.
There's there's bad tops, a few hundred channels out there so unlike say the iOS or other app stores, where there's you know.
Tens of millions of choice is one click away in the linear environment. There's just a few hundred choices.
The Oems don't plan on adding.
You know hundreds and hundreds more.
But I think we're going to continue to maintain a large share of the dial so from that perspective.
We're getting tremendous amount of placement just by being just by being part of that footprint and the second of course is our direct marketing relationships at the various Oems.
Has been incredibly solid.
Take a look on Samsung.
Or just look on to be and you'll see the mounted attention, we're getting for Bob Ross for example, and some of the other channels we have.
So I think we're already getting that placements I think that walking the trend will continue to to improve even more as we bring in a bigger partners and we had.
Got it Super helpful. And then maybe just on the film side to the outpost is obviously outperformed everyone's expectations I think it's been sort of surprised winner.
Maybe you can just talk about the economic benefit there and then just what you're seeing in the environment for you know for more content, obviously on the channel side, you're looking to partner.
But just any any thoughts you can you can give us on sort of whats available I'm kind of what you're looking at how aggressive you can't be especially with production still kind of handcuffed at the moment.
Chris did you want to take that one.
Well, you're kind of about a role Eric So why don't you keep going.
Sure sure.
So at the outposts I think look I'm, a better and myself and I think the outpost as one of those homes that adjust that.
Resonates with people no matter, where you are on this on the spectrum and we think those the kinds of films that.
You know us as a company being being an independent.
It gets to take chances and risks on that you don't see out of the major studios anymore.
You know as as everybody is trying to make.
Films that are that appeal to all four quadrants and every demographic and they tend to get watered down and you missed films like this so we're proud to be a company that has the ability to bring films like the outpost and others in that in that vein to broad markets.
We think the economics of the film or leasing business are strong.
As has borne out by.
The results that were seeing a retail remains incredibly strong footprint.
As does in home rentals getting access to first run films and television series.
At home.
Yeah.
When you can't go to the theater is very compelling opportunity and I think we're going to continue to push those our transactional numbers for example show.
In the last quarter of shown the dramatic.
Upswing and I think that trend reflects people's desire to Washington, REIT, great New held at homes that they might have otherwise spent on theatrical though.
Page, if I could just to add to what Eric said.
My remarks, I talked about how we're focusing more and more in our base content distribution business and aggregating and distributing digital content, particularly given the huge opportunity right now with all the cord cutting that's going on in the and stay at home environment.
And we've seen some tremendous results over the last three months in that business.
You know in terms of our digital distribution revenues and we hope to report some some real positives in that area very soon.
Thank you.
Thank you. Our next question comes from Brian Kinstlinger with Alliance Global Your line is now open.
Great. Thanks Nice results in the screening business can you talk about how viewership in AD revenue Liveramp, particularly in the last few channel launches and then maybe if you could also go over the sales cycle in penetration timing you see into those streaming platforms.
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Sure.
So.
I think that's the key thing to note here.
Talk about partnering and launching channels with.
Larger companies bigger brands figure entities.
As the caliber of the caliber channels that we're we're bringing to market.
They mature much more quickly and they may result in a much faster cycle time to revenue generation than say a brand that is unknown takes a while to build up.
Or content that is.
Not otherwise essentially young consumers. So I will use if you take a look at Bob Bras for example.
That channel launched on Samsung.
In April.
We secure and we have sense added three additional distribution outlets.
As as including to be as recently as last week.
So.
As we look at those are so big core scale platforms that are really driving.
Are going to be driving substantial users in revenue.
We're seeing on the revenue rates and CPM rates.
A scale normally would take 30 to 60 days for demand partners to get familiar with the brand start to ramp volume.
We're doing a better job pre selling that in before launch and then working it up through the first 30 to 60 days. So we actually start to see a pretty rapid.
A rapid rise to our are.
Sort of our say CPM rate.
As well as the audience base, Bob Ross the Bob Ross Channel has.
As of today is as has the largest percentage of all of our channels in terms of viewership.
And that's with.
Less than 70 days in market and with only around.
Around 25% of distribution footprint, so I think thats that really kind of shows how quickly the cycle, which previously.
The cycle for us was quite longer.
But I think given we.
Reach critical mass on demand partners critical mass on the distribution footprint.
We have deals in place all these partners. So it's quite easy to get deals and amend our deals to bring the channel from New places. So I would say are.
Our sort of benchmark now is from launch to have from announced to launch. We're typically looking at about 90 days, sometimes less from launch to full scale monetization.
Probably within two to three quarters.
But we will but we're seeing that in some cases compressed.
Right.
Let me know if that's that yes, I will take rate.
Great and then.
You had a quick comment on it that maybe you guys could talk about the timeline you see and plan to ship from what's mostly a programmatic advertising model to a direct sales effort, which obviously had better economics.
Sure.
Well I think.
For us the direct sales model is attractive.
But you have that really have.
The appropriate amount of scale for make it cost effective.
So we think.
You know within the next 12 months.
Over the next 12 months to kind of bridge between us hiring direct salespeople I will likely partner with somebody who specializes in direct at selling you know.
A good example is if you look at one of our appears to be even to be when they launched in Australia.
Just announced last week, there, they're leveraging foxtel do their AD sales. So we think we can find a similar arrangement and in North America.
It could be one of our current partners.
We're evaluating other partners as well could potentially do that.
Great Lastly, you had some recent PR about next point recently can you just highlight.
The new functionality for that platform is and how it further differentiates you.
Sure well you know as we as we.
Look at the rapid growth of the streaming industry.
The sheer volume outlets I think theres now about 600 viable global outlets plus if you count all the.
Prior.
Distribution outlets like cable satellite and everything else.
Companies like ourselves major media companies to distributors like ourselves and others rights holders have a massive challenge of pushing tens of thousands of hours monthly out in that ACA system, it's incredibly costly and very difficult to bring to market quickly so match point.
We enable companies to do that at dramatic savings what they are currently spending.
In a dramatically faster way and in that same system. They can also build and launched their streaming channels and apps.
And we have a beautiful analytics layer that lays on top of it that allows them to make critical business decisions. So.
And it really is as I mentioned previously had kind of an operating system for.
Any company that wants to monetize their costs and streaming space. So we think there's tremendous prospects and we've seen incredible results on our own business as reflected in our current results.
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Thank you and I'm showing no further questions in the queue at this time I'd like to turn the call back to Chris Mcgurk CEO for any closing remarks.
Thank you. So thanks, everyone for your support and really your your patience with us as we transform.
Streaming company over the last couple of years I think all the progress that we've reported on this call and our results in the fourth quarter in the last fiscal year really underscore why we did that transformation I.
I think it's very clear so thank you all and we'll talk again so.
Ladies and gentlemen, thanks for your participation on today's conference. This does conclude your program and you may now disconnect.
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