Q1 2021 Cinedigm Corp Earnings Call
Good day, everyone. Thank you for joining us today, you're teleconference will begin shortly.
Thank you for joining us today and your conference will be get beginning shortly thank you.
[music].
Greetings and welcome to sometimes first quarter fiscal year 2021 earnings conference call.
This time, all participants are in listen only mode.
A question answer session will follow the formal presentation.
If anyone should acquire operator assistance during the conference. Please press Star zero from your telephone Keypad. Please note. This conference is being recorded.
At this time I'll turn the conference over to Jill Calcaterra Executive Vice President Joe You May now begin.
Good morning, Thank you for joining us today on our first quarter fiscal 2021 earnings conference call.
Participating on today's call or Cinedigms, Chairman and Chief Executive Officer, Chris Mcgurk, President upside it I'm networks, Erica and Chief operating Officer General Counsel and President of our cinema equipment business Gary Loffredo.
Before I hand, the call over to management. Please note that on this call certain information presented contains forward looking statements. 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 financial results to differ materially from these forward looking statements are describing the company's periodic reports filed with the FCC from time to time.
All information discussed on this call is as of today August 14th 2020, and 29 does not intend and undertakes no duty to update future events or circumstances.
In addition, certain financial information presented in this call represents non-GAAP financial measures and now I'd like to turn call over to Chris Mcgurk, Chris.
Thank you Joe and thanks, everyone for joining us on the call today.
Given that we just had an extensive for your fiscal 2020 call a month ago, we'll try to make this one briefer.
I'll give an overview the New York, we'll do a deeper dive on our spring business. After that there is going to review our financial performance and then we'll take your questions.
So our results were very strong this quarter.
Despite the adverse effects of the koby tightening pandemic on the theatrical and advertising markets. We continue to strong trend from last quarter again, posting positive core screening and content business. Adjusted EBITDA was a 2.3 million dollar well hundred 3% increase.
Versus the prior year quarter.
This strong performance reflects the expansion nursing business, particularly any bar, where revenues were up 48% versus the prior quarter ended March 31st 2020, Despite the cobot 19 impacts on the overall advertising market.
Also from strong digital content sales from our highest digital revenue quarter in over five years and also from the continued positive impact.
Our aggressive cost streamlining.
Our way Mariano supported screening viewership increased 93%.
29 million viewers in the quarter versus the previous three months, reflecting the expansion of our screening channel portfolio, our reach into over 800 million streaming devices and the continued cord cutting momentum.
Celebrated other current stay at home environment.
Let me just emphasize this point again.
We almost doubled the viewership of aren't linear gets exported channels in just the last three months with almost 30 million active viewers. If you take nothing else out of this call. Please take homeless point because it completely underscores our explosive momentum in the marketplace.
We also have several additional new screaming channels teed up for launch over the coming quarters. So we expect will add significant revenue and profits as we move through this year and beyond.
Importantly, with our screening infrastructure now employers and health Bobby rock noticed in the industry has talked about.
Because each additional channel Richards for carriage, we gained an incremental stream of recurring revenue that accelerates the monetization of our investment.
Clearly we are now uniquely well positioned to continue to capture a meaningful share of the rapidly expanding global streaming business.
There are some of the other key business, how long is from a quarter.
Linear screaming minutes viewed increased 43% and on demand plays increased 183% over the fourth quarter fiscal 2020.
As we announced last month, our key partners Amazon Apple Gruden, Google in demand DSC, well, Microsoft So and dangle generated their strongest digital content performance levels, we lost in over five years.
With over 60% year over year quarterly growth driving a 35% increase in overall digital content sales buildings, our highest digital sales quarter in over five years.
We see this trend continuing to streaming content demand continues to explore across all platforms.
During the quarter, we also announced six additional new screaming network deals, bringing our portfolio total to 16 screening channels under management.
These include launches will channel partnership announcements when the Bob lost channel in partnership with American Public media.
Yes, the scenery extremely body.
Painter and television celebrity Bob loss, and just a few months this channels become one of the top performing channels in our portfolio.
Ill now on more than 68 million connected devices and recently launched on Zummo, Samsung TV plus and tubing.
Contv animate a new 24, seven linear and move on screaming network dedicated to streaming Japanese animated films and series, which launched on June eight.
SPR internationally, a global provider of premium, bringing networks to more than 42 million subscribers to launch in operate E Sports channel game, too and fashion lifestyle network fashion box in North America.
He was a leading sports and lifestyle media company to distribute a pre AD supported linear channel and evolve Networkone whistle TV.
Slide by lot the leader in live music streaming to develop a global lie buybuy branded music streaming channel and form in advertising and content partnership.
And my telephone network email focus streaming moving network targeting for launch in late third quarter fiscal 2021.
During the quarter distribution of our new and existing channels also group.
We announced that Amazon's DB TV is now offering cinedigms pre AD supported linear channels Con TV channel.
Since docurama.
We also significantly expanded international smart TV get urging distribution by closing deals with platform providers viewed toxin and season.
Attending our reach to the majority of smart TV manufacturers.
And we expanded our base of signed the advertising partners to 26 companies with six additional in negotiation.
We also continued the strong progress subsequent to quarter.
We participated in a highly targeted launch in July.
We see Universal's pickup digital streaming platform.
Where we launched hundreds of movies and TV episodes, plus three of our stream channels.
We also announced a partnership with Panther, while China's largest seen park operator in the top producer children's animation, Tunisia to launch a new global streaming service featuring thousands of hours of Cantor wells.
Claimed animated series and feature films and also to distribute Cana wells animated content outside of China.
We believe this will be an incredibly valuable partnership as we introduce the Disney China to audiences outside return.
This partnership also underscores our long term strategy of bilaterally just district distributing content in screaming channels in both North America in China.
As far the two biggest entertainment markets in the world.
We have unique competitive position to become plug go to company to monetize content and streaming.
In both territories and we believe this could be a very important seems to value creation opportunity cornerstone.
During the quarter, we also announced a partnership with bloody disgusting.
The most popular media brands in whore to launch a newborn screening network, but as such Premier just in time for the Halloween season.
We also announced a partnership with Quincy New openings company 21, 14 media to launch a new urban multi cultural entertainment and lifestyle network.
And our distribution expansion efforts have also continued subsequent to quarter end.
Partnered with little Star one of the fastest growing and most popular streaming services to distribute cinedigms portfolio of linear.
And video on demand channels Little Star is the leading provider premium streaming film and TV content to the gaming ecosystem.
Reaches over a 110 million Sony Playstation councils, and also reaches hundreds of millions of additional streaming devices, including Android TV mobile devices and many more.
With this partnership Cinedigms device streaming footprint is now at over 800 million global devices.
Finally on the technology front, we announced a partnership with rights, one leading rights management platform, serving global operating contributor.
Yes, and rights holders to use match point, the Companys proprietary digital content distribution platform with real time rights management and enforcement.
So it is very clear good all this activity has built a strong foundation for both cinedigms future growth and our sustained core business profitability like we have seen the past few quarters, which we delivered despite adverse impacts of the coping 19 pandemic on the advertising and theatrical markets.
As cord cutting continues to accelerate.
We believe our momentum will grow even stronger and we will continue to capture an ever increasing meaningful share of the explosively growing streaming business, particularly now that we are clearly established as the leading independent channel content and technology provider in the specs.
So now let me turn things over to Eric for deeper dive into our stream business Europe.
Thank you Chris.
Over the last quarter, we've been razor focused on executing our strategy of providing channels content and technology services to the brokers remain entertainment marketplace.
Our emphasis has been on five key areas, adding high quality channels and partners to our portfolio expanding distribution.
Increasing viewership scaling our monetization and improving our technology.
Im happy to report that despite one of the most challenging business environments. In recent history, we've achieved significant results in all five areas.
First on the channel partnership Pride.
In the quarter, we brought our total in our total current to 16 partners and subsequent to the quarter are now at 19 channels advancing us nearly two thirds of the way of our stated goal at 30 channels side over the next 12 to 18 months.
And our partner base reflect some of the top producers and distributors of content globally, including discovery on Liberty Globals, All three media American public media.
Most recently fans to while the top animation producer in China, and the fifth largest global theme Park operator.
These and other deals provide us with hundreds of millions of dollars in produced content value at no cost to us and provide a compelling differentiated channel lineup as hard for our competitors to replicate.
On the distribution front over the quarter, we closed deals that increased our addressable device footprint over 675 million devices in more than 120 countries worldwide and subsequent to the quarter ever reached over 800 million devices.
This region is important to both enable monetization as well to build brand equity for the channel properties were launching our team has done a fantastic job on the spot in under a year, we have the mass the global reach that in legacy cable and satellite distribution.
We have taken five to seven years to accomplish on top of that we've established ourselves as a go to partner for free AD supported linear channels for hardware manufacturers like Samsung Vizio, and LG visual powerhouses like Roko, an Amazon and powerful telecom Giants like Comcast and dish networks.
Distribution means nothing without viewership and we have delivered on that front as well over the last quarter. We grew our linear streaming audience by 92% increase on demand plays by 103% and to see minutes watch store by more than 43%.
While these numbers do reflect some benefit from a stay at home environment. The bigger impact has come from our execution of new channel launches with syndicate significant viewership from day, one like we achieved with the launch of the Bob Ross Channel along with major primetime programming efforts.
Given wheel out we will have two to three channel launches per quarter and in the process of major new programming Bush. We expect this the same high levels of viewership growth over the coming quarters.
Importantly, we have excelled on the monetization front, we delivered a 48% increase in AD supported revenues in the quarter. Despite many of our peers posting significant declines amidst one of the worst add quarters on historical record.
Our focus was dramatically increasing inventory and fill rates by launching new properties, expanding distribution and increasing our AD demand partners to 26 partners over the quarter.
Combined with our best record on quarter for digital Entertainment transactions.
Which were up 34% so did I Miss built a rare thing despite its early stages a profitable streaming enterprise.
Given the large number of forthcoming channel launches and are now established base of advertising demand partners.
Fantastic position as we enter the busiest advertising period of year.
And it is important to note a significant number of the platform and channel deals we announced in the quarter.
I have not even been realized yet, but we'll start to reflect in the current quarter and will come online heavily in subsequent quarters.
Last but not least we've made great strides on the technology front, which has been enabling factor and competitive advantage in achieving these stated goals.
In the quarter, we announced that match point, our next generating operating system for digital distribution streaming expanded its automated distribution capabilities and more than 30, LTC and digital platforms. We also announced the launch of new AI based seen analysis and data enrichment capabilities that enables us to improve discoverability on.
Platforms find optimal AD insertion points increased monetization and dramatically reduce time to market. We also announced our first streaming app deployed on the Blue planet platform in partnership with Vizio and sanctuary.
We have graduated from match point being a proof of concept to a fully realize product and we plan to fully exploit match plans of commercial product and are in the process of hiring sales leaders as I speak.
To sum it up our hard work and focused on these carry a key areas as not only led to demonstrably on tangible results is also laid the foundation for both short and long term revenue growth as we continue to execute our plan with that I'll now turn the call over to Gary for a review of our financial results.
Thanks, Eric.
For the first quarter fiscal 2021, our consolidated revenues were $6 million.
As expected overall overall revenues declined as a result of the contract the decline in our legacy digital cinema equipment business and the significant negative impact of coated on theatrical revenues.
The deployment contracts in this segment of our business provided for the payment of virtual print fees for up to 10 years from the installation of the digital projection systems, we have plant, but its expected roll off of virtual print fee revenue.
Reflecting the shift in our business revenues for our Otcs streaming and content distribution core businesses.
Up 22% over last year.
This was led by our Avon revenues, which were up 48% over prior quarter ended March 31st 2020, and 28% over the first quarter of the prior year.
Despite the impact of Covre 19 on the overall advertising market.
Our channel portfolio is growing and our viewership is increasing rapidly witnessed by the 93% growth in viewers to 29 million versus last quarter.
We expect this ongoing shift toward our shooting business will continue to drive the transition to a much higher margin higher growth business model.
Our total operating expenses decreased in the first quarter fiscal 2021 to 8.6 million, which is a decrease of $3.9 million or 31% below the prior year.
This dramatic decrease is due to our committed focus on cost rationalization and expense cutting efforts.
We have and will continue to reposition our infrastructure to focus on the growing at a high margin OTI TV and digital streaming business.
SGN a expenses for the first quarter were 3.8 million, which is a decrease of 5.8 million or 34% compared to the prior year.
Net interest expense decreased to 43% to 1.3 million for the first quarter fiscal 2021.
Parents, a $2.3 million for the prior year period.
The decrease in net interest expense is primarily the result of our active reduction in outstanding debt balance.
Our total outstanding debt balance as of June Thirtyth 2020 was 47 million. That's a reduction of 13 million from the debt balance as of June 32019.
And our total outstanding debt balance as of today is even lower at 44.3 million and $12.1 million of that day is related to the digital cinema business.
For the first quarter fiscal 2021.
So I'll dated adjusted EBITDA was negative 182000 compared to 539000.
The year. Prior this decrease was due to the expected reduction in the legacy sentiment equipment business.
First quarter fiscal 2021, adjusted EBITDA for the core streaming content distribution business was 70000, which is a 2.3 million or 103% increase from the first quarter fiscal year 2020.
Importantly from a liquidity standpoint, we have taken several steps to improve our liquidity position.
Our credit facility East West Bank had an outstanding balance of 40.5 million as of March 30, Onest 2020.
That balance has decreased to 10.2 million as of June Thirtyth 2020.
And we have further decrease that balance the 7.6 million as of today.
To put this in perspective, the balance was 18.6 million March 31st 2019, and today 7.6 million.
The company second lien loan had an outstanding balance of 8.2 million as of March 31st 2020.
We have further reduce that second lien loan in June 2020, So the outstanding balance as of today as of June 32000 27.5 million.
So overall from March 31st 2019 to today, we have reduced our debt balances by over $21 million.
On May 22nd we sold 10.6 million shares of common stock through a registered direct offering for gross proceeds of $8 million.
On July Twentyth, we further strengthened our balance sheet, when we sold 7.2 million shares of common stock.
Registered direct offering for gross proceeds of $10.8 million.
No shares were priced at $1.50 a share.
Our financial results for the first quarter fiscal 2001 reflect.
Substantial improvement from the prior year and we have made incredible progress in closing new channel deals and distribution deals that are not yet fully reflected in our financial results, but we believe will set us up well for future quarters.
We are well positioned to take advantage of the consumer viewing patterns that if shift dramatically and permanently streaming.
With that I will turn the call back to Chris.
Thank you Gary.
In summary, we have clearly powering through many of the negative impacts on the cobot pandemic on the entertainment business to rapidly expand our position as the leading independent player in the streaming space with quality channel content and technology solutions for the entire explosively grow.
Growing global streaming business segment.
We posted our second consecutive quarter of profitability, our core business with a 2.3 million dollar per 103% increase in adjusted EBITDA. We added six more channels to our spring portfolio expanded our distribution reached over 800 million global speaking devices and increased.
Our active viewers by 93% versus the prior three months during the quarter.
We fully intend to keep the strong momentum going all over the remainder of the year and beyond and with that we will now take your questions operator.
Thank you at this time will be conducting a question and answer session.
If you like to ask a question. Please press star one from your telephone keypad and a confirmation tone indicate your line is and the question Q.
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Thank you.
First question is from the line of Dan Kurnos Smith to Benchmark Company. Please proceed with your question.
Great. Thanks. Good morning, Yes, you know had the update recently, so maybe just a few topics to chew on a bit here, Eric can you help us sized up.
Reits line and just how you're thinking about a you know you continue to talk about commercialization of match point I just want to understand.
Well, we think about economics, and sort of and where that goes and then maybe a bigger picture question. We've seen a lot of and I think this as mentioned last time, it's incredible amount of strength in the t. by the segment of the market do you have any titles that can be shift.
Did amongst the buckets to kind of maximize its high margin opportunity are there any incremental partners coming to you for distribution looking to participate in this market and then obviously windows have changed significantly.
In terms of both pricing and lengths then then going to DVD. So maybe even just talk about the impact of the T. Vod mix shift.
And on your DVD business and ultimately just how you're thinking kind of plays out over the next 12 months or so.
Sure.
So first let me talk about rights line.
We we write line is bleeding.
Platform for rights management.
In the entertainment industry you have.
Dozens and dozens of companies major major companies.
I'd like all the studios every major independent that used to manage their rights. So our goal with match point, if you think of mass point.
Similar to like Salesforce, where were Salesforce essential product is CRM, our central product with Maxpoint is distribution. So our goal is to plug in an interface with rights management systems with a.
Patient companies and other tools. So so companies can use us like an operating system and plug a variety of applications that will will be into profitability. So rights line. The best of breed and rights management, and we plan on interface and working with the best of breed.
In every category.
Of tool that a distribution company would use so.
As it relates to match point.
Match point that what's what's beautiful about Nash point is the product is fully developed and ready to be marketed and sold were in the process of hiring salespeople, which we hope to have online.
Within the next.
30 days or so.
And the monetization opportunity there is pretty significant given match points ability to distribute content.
We've now we've now built that system to reach we added 30 partners. We can we have the ability to deliver to more than 100 different partners in the ecosystem.
And use that same system to build out. So we think just on a pure purely focused on the distribution point.
I'll I'll put in perspective.
Companies of our size typically spend upwards of.
Half a million to $1 million a year.
In Opex with third party companies. So we're going straight after that business. If you think about how many of production distribution.
Companies are in the marketplace.
Hundreds and hundreds in North America, and thousands globally, that's really going to be our focus and customer segment.
As it relates to Tivo.
So we absolutely think that that.
That the resurgence there were taking advantage of it.
We don't necessarily need to redeploy content into that channel once you're in the T. Vod window.
With rare exception the content is permanently in that window. So for us maximizing the revenue comes from increasing the flow of content into the company, which we have some pretty significant plans in play right now to do so over the coming quarters.
And then too.
We are really focused on taking a catalog that we currently own and maximizing the value promotion and placement with all of the streaming partners. So the lift that we're seeing two pieces to it one is obviously, having the eyeballs, which are there and then two is making sure our core content gets in front as eyeballs, which has led.
Bridging our.
Our.
Dozen years of working experience with the court T. Vod segment, there so I think that.
We're doing very well on that front, we're going to continue to push those promotions throughout the the busy coming quarter.
Got it that's helpful. And then just maybe one more a two parter on the distribution fronts you guys. It's done a good job expanding distribution just curious if there any.
Major distribution deals last to do that you see a and then a you know I know that you guys always highlight U.S. in China, but obviously there was the opportunity ex than the internationally to expand distribution and I'm just curious if there's any progress on that front.
Yes, so there's really two buckets here to talk about one is domestically, which have the segments, where we are not.
Fully rate, we have not fully realized yet but are starting to make inroads or in the legacy.
Legacy cable distribution.
We've already made.
Several deals over the last 12 months, including Comcast and dish Sling that dish and addition network swing.
And we will be adding.
Our goal is to add additional players now if you think if you look down the list and see the number players were not working with that's a pretty fertile ground of growth.
In some of the highest consumption areas out there today.
You know it would be foolish to write off.
The place where most of the living or consumption still happening today. Despite all of everything we're talking about your on streaming.
And then and then also.
Subsequent to that the virtual NBT DD universe.
The file as the you tube Tvs, who who lose TV platform and so on those represent.
Tens of millions of subscribers that we're currently not reaching with our linear channels. So our goal is to expand and those.
But the bigger opportunity is internationally, where we today have a very small footprint.
We've made some bigger.
Inroads with deals with.
Platform players like Samsung.
Zeese on.
And and others, but I would expect that to be our big focus Europe is probably 24 months behind maturity.
Of their eightfive consumer market relative to the U.S.
And we think there's massive opportunities in Europe, we're focusing on deals in that territory and then lastly.
You know as you look at the smart TV market, there's about 250 to 260 million Smart Tvs ship globally.
In the past.
Emerging markets.
Or markets like Lat am in India, we're not huge smart TV providers are predominately a mobile first mobile first territories that has dramatically shifted over the last 24 months, where those markets are now.
With smart TV is getting into the.
Hundreds of dollars at four very big screens.
The consumers are opting to purchase those.
And and connecting the Internet. So we think those are huge growth opportunities for us we have content rights and channels for those territories that aren't even exploited yet and our focus is going to be on adding those territories heavily.
In the second half of this year.
Okay.
Great. That's really helpful. Thanks for all the color appreciate it.
Thank you.
Next question is in line of Brian Kinstlinger with Alliance Global Partners. Please proceed with your question.
Great. Thanks, so much good morning, and you said that AD supported revenue increased 48% quoted drivers being more channels and expanded distribution in my guess is giving Toby just likely understates the potential of these channels.
Is there a way to quantify how ad pricing and demand.
Partially offset this growth, which I assume was the case.
Sure.
I don't have I don't specifically have the broader industry stats in front of me, but I can tell you.
Historically, if you if you look at.
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The quarter that we're talking about here at the beginning part of that quarter was probably some of the worst.
Worst declines in AD in AD cpms and fill rates.
Historically, so I think it's you know it's safe to the ballpark at least.
25% to 30% decline, we could have seen.
Cpms if not higher.
And certainly fill rates substantially lower so flying into that headwind.
We just our mission was just around right through it with adding demand partners, adding.
Sure massive increase in available inventory and just as our book channel launches out into that environment and so.
I can't really benchmark you a number of what we could have done had there been no had cobot not had an impact per se, but I can't say cpms were 25% to 30% lower and fill rates in some cases, where.
Potentially half of.
50% lower than they would have been for a portion of.
The period.
For some of the channels, we have so massive impact and I think you know I'm really proud of what the team did despite.
The most challenging add quarter since 2008.
And but I think the opportunity here is when you look at.
What this means.
We're seeing with a lack of sports and with the acceleration of AD dollars from traditional television to Ltd.
Big moves in big plays in growth are possible and in fact, we've seen.
Right now probably 90% to 95% return to normal Cpms and our fill rates are historically higher than they were even pre co bid.
Judaism, So really hard work and the addition of all those demand partners, we've been talking about so I think.
If you take a look at the market dynamics.
Yes. This we're going into a strong growth, where there's a lot of theres a lot of excitement about OTI.
And pricing going into the heavy holiday quarter, I think we're going to be very well poised.
Even despite everything that's going on.
Okay and that was partially leading into my second question about how.
The market in July and August really seen it sounds like fill rates are better and a minimum of maybe cpms in a little bit better so will we see that.
Significant increase in revenue in sequentially or relocate till the fourth quarter until we see the benefits on the income statement in revenue.
Are those trends and I assume some more channels that releasing.
Right.
Well.
We really don't give guidance, but I would say systemically, if you kind of look at the trends around each of those things.
We will we will definitely see.
We will definitely see continued and continued growth and improvement.
In every quarter.
And we will definitely see are the holiday quarter could represent about 40%.
Of the AD markets revenue so.
I would say both of those things combined will show.
So very strong.
Funchal growth going forward.
Great last question.
I think that you now we can three you launched have 19 streaming channels in the marketplace.
Where do you first of all how many channels.
Do you have that haven't launched that you've announced and then what how many do you expect to be fully launched by the end of their calendar year.
Thanks.
So so twoq to clarify that that number is under contract right either signs with distribution rights.
Or.
Or.
Channels that are launched so we've only launched about eight of those 19 channel so far so I think.
Yes.
A lot of the future potential isn't is in subsequent quarters than the to this one that we're talking about today.
Our goal is to stand up two to three.
Third quarter and it gives us enough room.
To market.
To to focus on doing good job on the launch is much distributions we can at launch.
So.
We've got a lot in the hopper.
For future quarters, and as we see what happened a lot of what was driven in this quarter was by new channel launches headed by our bras, which have leveled up.
Our consumption viewing by more by more than a third and subsequently revenue.
You know is being driven heavily by that so we think the new channel launches drive significant revenue.
And.
We think that the that our portfolio our goal is to get up to 30.
We think thats a good steady state we think on most of these major platforms.
That we're talking about on the linear side, you know, they're going to be steady state between two to 300 channels.
So our goal is is.
It's a big one as to hold to maintain 7% to 10% of the dial on OEM devices is I think a pretty big goal. Considering we think this is what each basic cable in the future. So if you're thinking about the long term implications of that that means.
Some of them as a company and guide.
Trying to control, 7% to 10% of the future basic cable dial.
It's a heavy goal, but one that were more than capable of achieving given the technology and growth Weve and partner interest we've seen so far.
And Eric if I can interrupt like.
If I can answer up there.
Can you just explain give further explanation on once we launch a channel that doesn't mean, we're done.
Lifecycle, Bob Wars, we launch we launched on one distribution outlet, but then we continue over months to distribute to distribute it further and that's an ongoing process.
I think thats a critical point thanks, thanks for that clarification Gary.
Much like in cable distribution I mentioned earlier.
During our comments that you know in cable distribution you know it could take five to seven years to get full carriage of it have a linear channel we're short circuit in that.
To our goal is to get full freight distribution within 12 months of launch. So we don't it's not like we flip a switch in every channel of live when it goes live we may launch with one partner to partners.
Given we have dozens of partners. It takes a little bit of time Theres technical Onboarding, there's contract expansions and so forth.
That and and other considerations technical considerations and other things.
It takes several quarters from from when a channel has announced it takes it takes quarter to two quarters to launch it and then it takes several quarters to fully realize its full potential in terms of revenue generation in footprint of our goal is always the launch on as many skus.
Ill partners as we can at launch to maximize revenue launch.
But even after launch demand partners don't light up.
Revenue flow to the channel.
With that part they tested out they get familiar with the demographics.
And they incrementally increase their spend with the channel. So that takes that takes 30 to 90 days as well so from an announcement to a fully realized revenue.
Generating machine it could take 12 to 18 months.
That doesn't mean that takes hold they must generate revenue, but what it does indicate is from when you watch much like any new enterprise for when you launch a channel to win its throwing off its maximum cash potential.
It's going to take it is going to take.
Several quarters at a minimum but up to 12 18 months.
So I think Thats, an important thing to note is dramatically faster than cable and it's going into a high growth.
Segment.
So that accelerates things, but I think it's important for people to.
To realize and have some.
Understanding of the revenue generating cycle out of these channels.
Great. Thanks, so much.
Thank you at this time if reached end of our question answer session for today I'll now hand, the floor back to Chris Mcgurk for closing remarks.
I just want to thank everyone again for joining us on the call today. We appreciate your interest and your support very much. These are exciting times for the company and we look forward to talking to you again very soon thank you.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.