Q2 2024 Cineverse Corp Earnings Call
[music].
Yeah.
Good day everyone.
Welcome to send them persist second quarter fiscal 'twenty to 'twenty four financial results conference call.
My name is Tia and I'll be your moderator for today.
Currently all participants are in a listen only mode.
We will have a question and answer session. Following managements prepared remarks at which time participants cant press star followed by the number wanted to ask a question if anyone needs operator help press Star Zero. Please note that this call is being recorded.
I would now like to turn the call over to your host Gary Loffredo, Chief Legal Officer Secretary and senior adviser for centers. Please proceed.
Good afternoon, everyone. Thank you for joining us for the center versus fiscal 2024 second quarter financial results Conference call.
Australia announcing sooner versus results for the fiscal second quarter ended September 32023 is available at the investors section of the company's website at Www Dot universe Dot com.
A replay of this broadcast will also be made available at University website. After the conclusion of this call.
Before we begin.
Well.
I would like to point out that certain statements made on today's call contains forward looking statements.
These statements are based on management's current expectations and are subject to risks uncertainties and assumptions.
The company's periodic reports that are filed with the SEC described potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward looking statements.
All of the information discussed.
This call is as of today November 14, 2023, and University does not assume any obligation to update update any of these forward looking statements except as required by law.
In addition, certain financial information presented in this call represents non-GAAP financial measures and we encourage you to read our disclosures and reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics.
I'm, Gary Loffredo, Chief Legal Officer, Secretary and senior adviser at centers.
With me today are Chris Mcgurk, Chairman and CEO.
Eric <unk>, President and Chief strategy Officer.
Tony You Adore, Chief operating officer, and Chief Technology Officer.
Mark Lindsey Chief Financial Officer, and Yolanda Mercy at Chief content Officer, all of whom will be available for questions. Following the prepared remarks.
On today's call, Chris will discuss our second quarter fiscal 2024 highlights the latest operational developments outlook and long term growth strategy.
Mark will follow with a review of our results and Eric will provide some detail on our business results and operating initiatives before opening the floor for questions.
I will now turn the call over to Chris Mcgurk to begin.
Thank you Gary.
Yes, Hello, everyone. Thank you for joining us today.
We made great strides this quarter towards achieving our previously stated goal of dramatically reducing costs, improving margins and driving towards sustained profitability.
We did this by further optimizing our more than two dozen streaming channel portfolio.
Culling lower margin channels, while focusing resources on higher margin higher return performers.
And then by cutting costs as we finalize the consolidation of the eight key content and streaming acquisitions, we made over the past three years.
At the same time, we are also transferring a significant number of domestic employment positions to our center versus services, India operation a unique competitive cost and work efficiency advantage that <unk> enjoys versus everyone else in our space.
I believe the results this quarter show significant progress towards our goal of long term sustained profitability and also demonstrate our willingness to trade off lower margin revenue streams for higher margins and profits in pursuit of that goal.
In the quarter, we increased our total operating margin to 64% from 42%.
We increased our recurring operating margin to 56% of <unk>.
30% when excluding our legacy digital cinema equipment business.
We decreased our operating expenses by $6 3 million or 34%.
We decreased our SG&A cost by $2 8 million or.
Or 29% via a reduction of 30 employment positions and tight cost controls.
We have also put any management variable bonus compensation on hold until we achieve sustainable profitability.
And we have significant additional positions that we plan to offshore to set of our services India over the next few months beyond the 29 plus positions that we have already moved there were identified to offshore.
All of that will enable us to hit our goal of $8 million in annual SG&A cuts.
<unk> services, India is a very significant advantage for us providing a huge cost savings and work efficiency upside that we own versus our competitors and we intend to leverage that to the fullest extent possible.
As a result of all these optimization and cost savings initiatives, which significantly exceeded the revenue impact of culling lower margin channels, we improved our operating profit by $5 3 million to.
$600000 this quarter.
And we increased our adjusted EBITDA by $3 7 million.
Or 283% to $2 4 million.
And we also narrowed our net loss to $400000. That's net loss attributable to common shareholders. That's an improvement of $5 4 million.
Clearly we are on the right track towards sustained profitability.
And that remains our overriding focus.
Mark Lindsey will next to add some color to these results speak to our cash management activities and planning.
Eric <unk> will then review all of the initiatives, we have in place to drive high margin incremental revenues, including our recently announced deal with technology Unicorn commodity and our upcoming announcements regarding.
AI partnerships were screaming search and discovery.
Mark.
Thank you Chris.
For the fiscal second quarter ended September 32023, <unk> reported total revenues of $13 million, which compares to $14 8 million in the prior year quarter as Chris noted the decrease was primarily due to the impact on our advertising revenue from the intentional elimination of certain lower margin channel.
Z a portfolio optimization and reallocating those resources to higher performing and higher margin streaming properties, which is important to our goal of achieving sustainable profitability in the near term subscription.
Subscription based revenues increased 52% to $3 5 million driven by the continued success of our streaming services.
For example, our screen box channel revenues increased over 350% compared to the prior year quarter.
Advertising based revenues declined 28% to $4 1 million, primarily due to our channel optimization efforts and the continued impact of the current economic environment on advertising spend.
Nonrecurring revenues related to our legacy digital cinema business were $2 4 million a decline of 7% from prior year quarter. We don't expect any additional future revenues associated with this business other than nominal witness sales.
Operating margin for the period was 64% an increase from 42% in the prior year quarter, when excluding the impact of our legacy digital cinema business, our recurring direct operating margin improved to 56% compared to 30% in the prior year quarter, which is in excess of our previously provided guidance of 45.
<unk> to 50% for fiscal year 2024.
Our improved direct operating margin is a direct result of our cost optimization initiatives that Chris referred to earlier.
Selling general and administrative expenses decreased $2 8 million or 29% from the prior year quarter again. This improvement is a direct result of the cost optimization initiatives discussed previously we expect to gain even greater efficiencies as our offshoring efforts. This universe services, India gained momentum over the remainder of the <unk>.
Full year.
Overall total operating expenses decreased $6 3 million.
And as a result, our net loss attributable to common stockholders narrowed to a negative 0.4 million or negative <unk> <unk> per diluted share a $5 $3 million and 61 per share improvement from the prior year quarter.
Adjusted EBITDA improved $3 $7 million from a negative $1 3 million in the prior year quarter to a positive $2 4 million in the in the current quarter.
We had $8 6 million in cash and cash equivalents on our balance sheet as of September 32023, and we have $5 million outstanding on our working capital facility during the quarter, our cash flow used from operations improved by $2 2 million from.
From a negative $5 1 million in the prior year quarter to a negative 2.2 dollars $9 million this quarter.
The cash usage of $2 9 million this quarter $4 million related to investments in our content portfolio via an advanced <unk> minimum guarantee payments the largest being for clarifier three year to date, our content portfolio spend was $5 $3 million.
The important point here about cash is that when excluding our content portfolio spend cash flow from operations was a positive $1 $1 million this quarter.
We are excited to see the impact that our cost optimization strategy has had this quarter and are optimistic about their impact for the remainder of the fiscal year. In addition, we are working closely with our bank to increase the size and duration of our working capital facility, we feel well positioned to be able to execute on our goal of achieving sustainable.
Profitability by the end of the fiscal year.
In terms of guidance. We are currently reviewing our previously issued guidance in connection with finalizing our long range forecast that takes into account the results of our channel optimization efforts, our cost reduction initiatives and the new revenue initiatives, we are launching such as our SaaS and managed services technology business, We will report any chain.
The changes in guidance if warranted once we have completed this process.
I also want to point out that we have a 500000 shares stock repurchase program available through March 2024, we believe that we are significantly undervalued with the stock price is trading substantially below our current book value and we will assess the need to utilize the stock repurchase program once our trading window opens up.
With that I'll turn the floor over to Eric to discuss the market environment and our growth initiatives. Thank you.
Good afternoon, everyone and thank you for joining us today.
I'd like to start off by sharing our financial progress, particularly in the streaming sector, our digital and streaming revenue declined by 7% to $10 6 million. This stems from our strategic digital licensing and expansion of our subscription base, which was offset by a decline in AD revenues and the.
And as previously noted the calling of multiple lower margin streaming channels.
Subscription revenues have seen a considerable increase of $3 5 million up 50%, 52% over the prior year.
It reached 124 million subscribers, thanks to our target acquisitions per screen box for our channel and the Dove channel expansion.
This progress underscores the strength and appeal of our enthusiast streaming services and we're going to continue to focus on smart growth by optimizing retail pricing for our services expanding distribution and pursuing bundling partnerships beyond that we continue to rationalize content spending you've seen the major streamers reduce content spend across the board and we're no exception.
Going forward, we have shifted away from capital intensive all rights acquisitions in productions to lower costs acquisitions, and minimum guarantee and revenue sharing deals. This approach will greatly reduce our need for content investment spend and given our other efforts noted will see minimal impact the topline revenue while boosting profitability.
AD based revenues experienced a dip to $4 1 million a decrease of 28% in the quarter year over year. This decline aligns with the insights Chris and Mark shared earlier, we streamlined our channel portfolio prioritized higher margin channels and concluded the wind down of several underperforming ones.
Despite the challenges in the AD market, including a prolonged tech migration with a major fast partner, we have navigated these waters with strategic finesse and our partners' marketing make goods and helped us bounce back with that partner, reaching pre transition revenue levels on that platform by quarter end.
If we consider some of these factors our year over year impact as it relates to market softness was in our estimation between 10% to 12% year to date.
We are seeing in the market as a shift from an open marketplace pure programmatic buying from agencies and brands and this has been due to efforts on supply path optimization to buy directly from content publishers like <unk> universe.
We think this is great for us in the short term will eliminate many middlemen and resellers are short to midterm outlook is much greater sales into the three key initiatives first shifting all of our open market inventory the Pnp and programmatic direct deals. We estimate this will increase revenues on our existing inventory by up to 30% at higher fill rates.
Second our direct sales efforts and this quarter, we expanded our AD team and that team is fully up to speed in market and focused on building relationships and responding to rfps for next calendar year.
Given most of the major brands and advertisers are planning out nine to 12 months, we expect to see robust results from these efforts starting at the end of this fiscal year and ramping heavily into our next fiscal year.
With robust political AD spend in the market and expected heavy shift from cable and satellite to connected TV.
Next calendar year is looking to be a breakout year on ad sales.
Our strategy has evolved we're moving away from the pursuit of high top line revenue and <unk> growth at the expense and profitability.
Third we're focused on efficient profitable growth.
Our target areas are those that we can leverage our competitive edge in scale with minimal growth capital digital.
Digital in aggregate digital aggregation and licensing is a prime example, taken advantage of our extensive library and technology.
Pivoting towards a more balanced licensing strategy as notice, which we believe will unlock significant revenues from our library in the upcoming quarters.
For our own streaming channels, our strategy to focus on niche markets, where we can lead such as horror thriller faith and family and Asian content, we've been consolidating assets in optimizing our team structure to better align with this vision.
<unk> technology remains a cornerstone of our strategy as the streaming market evolves for one of the few platforms capable of supporting the industry shift to various business models and distribution points, our competitors offer only a fraction of what <unk> can do and we're excited to expand on those capabilities.
In the spirit of our partnership with the model, we've committed to bringing our innovative match point suite in content services to an even broader market.
Our shared history with a moggie since 2017 has set the stage for a strategic collaborations that we think will redefine the streaming technology business.
As we gear up for major technology conferences, and finalize our market strategies. We're confident that this synergy will drive significant revenue growth and solidify our position as innovators in streaming infrastructure space.
We believe that the Moggy partnership could provide low eight figures of annual revenue once fully up to scale based on our internal forecast and discussions with the module.
We believe there are substantial customers an immediate need of our solutions and expect to move quickly in the new year to take advantage of the opportunity starting with CES.
Our efforts on driving increased match point sales and partnerships go beyond the large enterprise customers targeted in that deal.
We're going to continue to offer companies manage channel services like we're doing today with American public Media Company dynamics, Bob Ross, Inc. Real Madrid, all three media and most recently Douglas fir and nine story.
These partnerships provide us high quality brands that typically far lower risk than launching our own speculative channels with no existing brand identity.
I also wanted to address the timeline on channel launches in general as well as provide an update on key forthcoming channels.
As the fast market has matured and competition for valuable placement on platforms has increased the amount of time it takes to get channels up and on platforms has gone up from around two months up to nine months, depending on the platform.
While this is far quicker than it ever was in the cable ecosystem. It does mean there'll be longer periods between the channels announcement and launch. Additionally.
Additionally, when we partnered with a third party we're dependent on those parties producing secure content capture content of remaster it to be suitable for broadcast and streaming.
We don't control those elements and sometimes this can lead to delays these elements need to be kept in mind as we announced channel deals.
As it relates to our current portfolio, we expect <unk> to launch within the current quarter. The Gopro channel is predominately new original programming, which is great for securing carriage in advertising conversations but longer term production delays from our partner it pushed the launch into fiscal Q4 calendar Q1.
We also expect launches immediate or an entrepreneur in fiscal Q4 calendar Q1, as well as it relates to Sid and Marty Cross channel, where currently the process of re mastering restoring the content for K. This keep in mind. This is an extensive progress as the content wasn't standard definition.
We are pushing to have this channel lab in fiscal Q4 calendar Q1, but that will be dependent on distribution conversations happening today.
With match point, we're also targeting the small and medium business segment directly and have recently hired a new head of sales for match point with over a decade experience targeting the exact arena we're covering.
And that we are developing new products and capabilities to allow media companies to better monetize their content streaming services by utilizing the power of AI.
This ranges from making difficult labor intensive and repetitive tasks scalable and cost effective like captioning metadata enrichment and quality control to next generation technologies that can help companies prepare their content for licenses into large language models drive deep engagement with consumers and even create new content from existing libraries using AI.
We expect to announce the latest fruits of our AI R&D efforts, which we've been developing for this past year over the next few weeks and months.
Important thing to take away from this is that our underlying technology platform facilitates rapid high quality processing video to tackle the biggest challenges the world's tech Giants are trying to solve with AI.
So we're not only planning new product launches, but also expanding our engineering team to support these engine these initiatives in India. The.
The future looks bright with match point into universe, and we're eager to share more about our progress in the coming weeks with.
With that operator, let's open it up for Q&A.
We will now begin the Q&A session.
If you would like to ask a question. Please press star followed by one or you take turnkey pad.
Any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one.
As a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking a question we'll pause.
Briefly to allow questions to generate in Q.
The first question comes from the line of Brian Kinsler with Alliance Global Partners. Please proceed.
Great. Thanks, and congratulations on all the restructuring and what it means.
For the much stronger fundamentals said it looks like already in the quarter sorry.
Sorry, it was a lot of information or write downs. If you could share. If you provided at the gross margin of the business, excluding the legacy business and what was the operating margin or EBITDA margin. If you will for again the business that excludes the legacy.
This is Chris Thanks for your time.
But I'll, let I'll, let mark Lindsey go through those numbers with you.
Mark Thanks, Chris.
Yes.
Thanks, Brian.
The gross margin before legacy before excluding legacy was 64% this quarter and 42% prior year quarter, excluding the legacy business is 56% this quarter and 30% in the prior quarter.
30% of your EBITDA or operating margin.
That's correct operating margin.
Got it Okay and then.
If you could.
I think it's a good time, given your announcement with a marquee and the partnership it's planned to rollout.
If you could highlight the revenue model is it selling subscription to the universe streaming content to platforms.
They're able to use your match coin services to cure rate and transfer of content.
And then the second part of that question you mentioned low eight figures in terms of revenue contribution in your prepared remarks does.
Does that suggest you expect.
To close next fiscal year with about $10 million of revenue or is that too quick and steep.
To have it by then.
Eric do you want to take that one.
Sure sure. So so does it go through both parts so first on the.
What are we actually selling so we're tentatively calling this fast kit. So essentially if you kind of look at the marketplace. Today. There is a large number of.
<unk>.
Maggie calls and video service providers. This this is going to be hardware manufacturers telcos.
Anybody who really was that the musical chairs of when <unk> were for sale and missed out or just have not don't have the resources or assets to launch a scale streaming platform for.
Like the Roku channel has or others. So we're teaming up with a moggie to essentially offer this as a turnkey where you can get the applications. The backend infrastructure <unk> has 800, plus fast channels, we have 70000 hours of programming.
And then both of US have monetization capabilities. It's really allows companies very rapidly in turnkey to get into the market.
Save years of effort to do so and by the way we look at we evaluated the market. There are many many companies that.
The amount of monetization they have in this space relative to what they should have due to their market share.
There is quite a large addressable market here and you combine that with.
800, <unk> 800, plus customers, there's a very very large market. So the idea here is to have a moggie 'twenty.
25% to 30% Global sales force that's already engaged in.
Nine figures of revenue.
Or more we estimate across the board.
To really start bolting on much bigger meaningful services in this partnership.
So that's so that's number one in terms of the <unk>.
Model.
As you can imagine with these bigger enterprise deals.
It's going to be dependent on what services. The partner need. Some served some partners may want to do their own content acquisitions.
May want to develop the front end and apps, but in the backend in infrastructure or vice versa. So it's really going to be tailored by by partner I would expect this to be a similar to a <unk> model of SaaS based consumption that'll be our model in a deal with the <unk> will be in market and its on a similar basis.
<unk>.
A consumption based model based off of what these partners decided to utilize.
And then you'll get it.
The consumption.
Exactly exactly.
So.
There'll be direct build for a variety of services right.
For content based deals there'll probably be a revenue share based model as well.
So.
Third as terms of our look at the market.
Clearly as you remember as I think we've talked about previously.
The sales cycle on these.
Youre talking about people launching and building applications bring into the market. So you are looking at we typically see a deal cycle like this typically a quarter or two.
Depending on the partner and how complex are the deal it is.
And then the implementation is going to come after that so we think.
The next fiscal year will really be about ramping up to that number.
And thats sort of the number we expect the steady state to be at once this business has ramped so.
We're hitting the ground running in our fiscal Q4 here.
My expectation is that a lot of people.
And the market are going to want to be able to take advantage of a very heavy AD market. This year. So we will probably have lots of engagements.
Towards the middle of the year to try to capture Q.
Q3, Q4 calendar Q3, Q4 AD revenue.
I would expect us to see.
Some results in the fiscal year next year will.
While we realize the full eight figure amount it'll probably be a longer ramp to hit that but I think we'll start to see.
Some material efforts coming by by mid next year.
Great.
And then separately.
You touched on having your direct AD sales team I think in places, which you said Eric.
Can you talk about the progress has there been a contribution how long does it take.
Before you see the impact of that team building relationships and driving higher margin ad sales.
Sure sure. So it's really a three stage process right stage one.
As of today.
Our prior to just even a few months ago, we were predominantly open marketplace programmatic in other words anybody and everybody can buy and sell our inventory.
And that.
One of the things we've been doing since.
Since mid to late summer is transitioning from that we'll call that the low end of the CTV market.
Upstream to programmatic direct.
And private marketplace deals with agencies brands and DSP.
So we've been in the process of going through that.
Since mid year.
And we've made an incredible amount of progress on that I think.
That's the first step it's hard to it's hard for a direct sales team to go out and market and sell if they can buy an open programmatic right. So you have to sort of move everything upstream in the stack, that's what we've been working and focused on.
Simultaneously.
We've hired up our direct sellers team.
And as you I'm sure you know the the cycles for direct sales most of the brands and agencies are working six to nine months out there is some.
We'll call it scatter opportunities in the back back half of this year or in early Q1, but.
But I think we.
We will really start to see the fruits towards the end of our fiscal Q4.
Efforts on this we ran a few campaigns we did ancestry talk.
Jack in the box and a few others.
Over the last quarter or so, but we've got rfps flying out the door.
Pretty constantly at this point now so I expect next year to be pretty robust.
Great. One last question I'll get back in the queue.
I think you were very clear on their plans for content acquisition cost come down like everyone else in the industry.
Are there any known significant cash content costs you see in the near term that you can call out.
And should we expect.
The cash flow cost outside of the P&L it would be nominal or are those still be.
Some bits and pieces here and there of cash content costs.
Yes.
All right.
Oh go ahead, where we went through our paid a high profile spending over the last quarter.
Eric mentioned tariff, our spending we do to sit and Marty cough, regardless for.
I think youre going to see a real knowing of our spend continue for at least the next six months.
Great. Thank you.
Thank you.
The next question comes from the line of Dan <unk> with Benchmark Company. Please proceed.
Thanks, Good afternoon.
Chris and Eric the home.
Channel.
Portfolio balancing let's just call it thats not new for you guys I know, Chris you've emphasized that in the past as of you Eric. So this is not.
A big shift I think the order of magnitude was maybe a little larger.
Then we might have thought in the quarter, but the way that Eric outlined it once we get into fiscal Q4, theyre stuff coming back online and obviously the.
Profitability of the portfolio has significantly improved so I just wanted to make sure I have the math right I mean, it feels like.
$2 million ish dollar incremental call on obviously correct me if I'm wrong on that on the revenue side, but I'm just trying to get a sense between all the initiatives you have planned because if you strip out the legacy revenue you announced on the quarter today.
And then take out the base distribution business, you still have about $10 million in.
This is roughly anyway.
Revenue between subscription advertising and some licensing and digital in there.
Intend to grow off of it so I guess I just wanted to get a sense for you.
How much do you think that business grows by before we kind of layer on all of.
Software SaaS stuff that I do want to talk about afterwards.
A couple of things, yes. This is Chris.
First of all the channel portfolio optimization, even though I've talked about it in the last couple of calls what Youre seeing this quarter is youre really saying.
The bulk of the impact really hitting the P&L because we cut some channels in the neuro last quarter and the whole thing so.
Got it.
I have been talking about it but the impact on our financials you could say is more impactful this quarter and knew that is a new a new factor.
We're not going to be able to answer your question.
Call is Mark Lindsey said, we're going through a process now of looking at the impact of all of our channel optimization activities.
Turning it into a long range forecast and layering in all of these new revenue upsides with Eric talked about.
We're in process of that right now and I think it's probably a conversation that would be better had.
Offline.
I don't know, if Eric or Mark, let me add anything to that but I mean, that's right that's right.
At this point.
Eric nothing.
It's too early.
Go ahead go ahead Harry.
Okay, Yes, I think I think the only the only thing really to add is obviously.
The timing of.
The bulk of of the channel portfolio that we have launching is happening in Q4.
I think we're still locking debt. This is one of the challenges of.
The fast market today is.
Think of.
These channels are probably getting youre trying to launch another dozen to two dozen channels in Q1.
Optimizing the timing and planning of each so we don't know our exact launch dates yet if it's going to be early in the quarter or later in the quarter yet.
We hope to find out soon obviously, we've got the channels ready to go we've been testing them and they are ready to be launched it's just a matter of us locking the timing so it's hard to say definitively.
How much those are going to impact the quarter.
And what that's going to be as it stands today, but we're going to know pretty soon on that on that front.
Hey, Dan is we've got a couple of tech deals that we're hoping to announce in the next couple of weeks that we haven't talked about we can't talk about.
On this call. There are also going to have an impact and that's why we're.
We're being very careful and we're trying to be very strategic and.
And looking at our at our long range forecast and hopefully over the next few weeks that'll that'll come together. The one thing we are 100% sure.
To continue to rip costs out of the system.
<unk> India.
As a huge upside for us I mean, we're basically transferring jobs over there that 10% to 15% of the domestic costs, and we're getting better workflows and efficiencies out of it.
And again I've said this on the last call.
Trusted operating division of the company were not outsourcing it to a third party where offshore to our own division Thats performed pretty tremendously. So we're expecting significant additional savings that are only going to improve our margins further and thats kind of the fee.
Foundation of the plan that we're in the process of putting together.
That's fair.
I'm just trying to understand the baseline right.
Obviously, making a healthy profit and tech pivot here.
And it doesn't mean that you are.
Moving away from the streaming and our advertising business piece of it I just wanted to sort of get a sense. So now we have this is the new baseline so theres not much more to come off based on what you've said and then adding more profitable base now there will be upside to that from whatever happens with the advertiser.
Any changes that Eric referenced in terms of the AD sales model as well as new channels timing TBD on all of that stuff.
And now as you referenced Chris there is.
Obviously, the Miami deal to me as sort of a preface for a broader tax push I would assume is coming and so.
Does a moggie in particular.
Do they add tools to the kit that they give you expanded capabilities and just in general how do you think about sort of reinvesting or expanding your tool belt when it comes to leveraging the match point technology.
Eric and Tony.
Sure sure.
Yeah.
So I'll say I'll say generally and Tony can talk more specifically about <unk>, what moggy brings to the table but.
I think the biggest game changer for us is.
You have arguably the largest infrastructure player.
The streaming market and fast market today.
With the <unk>.
Large global sales force selling our product where they can take it to market much faster.
Then it would take us.
Quite a long period of time to hire up.
Comparable sales force for what a Moggie has and then the second piece is.
What <unk> brings to the table in terms of assets beyond the sales force.
The portfolio of 800 plus channels.
That they can bring to bear in the market and.
The huge customer relationship base that they have.
We have a pretty decent customer relationship base, but there is oriented to much larger enterprises.
Then we are today, so those that those assets really.
Accelerate all of the efforts.
It doesn't mean that we're not internally focused on the small and mid market segments to complement that.
I feel like.
They'll push our revenue drive much faster than we will incremental eyes on the from the small end.
Just to add to that I think one way of looking at it is.
Most of the Big media companies have been investing in fast that's where the immediate opportunity is.
But now as all of the Big Studios have released their own Standalone services, having applications available to the consumer to become an important part of.
Everyone's strategy and Thats the area, where we have a head start we've developed mass point over the last eight years specifically for servicing.
And video on demand and that's where we see the rest of the industry moving using faster kind of entry point, but really expanding into next generation services.
Hap.
Or larger catalogs of direct video on demand content.
And last one for me just now that the actors strike is over everyone thinks that content spend will start to increase next spring.
Albeit it will take some time to ramp and perhaps with a slightly less quantum then.
In the prior years, where the streamers got a bit giddy I'm. Just curious how you think that factors into any of the initiatives you have whether it's on sort of the more traditional streaming side.
Or on the match side does that act as somewhat of a catalyst to the market or does it change how you might address if you think the market evolves and its advertising focus which Eric yes, admittedly right now is more direct PG, but named returned to more open Pnp and a more.
Healthy environment with better visibility borrowing whatever happens to the economy.
Eric do you want to take better Yolanda.
Yes.
Sure I could take it so.
I think for us as it relates to.
As it relates to our business.
Excluding terrified and a few other.
Few other projects that we have going on.
We're going to be in the market for.
Finished product.
So I think number one it's not going to I think the good news is.
I think we already had a waiver for clarifier for clarifier three even before the strike ended so we were going to production was going to begin on that regardless.
Regardless of the strike.
And we're not we're really werent really long term not in the big theatrical movie game.
So for US go forward, we'll be.
We're really going to be focused on.
Acquisitions, and pickups and less on the production side, we think.
We can get a lot of value.
With a much smaller outlay licensing titles rather than investing in heavy heavy titles, obviously with the exception of of some of these really key terrify or is a no brainer and there's other things that we're working on that we've committed to that are great investments, but we think thats going to be a much smaller piece of our business going forward anyway.
Eric.
Oh, hi, good morning.
I can add that you'll go ahead.
Yes, that's right.
For our new releases.
For talent to be able to promote them and to affect their social media. So.
Everything Eric just explained it's absolutely correct in terms of our content strategy is that it really unlocked that valuable talent promotion tool.
I also think Dan kind of philosophically.
We've positioned ourselves as an artist friendly independent studio that puts the artist first and I think clarify or was an example of that to the industry, where we released.
Rated uncut movie because we wanted to bring the director's vision.
To audiences in the U S and people notice that that's been our philosophy.
If anything the strikes emphasizes that the major studios don't particularly put artist friendly at the top of their list of things that they want to be known for okay. So I think.
In a weird way.
Strikes actually helped our position in the industry.
Because we were waving the flag for paying artists treating artist right way, bringing their labors will look to audiences around the world.
All along so.
I think from a philosophical standpoint, and a positioning standpoint, it helps us as well.
Okay I appreciate all the color guys. Thanks very much.
Thanks, Dan.
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Thank you.
There are no additional questions at this time I will hand, it back to the management team for closing remarks.
Great. Thank you operator, Hey, this is Chris again, thank you all for joining us today and feel free to.
Reach out to Julian Mills that with any additional questions you might have and we look forward to speaking to you all again on our next quarterly call. Thank you very much.
That concludes today's conference call. Thank you you may now disconnect your line.
Yeah.
Okay.