Documentary and factual-based subscription streaming service CuriosityStream aims to achieve positive cash flow from operations by the first quarter of 2023, after becoming a public company in 2020 and continuing to grow revenue and subscribers.
Along with the 2023 projection, CFO Jason Eustace said the SVOD expects to maintain at minimum cash cushion of $50 million in 2022 and beyond.
“Since becoming a public company almost two years ago, we’ve significantly grown revenue and subscribers, developed a multifaceted revenue stack, and built the world’s best factual content library,” said Clint Stinchcomb, CuriosityStream CEO, in prepared remarks Thursday, adding that the business “is much more robust” than 24 months ago.
As of the end of March, CuriosityStream had around 24 million total paid subscribers, up 50% year over year. It counts users in over 175 countries. Revenue of $17.6 million was up 77% from $9.9 million Q1 of 2021. However, the company reported a net loss of $15.9 million, which improved over a $18.8 million net loss in the year ago period. It reported EBITDA loss of $19.3 million, an increase over an EBITDA loss of $15.1 million in the first three months of 2021.
It increased its guidance for the first half of the year to revenues between $38 million and $40 million and an EBTIDA loss range of $35 million to $33 million.
Ad-supported content part of path to cash positive
In laying out three building blocks for how the company plans to get to cash positive, Stinchcomb highlighted an increasing focus on engaging an audience in front of a paywall, as it looks to boost viewers to subscription tiers and monetize advertising and sponsorships.
“We are doing this through expanded rollouts of our FAST and Pay TV channels that focus on genres ranging from science to history to nature to kids, and also through our enhanced engagement in AVOD and audio,” he said, noting the developments are part of an effort to reduce spending on direct paid marketing.
In March Curiosity launched Now Free, an ad-supported streaming TV (FAST) channel, in partnership with LG – the company’s first foray into free streaming.
The company plans to expand distribution and promotion through additional FAST channels later in 2022.
As revenue builds in 2023 from ad-supported services and enhanced promotions help SVOD sales, the company expects revenues and profits will continue to increase.
“We also intend to continue to explore alliances and combinations that would result in the exposure of our content on a global-scale promotional platforms,” Stinchcomb said.
With 10,000 hours of content in its library, he said that flexible rights across content allows Curiosity to “be swiftly responsive" to the needs of subscription-resistant consumers through distribution partners.
Not competing in content spending war
Content of course is one of the pillars for Curiosity’s strategy, but executives emphasized that the company’s focused of factual-based content means it’s playing on a different field and not competing in the content spending war.
“We are not, for example, bidding on ever-escalating sports rights or scripted series. In contrast, Curiosity operates within a more predictable, less competitive content acquisition and production environment,” Stinchcomb said.
“While the competitive battles rage on between the scripted content streamers, Curiosity now stands alone as the reliable destination for on-demand premium factual content” across genres like history, science, nature technology and more, he continued. “This is a good place to be.”
And Curiosity feels that by the end of 2022 most of its heavy lifting in terms of content spending will be behind it, at which point it will have invested over $188 million on original productions and acquired content.
It also spent between $15-20 million on acquisitions of One Day University (acquired in May 2021 )and Learn25, as well as partnerships with Spiegel TV (which expanded its footprint in Germany)and Nebula, that brought in additional content it can still cultivate further.
According to Stinchcomb, the original production cost or "on-screen" value of the service’s content “is over 5 times greater than what we actually paid for it.”
“We have identified a path forward which will allow us to continue to delight our subscribers by refreshing and replenishing the Curiosity library while reducing our content spending to a level that can easily be accommodated within positive cash flow from operations in 2023 and beyond,” he continued.
Asked by analysts on the earnings call about how a slow down in production of new content could impact subscriber growth going forward, Stinchcomb said the company has “a strong critical mass.”
“We’ve built this library much faster than we anticipated because we acquired more content than we had originally anticipated” along with tuck-in acquisitions that further bolstered the library.