CuriosityStream peaked my interest, what are your guys thoughts? For those who don’t know, they are trying to be the “Discovery channel” or David Attenborough-style equivalent to netflix with documentary entertainment on a very wide range of subjects (3000+ library).
Market Cap: $724M
Public: Oct 2020 (SPAC)
2020 3Q Revenue: $8.7M (+83% YoY)
Paying Subscribers: 13M *** Some caveats to this number
Net Profit: -$6.7M
Revenue Projections: $39.5 million for 2020, $71 million for 2021
What is it?
Investing related assessments
Last earnings report
What I like:
High Potential - Obviously any competitor in the streaming space is a particularly attractive target, given the valuations that Netflix and Disney are commanding because of their dominance. A company that could grow to even 1/10th of Netflix’s size would equate to a $30-$40B company (and 57x CURI’s current valuation…).
Content Quality - The content quality of Curiosity also passes a first initial test - to trial it I subscribed today and poked around. There is the expected documentary content that largely was well produced.
What I’m concerned about:
Competitors - There’s a few other competitors in the market (The Great Courses - more classroom lecture format compared to docu-tainment of CURI).
Subscriber count - While they declare “13M paying subscribers”… they also only pulled in $8.7M in revenue, meaning 66 cents revenue per subscriber per quarter, or 17 cents/month/subscriber. Since they list a direct subscription price at $3/month online, this implies that a majority of their revenue is coming not from direct subscribers, but from bundling content (i.e. with cable subscriptions) to other companies at a severe discount. I would also wager that a good portion of those bundled subscribers have never used the service (how many “free” included things included with other products have you neglected…).
Valuation - The folds into the valuation which isn’t terrible but still is concerning given their lack of an IPO (SPAC acquisition) to soundly vet the brand new compony. However if they can meet their own projections, this valuation is fair.
Content Ownership - A last issue is their unknown content ownership. I’ve searched as much as I could and can’t seem to understand what proportion of content they own, what they lease, and what they lease out - meaning their chief product is largely a black box at this point.