CURI - NASDAQ

Good day to everyone. My name is Devin, and I will be your conference operator today. At this time, I would like to welcome everyone to the CuriosityStream Q2 2022 Earnings Call. [Operator Instructions]. Ms. Denise Garcia, Investor of Relations, you may begin your conference.

Thanks, Devin. Welcome to CuriosityStream's discussion of its second quarter 2022 financial results. Leading the discussion today are Clint Stinchcomb, CuriosityStream's Chief Executive Officer; and Peter Westley, CuriosityStream's Chief Financial Officer. Following management's prepared remarks, we will be happy to take your questions. But first, I'll review the safe harbor statement. During this call, we may make statements unrelated -- sorry, during this call, we may make statements related to our business that are forward-looking statements under the federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. Please be aware that any forward-looking statements reflect management's current views only, and the company undertakes no obligation to revise or update these statements nor to make additional forward-looking statements in the future. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our Investor Relations website as well as the risks and other important factors discussed in today's press release. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended June 30, 2022, when filed. In addition, reference will be made to non-GAAP financial measures. A reconciliation of these non-GAAP measures to comparable GAAP measures can be found on our website at investors.curiositystream.com. I'll turn the call over to Clint.

Thank you, Denise. I'd like to thank everyone for joining our second quarter earnings call. Also joining us today is our COO and General Counsel, Tia Cudahy; our Chief Strategy Officer; Devin Emery and of course, our new CFO, Peter Westley. Peter joined us in May from Blum Capital Partners, where he spent the last 10 years as a partner and managing partner. Peter brings with him 30 years of experience in financial services, working with media and technology companies. Recently, as Chairman of Avid Technologies, whose solutions empower media creators, Peter helped lead the company through a period where its market cap increased from $200 million to more than $1.3 billion. I've already seen Peter's insights in the strategy and shareholder value creation start to positively impact the way that we are managing the business and charting our future direction. A players can make a real difference, particularly for companies of our size. Not only do they perform well in their role, but they tend to help elevate the performance of their peers and their teams, and true As tend to hire mores As, which makes the overall organization stronger and better. As a globally focused organization with a multifaceted revenue stack, we made clear progress across the board during the second quarter. Due to better-than-expected financial performance in Q2, we exceeded our first half EBITDA guidance and delivered first half revenue at the high end of our guidance range. We reduced cash used in operating activities by 50% from Q1 to Q2, while revenue grew strongly on both a year-over-year and sequential basis. We ended the quarter with $78 million of cash and investments on our balance sheet. We continue to grow the business in Q2, with revenue up 46% year-over-year. We ended the quarter with approximately 25 million paying subscribers, up from $24 million last quarter and added hundreds of new titles to our critical mass library of over 15,000 video and audio assets. We also advanced a number of strategic objectives during the quarter as we focused on maximizing the performance of our global streaming service, our best-in-class content and our promotional outreach. Under Devin Emery's leadership, our Smartest Bundle in Streaming premium SVOD package gained further traction in Q2 with a 215% increase in daily average upgrades since the rollout of our new upgrade path. As a reminder, Smart Bundle subscribers get 6 streaming services for $69.99 a year, a 79% savings compared to subscribing to each service individually. This represents both an incredible value for our subscribers and a compelling financial proposition for CuriosityStream. With the Smart Bundle, the average revenue per user is multiples greater than that of our standard service. We recently announced that da Vinci Kids, an educational streaming and interactive learning platform will join the Smart Bundle as our seventh service later this summer. The expanded Smart Bundle, which offers 35,000 to 40,000 additional episodes, will have more value and smart entertainment options for families than ever before. With Curiosity's kids collection plus family-friendly viewing across all the bundled services and now the extensive kids programming from Da Vinci Kids. We expect continued strong uptake of our Smart bundle as Devin and his team execute on our content monetization strategy. As we discussed last quarter, we are increasingly focused on building audience engagement in front of the paywall through integrated multi-platform brand partnerships, additional fast channel launches, AVOD, audio and through our social channels. In Q2, we had our strongest advertising quarter-to-date in part due to our fast channel strategy. In light of the flexible rights we control across our thousands of hours of content, we can be swiftly responsive to the needs of subscription resistant consumers directly and through our distribution partners. Under Rob Burk's leadership, we continued to release groundbreaking original content across a wide array of factual genres and formats. During the quarter, we premiered the second season of Engineering The Future with award-winning actor, David Oyelowo, a thrilling look at the new breed of visionaries creating the technology of tomorrow. From next-gen electric vehicles and hyperloops, to the Metaverse and Beyond. Our in-depth analysis of contemporary history also allowed us to quickly create a special Putin and the Oligarchs, a timely deep dive into the secret world of Russia super-rich and the man who ultimately rules over them. And our ongoing collaboration with some of the world's best science filmmakers allowed us to reach even deeper into our past premiering 2 new episodes of our ever popular Ancient Earth, that brings the long loss creatures of pre-historic Antarctica to life through ice continent, archaeology and state-of-the-art CGI. Looking ahead, we're in the finishing stages on a number of exciting new productions, including 4 gamers, the story of an unlikely group of British women who develop tactics to defeat , and Science for Evil Geniuses, a hilarious real-world test of super villain science and engineering, starring Game of Thrones actor Paul Kaye. We're also making significant progress in our strategy to monetize our substantial factual audio content library. With thousands of audio titles we acquired from One Day University and learned 25 last year is the foundation, we were thrilled last month to launch the Curiosity Audio Network in partnership with iHeartMedia, the #1 podcast publisher globally according to Podtrac. Our first foray in the podcasting Curiosity Audio Network will feature original content as well as podcasts to complement programming from our library of documentary films, shows and series. Later this year, we will premiere our first original podcast coproduced with iHeartMedia, mixing pop culture, history and true crime. With an expanded look into the mystery surrounding the life and death of Cold War Cowboy, Dean Reed. It's a follow-on to the Curiosity original feature documentary Red Elvis, available exclusively on CuriosityStream. Also upcoming is the untold history of sports in America, which dives deep into the role sports have played in shaping the American psyche. We couldn't be more excited to make our move into audio in partnership with the #1 podcast publisher in the world and look forward to delighting our subscribers with Curiosity catalyzing audio content this year and beyond. Looking ahead, with our critical mass factual content library, tens of millions of global subscribers, a sizable cash position and an improving financial trajectory. I really like our hand. While the competitive battles rage on between the scripted content streamers, Curiosity stands alone as a reliable destination for on-demand premium factual content in history, science, nature, technology, human adventure, space, medicine and exploration. This is a good place to be. We look forward to continuing to fulfill our mission to provide the world with quality entertainment that informs and chance and inspires. Before turning the call over to Peter for a more detailed discussion of our financials, I'd like to thank our dedicated employees, partners and shareholders for their continued support. Peter?

Thanks, Clint. It's great to be here on my first call as curiosity CFO, and I'd like to thank the entire team for the warm welcome I've received since joining the company in May. Before getting into our results, I'd like to take a minute to provide my thoughts about the company and the opportunity ahead of us. Over the past several years, CuriosityStream has built an enduring mission-driven global media brand. We've established ourselves as a global category leader in factual entertainment with tens of millions of subscribers worldwide and a massive library of factual audio and video content. Our segment of the market is inherently attractive with content that has an exceptionally long shelf life global appeal is far less costly produced than most general scripted entertainment and sports content and is brand safe for advertisers. We've also developed a diversified revenue stack to maximize our opportunities to monetize that content. Last but not least, John and Clint have assembled a team of world-class leaders, including our Chief Strategy Officer, Devin Emery and Head of original content, Rob Burk, who continue to extend our category leadership through innovative content, service bundles and partnerships. All of these elements combine to make CuriosityStream a compelling opportunity. Turning to our second quarter results. I'm pleased to report Q2 revenue of $22.3 million, up 46% year-over-year. International growth was particularly strong, up 136% year-over-year. From a product perspective, our growth was broad-based, with each of our business lines seeing sequential growth over Q1. Our strength in advertising was particularly noteworthy during the quarter as we started to gain traction in generating revenue in front of the paywall. We're excited to have another source of revenue for monetizing our content and think that our diversified revenue streams are an important element of the CuriosityStream story. As Clint mentioned, for the first half of the year, revenue was at the high end of our previously provided guidance range and EBITDA exceeded guidance. Q2 gross margin of 41.9% and created more than 900 basis points relative to Q1 gross margin of 32.8%. As we improved the margins in most of our business lines and saw particularly strong growth in some of our higher-margin business lines. We also significantly reduced our cash burn in Q2 with net cash used in operating activities of $5.9 million, a 52% reduction compared with the first quarter. At the end of the second quarter, cash, restricted cash and available for sale investments totaled $77.8 million. While we expect some lumpiness in our cash flow in the coming quarters, we will continue to take a hard look at all of our spending for marketing to content to G&A, along with our commercial partnerships as we look to reduce the cost base of the business and improve our overall economics. Before turning to our outlook, I should mention that we took a $3.6 million noncash charge in Q2 related to the impairment of goodwill and other intangible assets. We do not believe this accounting charge has an impact on our business going forward. Looking ahead to the third quarter, we expect revenue of $21 million to $23 million and an EBITDA loss of $9 million to $11 million as we continue to focus on improving the company's financial profile. Like many other companies in the media and technology sectors, we're looking to do what we can to reduce our cost base, improve cash flow, and reduce long-term commitments to increase our flexibility and optionality going forward. With that, operator, let's open the call for questions.

[Operator Instructions]. Your first question comes from Laura Martin with Needham.

I want to start with you on advertising, as you know, am a super fan of advertising revenue. Could you size for us how big ad revenue is? Is it up to 10%? Or am I being way too aggressive? And I'm very curious in your go-to-market, did you end up hiring direct salesmen, did you go programmatic? And third, as you know, Disney and Netflix are coming into this space, I'm very interested in your learnings and specifically challenges that you didn't expect before you enter the advertising business? And then what was easy that was sort of easier. So I'm sort of interested you're talking more about your experience to date in adding this advertising revenue stream? That's my first question.

Excellent question, Laura. I appreciate the opportunity to talk about that. And so I would say as we look at advertising, certainly, revenue is vitally important. And we see the advertising component continuing to grow, we see it growing to the kind of high single-digit percentage of our overall business. And for us right now, it's obviously revenue is important, but it's also about the quantity of partners that we have and the quality of partners that we have and the category of partners. So what we're seeing over Q2 and Q3 is increases in all of those. It's also for us multiplatform. It's fast, it's AVOD, it's the social channels, it's audio and even pay TV. I mean we have pay TV channels as an example, running where we have the flexibility to light up advertising and sponsorship. But -- we haven't yet as we're really trying to maximize viewing in those regions. But we will light those up and we'll launch more fast and we'll expand AVOD. We're brand safe and as such, attractive. And the second and third quarter, we're good sponsors in the financial categories, electronic category and even in automotive. And so that's exciting. I would say that one of the many things that gives us confidence here beyond just the monetization opportunities around brand safe factual content is in Devin Emery -- Devin was really key architect behind Cheddar's brand partnership strategy really kind of elite and his ability to kind of architect those and make sure that we provide our partners with everything that we promised them. We do have 2 consultants right now helping us with outreach there. We will hire a strong full-time person to kind of lead that team going forward. But as we sit here today, we like the progress that we made. We think there's a lot of upside and as we grow, obviously, we'll move into more programmatic and take steps to build as the opportunity builds for us. That's a lot of words, Laura. Hopefully, that was helpful.

Yes. Super helpful. It sounds like you're equating the word sponsorship with advertising. So you're doing sponsorship so far, basically, right?

Both, yes. But yes. But yes, for us, it's a higher return on sponsorship packages for sure.

Okay. And then my other question is -- I don't know if this goes to maybe, Peter, but are we still committed to the metric you laid out last quarter, which is cash from ops positive by 1Q '23? And Peter, specifically for you, you remind me why the accounting in this firm is revenue goes up by $7 million and cost of revenue goes up by $7.3 million, which makes it look on the P&L, like every dollar you earn in revenue, you pay out more than that in cost of goods. Can you remind me why that happens every quarter and how the accounting works?

You want to take the first about the goals?

Yes. I think as it relates to moving to positive from operations, absolutely, our goal and our target, Laura, really important. And I think we made a lot of progress toward that objective in this quarter. All of that said, if there are opportunities that come up for us over the next year where we can make some investments that we think are going to have a meaningful long-term payoff we want to preserve the ability to potentially go below $50 million balance, but we are laser-focused on getting to positive.

Yes. In terms of the second part of your question, I mean, if I look at just Q2 versus Q1, we had revenue growth of just a little shy of $5 million, and our cost of revenues grew a little over $1 million, and we had expanding gross margin over the quarter. So I'm happy to take this up in a follow-on conversation, but I'm not sure I'm following the argument that the cost of revenues grew faster than the revenues.

There is an accounting...

We can do that offline. I'm looking at year-over-year in both first quarter and second quarter, your cost of revenue year-over-year goes up more -- than your revenue. But it's an accounting question, we can do it offline.

Okay.

Your next question comes from Tom Forte with D.A. Davidson.

So Clint, I have one exciting question, and I apologize if I have one boring question. So the exciting one first. So you touched on this a fair amount in your prepared remarks, but I wanted to follow on this. Your favorable position against your SVOD peers because you're relatively low content costs and your low monthly pricing to the consumer. I would love your current thoughts on your pricing model.

Well, As we mentioned before, we think we offer a tremendous value proposition right now for consumers. And so we believe that we have pricing flexibility, and we plan to take advantage of that, Tom.

All right. And now the boring one, and I apologize for this point. But all right, how are you impacted at the sales line and its operating expense line by the strong U.S. dollar?

Yes. So I don't have the specific answer to that. I can tell you, even though we have -- obviously, international is a big part of our business. It's about 1/3 of our business this year. A lot of that is U.S. dollar-denominated still. So I'm going to need to come back to you, Tom, with a specific answer on that question. But it's not the -- it's not the full extent of the kind of international exposure that we've got. There is a fair -- quite a bit of U.S. dollar-denominated revenue and expense there.

And your next question comes from Peter Henderson with Bank of America.

So I'm just curious on your guidance for Q3. At the low end of the guidance range, there is potentially a decline sequentially and just wondering if you could talk through the pieces there a little bit? I mean, is it program sales that's going to drive that decline? Or is there like some sort of conservatism built in about the advertising environment? Just any sort of color you can give there.

Look, I think that there are some different puts and takes in terms of the different business lines. I do think inherently, there is some conservatism in there. I don't think as like kind of look at it. I don't know if there are any specific items we want to call out at this time. I think it's more kind of general conservatism. I don't know if you have anything you'd like to add to that.

Yes. There are always, I think, -- we do a lot of third-party partnerships. And there's certainly timing issues around some of those, Peter, as you're aware that can impact a single quarter. And so we had broad growth across all of our business lines from the second quarter. Foundation is strong. Our cost structures is getting, I think, stronger every day, particularly with Peter's management. And I think that -- I think it really comes back in mostly to the timing and scope of certain third-party agreements, whether those are distribution agreements, content licensing agreements, certain sponsorship agreements.

Yes. And we also obviously had quite strong growth in Q2 as well.

Yes, yes. No, sure. That's helpful. And then I guess just one quick one beyond that. What do you see as sort of the revenue opportunity for podcasting. And I think you said podcasting is going to launch later in the year. I mean, any -- would that -- any more specific timing on that?

So Well, we've actually -- we're actually commercially launched now.

Oh, You are. Okay, sorry.

Yes. So I apologize for any confusion around that. We have some higher-end original specials that are coming out later this year. I think we are realistic about what's possible in the podcasting world, but we love the economics as they relate to us because as we produce video content, it is -- it's not particularly high incremental cost. There's not particularly high incremental cost to provision audio content that can be related to that video content as well. And so as we have some terrific IP, see some great opportunities to exploit that in audio. And we think that over time, audio will be a nice mix of our overall advertising and sponsorship revenue. And it's just -- it's certainly -- it's another growth area for us, and it's an excellent way to both generate revenue and promote to our subscription video-on-demand service and other CuriosityStream services.

Your next question comes from Darren Aftahi with ROTH Capital Partners.

Congrats, Peter, on your new role. 2 if I may. First, can you speak to the, I guess, size and growth in the direct sub business? And then two, as it pertains to kind of mix, like how should we think about gross margins maybe in the third quarter? It looks like you're guiding to kind of flattish revenue at the midpoint, but a $2 million EBITDA improvement.

Yes. In terms of subs, I mean, I think we saw growth in subs in Q2 and I think we expect to see continued growth in subs. I think one of the most exciting things happening in that part of the business, in particular, is the growth in the Smart Bundle we've got, which is obviously a much higher price point and a more attractive economics to us overall. So whether it's signing up new subscribers into that package or getting people to upgrade that is -- that's going to be a continuing part of the story. What was the second question?

Margin. So...

In terms of margin for the -- I think the third quarter margin is going to be in line with what we saw really in the first half of the year. I don't think it's going to be a big deviation from what we've seen in the first half. We don't expect the business mix to change dramatically during Q3 really. So we're not seeing much of a -- not assuming much of a significant change in margin. We do think that the EBITDA improvement is primarily going to be driven by a reduction in Q3 on the cost side of the equation.

Darren, did we answer your questions, Darren?

Yes. Perfect.

And your next question comes from Dan Kurnos with The Benchmark Company.

Welcome, Peter. Just maybe to parse into that a little bit more your -- just your comments there, Peter. And then also the answer you guys gave a couple of questions ago around sort of the guide and the outlook. Clint, you said you guys want to leave a little powder dry in case there are any opportunities. I'd be curious if you could shed a little bit more light on how you would be looking or what kind of opportunities those might be in this market? And alternatively, Peter, as you kind of continue to go over with the fin- tooth comb and improve the cash flow outlook. Are there any near-term trade-offs you're making between growth and cash that could maybe play out in the longer run, but in the near term, if there's any damper there?

I'll take the first part, Dan. Thank you. And so as is probably no surprise, we got to look at, I think, nearly every factual content idea that any producer has around the world. So we got to look at lots of different ideas. We get -- we think the first or second look at lots of different content libraries. So there are a lot of opportunities that are presented to us. We want to be really thoughtful about how we consider our cash. And all I was trying to say there at the beginning was if there are opportunities that our Board deems to be in the best interest of our shareholders that would require us to potentially dip below $50 million in cash as an example. And that is something that we would look at. We're not just -- not look at it in light of that objective. So is that helpful?

Yes. No, that's helpful. And I guess just maybe in context of how you and/or Peter are thinking about kind of growth versus cash flow trade-offs maybe in the near-term understanding? Because I do want to ask a follow-up on some of the channel partner and partner expansion strategy.

Yes. And I think that is one of the ways that we're thinking about it. So we're confident that we can continue to grow in all areas. And the environment that we're in right now, I think it's rewarded our global approach to this business. As we know, factual content travels well. language as well. The -- it has a considerable shelf life cost structure is very palatable. We have this and we've built this critical mass library much faster than we anticipated. So as it relates to channel partners, we still think we have a lot of a lot of upside there, whether it's working with kind of traditional distribution partners. I mean we have great new partners that came on over the last few months in Latin America and Scandinavia, and in India. And then even as it relates to the ala carte app partners and channel store partners, I think if you look at the makeup of our direct subscribers, as an example, we have a much higher percentage of kind of pure direct subscribers compared to most other services. So most other services other than Netflix other than Apple, as an example, they get most of their subscribers from the app stores from the channel stores. And so we do see a lot of upside there. We've just not worked within that closely over the years. We see upside there for CuriosityStream. I also see a lot of upside there for One Day University. And we have really today, just one third-party partner carrying One Day university. Caring for a few months, the growth has been considerable and really encouraging. So we do see significant opportunity not only in the advertising space, but also traditional distribution partners and then with the app stores and channel partners. Was that what you were getting at Dan?

Yes, you kind of took a lot of the answer. I was -- the question I was going to ask, Clint, which is good. I really just in this environment where people are worried about SVOD and you guys continue to grow through it. I was kind of also curious to the extent that other people are coming to you because you have a unique offering relative to the abundance of scripted that's out there, but also with Da Vinci Kids coming on how you answered the pricing question a little bit, but just how you're thinking about sort of breaking up the bundle offering sort of maybe parsing things out, adding an ODU , kind of slicing and dicing to get a little bit more, I don't know, not holistic pricing or just how you can try to maximize dollars into sort of uncertain economic environment?

Yes. And so since we're fortunate to have Devin Emery here today who's architected our premium tier, I think it would be good for Devin to talk a little bit about that. So just as a review for everybody else. We have our standard service anybody in the world today can sign up for $2.99 a month or 1999 a year. We think that's an extraordinary proposition that has a lot of flexibility built into it for us in the future. But we've been encouraged by the growth in our premium tier, and that's been very deliberate. And Devin, why don't you give a little -- provide a little color there?

Yes, definitely. So we have a bunch of partners across a lot of different genres, as Clint was talking about earlier. And our growth rate since we've rolled this out and improved our upgrade flow has been very significant as we were giving you a few numbers earlier. We also have a ton of optionality in how we work with those partners and how we drive people into upgrading or signing up for those tiers. And so all of this falls under how we increase our ARPU on the direct service. So we think about that, obviously, in terms of where our pricing strategy is across the board. We also think about it in terms of what our upgrade strategy is because our ARPU is multiples higher on the premium tier, we are focusing a lot of our effort on the 3 different ways that we can get people to sign up. And those 3 different ways are people who are coming in to sign up for CuriosityStream, who we can get to choose the higher-priced SKU. It is people who sign up for CuriosityStream on the standard plan who find an upgrade path. We have been very successful so far in running promotions to standard planned users within our app to tell them about the upgraded services they can get and increase -- or improving what that flow is. We've been very encouraged by that. And we also have the opportunity to market as you're saying, the Smart Bundle, but also some potential different types of bundling that we have. One Day University is in the Smart Bundle as is Nebula, which we own a minority stake in, but we also can work with partners in slightly different capacities at slightly different price points. So we view pricing strategy as well as marketing strategy around this as a very important piece of what our overall ARPU growth plans are.

And our final question comes from Jim Goss with Barrington Research.

All right. Thank you for including me. You -- I know the bulk of your content was established early, but even with Netflix, there's going to be a lot of content and unless there's something new, it's hard to really attract and retain customers. And clearly, you can't save your way to prosperity. I'm wondering if -- and you've already talked about a lot of this, but -- is there a -- can you rotate the mix of content? And is it -- is there a share of owned versus license that you have more flexibility with? And do you slide some of that content into the premium tier from the general tier just as a way to push people into that higher-priced product? That would be the first area I want to talk about.

That's a great question, Jim. And I would say that with the content that we have today, we can continue to roll out 4 to 6 new titles a week well into 2023. Obviously, we'll have content and production that serves to supplement that. And then to your second point, yes, I think that there are -- I think we're getting better every day at personalization, at resurfacing certain content to particular users. With thousands and thousands of titles that we have that becomes, I think, ever more important. I mean, it would be hard for anybody to get through 7,000 titles in a year, but we want to make sure that as they're watching, they're having kind of the best experience possible. I think just last Friday, we premiered The Rise of Hollywood, which is just an extraordinary 6-part series about the history of Hollywood, a production partner there, Stephen David Entertainment, same producers who created The Men Who Built America. I mean that's beautiful. I would rank that up against anything you'd watch on any other media service anywhere in the world. And so that's certainly a premium content that we could move around to help compel people to different tiers. Did I -- did we hit all -- did I hit your questions? I just want to make sure that we give you a full answer there, Jim.

Well, probably to the extent that there is this large base of content, do you try to hold some of it back at all to -- unless you're at a premium tier perhaps to allow people to maybe feel it's fresh and it's revived even if some of it's been available, moves out, it comes back in maybe later on? Or do you -- are you still in the practice of keeping it all available all the time? I know that's been a big effort.

Yes. So to answer about the premium tier piece, Currently, we are not making any differences in what is available through CuriosityStream, whether you are on the standard or premium tier. There are other benefits that you get on the premium tier, including the Smart Bundle, including unlimited concurrent streams, assuming you're all in the same household and a bunch of other things that we're building there. But what we don't want to do is devalue the value of our standard plan. And so while there will be things that we experiment with in the future around content availabilities for potential interactive experiences that are available only to premium tier subscribers. Right now, we are not looking at holding back content only available to them because, again, we don't want to devalue our standard plan. In terms of having content come on the platform and go off the platform. Not exactly, but we have been putting a lot of work on the product side into making sure that our content recommendations are pulling a lot of our evergreen and library content that people may have not seen when it came out back into their fees. Obviously, we are growing quickly. And so we often and always have a lot of new users. And so content that might have not been new when they are signing up for the service, but it's still something that we know has engaged with our audience. We want to make sure that, that is hitting their fees. And if they miss something because they're not signing in for a week, but that is also hitting their feeds. So we are putting a lot of work on the engagement side just to make sure that our recommendations and discovery do, I think, exactly what you're getting at there, which is make sure that the library that we have, while always available is easily discoverable.

Okay. And one last thing. . And I think that some of the technology behind the video. I wonder if you could talk about how it might relate to your role and how it might factor into CuriosityStream. If there's any way or if it's not directly applicable.

Yes, sure. So I would say that -- the applicability is really in the kind of the exercise that we did there and what needs to be done here, which is really taking rather than saying that there's huge benefits about the way the 2 companies could work together. Really, I think where there is a lot of benefit is the exercise we went through to think through the business model and the evolution of the business model and how we could create value for shareholders by having a more profitable, more predictable business model by making some changes to the way we went about our business and taking a hard look at the cost structure and the strategic investments we needed to make to create value and to create a -- put the company in an even better position than they were 5 years ago. So it's more kind of an intellectual framework rather than a kind of business synergies, if you will, but I think it's still helpful to kind of go through that analysis and look at the business model here and think through cost structure and all of the strategic partnerships and relationships we have to look forward to see where should we be leaning in and where should we maybe be pulling back a little.