Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of our results of operations and financial condition. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” and “the Company” are intended to mean the business and operations of CuriosityStream.
Cautionary Note Regarding Forward-looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “attribute,” “believe,” “continue,” “could,” “hope,” “estimate,” “expect,” “intend,” “may,” “might,” “potential,” “seek,” “should,” “will” and “would,” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the Securities Exchange Commission (the “SEC”). All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Risk factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed with the SEC on May 16, 2022. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report on Form 10-Q, unless required by law.
Overview
CuriosityStream is a media and entertainment company that offers premium video programming across the principal categories of factual entertainment, including science, history, society, nature, lifestyle and technology. Our mission is to provide premium factual entertainment that informs, enchants and inspires. We are seeking to meet demand for high-quality factual entertainment via SVoD platforms, as well as via bundled content licenses for SVoD and linear offerings, partner bulk sales, brand partnerships and content sales. We believe we are well-positioned for growth as a digital-native video platform monetizing content across this broad revenue stack.
We operate our business as a single operating segment that provides premium streaming content through multiple channels, including the use of various applications, partnerships and affiliate relationships. We generate our revenue through six products and services: Direct to Consumer Business, Partner Direct Business, Bundled Distribution, Content Licensing, Enterprise subscriptions and Other. The table below shows our revenue generated through each of the foregoing products and services for the three and nine months ended September 30, 2022 and 2021:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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(in thousands, except percentages) |
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(in thousands, except percentages) |
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Direct to Consumer (Subscriptions – O&O and App Services) |
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$ |
7,432 |
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32 |
% |
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$ |
6,346 |
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34 |
% |
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$ |
21,985 |
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35 |
% |
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$ |
16,808 |
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39 |
% |
Partner Direct Business (License Fees – Affiliates) |
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$ |
1,157 |
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5 |
% |
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$ |
1,057 |
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6 |
% |
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$ |
3,491 |
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5 |
% |
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$ |
3,075 |
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7 |
% |
Bundled Distribution (License Fees – Affiliates) |
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$ |
2,595 |
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11 |
% |
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$ |
3,574 |
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19 |
% |
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$ |
10,250 |
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16 |
% |
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$ |
10,638 |
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24 |
% |
Content Licensing |
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$ |
10,790 |
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45 |
% |
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$ |
6,760 |
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36 |
% |
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$ |
21,692 |
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34 |
% |
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$ |
12,277 |
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28 |
% |
Enterprise (Subscriptions – O&O Service) |
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$ |
1,418 |
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6 |
% |
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$ |
39 |
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0 |
% |
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$ |
4,143 |
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7 |
% |
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$ |
134 |
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0 |
% |
Other |
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$ |
177 |
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1 |
% |
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$ |
929 |
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5 |
% |
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$ |
1,983 |
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3 |
% |
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$ |
1,053 |
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2 |
% |
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Total Revenues |
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$ |
23,569 |
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$ |
18,705 |
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$ |
63,544 |
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$ |
43,985 |
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CuriosityStream’s award-winning content library features more than 15,000 programs that explore topics ranging from space engineering to ancient history to the rise of Wall Street. Our extensive catalog of originally produced and owned content includes more than 9,500 short-, mid- and long-form video and audio titles, including One Day University and Learn25 recorded lectures that are led by some of the most acclaimed college and university professors in the world. Our library also features a rotating catalog of more than 5,500 internationally licensed videos and audio programs. Every month, we launch dozens of new video titles, which are available on-demand in high- or ultra-high definition. Through new and long-standing international partnerships, we have localized a large portion of our video library in ten different languages.
Our video content is available directly through our O&O Service and App Services. Our App Services enable access to CuriosityStream on almost every major consumer device, including streaming media players like Roku, Apple TV and Amazon Fire TV, all major smart TV brands (e.g., LG, Vizio, Samsung, Sony) and gaming consoles like Xbox. Our Direct Service is available to any household in the world with a broadband connection for $2.99 per month or $19.99 per year. We also provide a premium service for $9.99 per month or $69.99 per year. Our Premium membership includes everything in our standard service, plus subscriptions to third-party platforms Tastemade, Topic, and SommTV, our equity investee Nebula, and our new service, One Day University.
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