CuriosityStream in the first quarter saw progress in its direct-to-consumer business, bolstered by new distribution agreements with international launch partners.
As with its Q4 2022 earnings, Curiosity didn’t reveal its total paid subscriber count (in Q3 it reported total subs dropped to 23 million). But CEO Clint Stinchcomb said on an earnings call the company added “several million paying subscribers” through bundled distribution partnerships across five continents.
New launch partners include Amazon’s Prime Video Channels in India, Mexico’s Izzi Telecom, Fetch TV in Australia, and Ziggo, the largest MVPD in The Netherlands, among others.
Curiosity didn’t go into too much detail about the individual agreements, but Stinchcomb noted these distribution deals are typically multi-year agreements with a fixed fee.
“We expect meaningful improvement in our revenues from distribution partners moving forward as our full product set – from localized channels to integrated app offerings to direct licensing – creates a range of monetization paths for both us and our partners as we connect with audiences across the globe,” said Stinchcomb.
Curiosity also has a free ad-supported streaming TV (FAST) channel – Curiosity Now – that launched last spring with LG as its initial distribution partner. Stinchcomb said the company has “dipped [its] toe” in the FAST space and eventually intends to launch Curiosity Now internationally.
Price points
Curiosity reported Q1 earnings just a few weeks after implementing a price increase for new subscribers. As of March 27, Curiosity’s monthly plan rose to $4.99 per month while the annual plan increased to $39.99 per year. No price changes were made to the Smart Bundle, which bundles seven services for a $70 annual fee.
Stinchcomb noted the early results of Curiosity’s higher price points “have been encouraging.” Direct subscription revenues were up year-over-year, even as the company “significantly reduced marketing investment during [its] extensive pricing tests.”
He added Curiosity this quarter is testing upgrade options with a subset of existing customers. But since the majority of subscribers are on annual plans, “it will take some time” before the price increases impact the company’s financials.
“As we've looked at the data, we weren't surprised to see slight decline in conversion rates and retention,” Stinchcomb said. “But we're also seeing a shift to higher percentage of monthly plans… and a shift toward Smart Bundle subscriptions, where we do not change the price.”
Ultimately, Curiosity’s strategy revolves around providing factual entertainment, Stinchcomb said, whether it’s through direct subscriptions or working with bundled partners.
“I think that we saw early on that it's really difficult to build a business that is 100% reliant on pure direct subscription revenue,” he said. “So the path to victory, the key to success is to take a step back and really consider what business you are in.”
Financials
Consolidated revenue was $12.4 million, compared to $17.6 million in Q1 2022. Direct revenue, including Curiosity’s DTC and partner direct revenue streams, reached $8.6 million. Content licensing and bundled distribution revenues amounted to $2 million and $1.5 million, respectively.
The company reported a net loss of $7.8 million, compared to a loss of $15.9 million in the year-ago quarter.