Documentary-focused CuriosityStream is following the path other streamers have taken with pricing, as this week it bumped up subscription fees for both its monthly and annual standard plans.
As of March 27, Curiosity’s monthly standard plan increased from $2.99 to $4.99 per month, while the annual subscription price rose from $19.99 to $39.99 per year. New customers will automatically see the updated prices, and Curiosity plans to transition its existing monthly subscribers to the new plan over the next few months. Annual customers will see their bill update in the next 11-12 months.
According to Curiosity CEO Clint Stinchcomb, the price increases stemmed from a “rigorous” testing process that helped the company estimate the subscriber acquisition and retention impact of various pricing combinations.
“We analyzed over 3 million sessions during the course of many weeks, using nine different combinations of pricing and messaging,” he said on the company’s Q4 earnings call. With these price points, he believes Curiosity is “striking the right balance” between delivering value to subscribers, optimizing lifetime value and enhancing profitability.
Curiosity didn’t provide a year-end subscriber count, but the company reported direct-to-consumer SVOD revenues grew 12% year-over-year in the fourth quarter and 25% for the full year 2022. In Q3, Curiosity disclosed its total paid subscriber count dropped from 25 million to 23 million sequentially.
Compelling price point
Delving deeper into the price hikes, Stinchcomb noted a $4.99 ad-free offering “is still really compelling” given the current SVOD landscape.
CFO Peter Westley added the service’s previous pricing was an outlier in that “the annual price was basically less than seven months’ worth of monthly subscription payments.”
“The more typical combination is that an annual price would equal about 10 months,” said Westley. “So we were really interested to see kind of what the right mix was.” Ultimately, Curiosity ended up with “an equivalent of eight months in the annual pricing point.”
Executives also talked up the Smart Bundle plan, as the subscription package saw 32% year-over-year growth and record monthly subscriber net adds in December. With its annual $70 price tag, Stinchcomb pointed out the Smart Bundle “represents an 83% savings compared to subscribing to each service individually.”
“Additionally, based on our recent testing we found, not surprisingly, that our increased standard tier pricing generated a higher rate of Smart Bundle conversions,” he said.
Still, the bundle has plenty of room to grow, with Stinchcomb noting “less than 10% of our DTC subscribers are on this plan.”
Asked if the company has considered introducing an “ad-lite” subscription, Stinchcomb said Curiosity is focusing on a strategy to build its presence “in front of the paywall,” which will turn enhance overall advertising revenue. But at this time, an ad-lite tier isn’t on the table.
“When you look at the efficiency of your marketing spend, it’s going to be much greater if you are promoting to a specific subscription offering as compared to spreading that out over multiple options,” he said.
FAST value
Curiosity entered the free ad-supported streaming TV (FAST) space last spring with the launch of Curiosity Now, though Stinchcomb said the company has “barely dipped [its] toe in the water with third-party FAST and AVOD opportunities.
He noted while the company saw “minimal revenue” from FAST in 2022, it will be a component in Curiosity’s broader advertising and brand partnership business.
“[FAST] is not just monetization for our brand partners,” said Stinchcomb. “It’s also a platform to promote to our direct services and this becomes even more valuable as we move to virtually 100% performance-based marketing.”
Although Curiosity has “thousands of hours” of content that hasn’t run on AVOD or FAST platforms, Stinchcomb said partnerships are key to maximize the value of ad-supported streaming.
“To maximize the money here, you need to be on the top six platforms with good positioning and some promotion,” he explained. “You now have like thousands of FAST channels, some of which make no money. You don’t want to be yelling in the wind, you want to have the right alliances.”
The company recognizes the value AVOD and FAST bring, but at the same time, “we don’t want to just throw up content, even though it might mean a short-term hit,” added Stinchcomb.
Financials
Revenue for the fourth quarter amounted to $14.5 million, compared to $27.3 million in Q4 2021. Full year 2022 revenue totaled $78 million, up from $71.3 million in the year prior.
Direct revenue, which includes Curiosity’s DTC and partner direct revenue streams, came in at $8.6 million in Q4, a 10% increase from the year-ago quarter. Revenue for content licensing and bundled distribution reached $3 million and $1.5 million, respectively.
The company saw an adjusted EBITDA loss of $13.6 million, compared to a $16.3 million EBITDA loss in Q4 2021. Adjusted free cash flow improved year-over-year from a $31.5 million loss to an $8.8 million loss.