Chicken Soup for the Soul Entertainment, Inc.
Q3 2019 Earnings Call Transcript

Published: 15 Nov 2019

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to the Chicken Soup for the Soul Entertainment’s Third Quarter 2019 Earnings Conference Call. [Operator Instructions]I would now like to hand the conference over to Jeff Majtyka, from Ellipsis IR.

[Jeff Majtyka:]

Thank you, Andrew and welcome everyone. With me on the call today are Bill Rouhana, Chairman and Chief Executive Officer; and Chris Mitchell, Chief Financial Officer.To review results for the third quarter as well as provide business update and an update on the Crackle Plus joint venture. Following this discussion, there will be a moderated Q&A session open to the participants on the call.During this call, management will make forward-looking statements. Following-looking statements include but are not limited to statements regarding expectations, intentions and strategies regarding the future. Included in these risks are forward looking statements based on management's current expectations and assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from projected results.Given these uncertainties, listeners are cautioned not to place undue reliance on any forward-looking statements contained in this conference call. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release, which also applies to the content of this call. Additional risk disclosures can be found in the company's filings with the SEC.As a reminder, on May 14, 2019 Chicken Soup for the Soul Entertainment created a joint venture with the Sony Pictures Television launching Crackle Plus. On today's call, management will make comments on certain GAAP-based and non-GAAP pro forma financial information of the combined company that includes Crackle’s financial results for the relevant periods prior to the Closing Date, as if the acquisition occurred on January 1, 2018.The non GAAP financial measure the company uses is adjusted EBITDA. Management believes that adjusted EBITDA provides useful information in that it excludes amounts that are not indicative of the company's core operating results and ongoing operations and provides a more consistent basis for comparison between periods. The earnings release contains a reconciliation of adjusted EBITDA to net income or loss, which is the most directly comparable GAAP measure.Please refer to the Company's recently filed amendment number one to the current report on Form 8-K/A filed with the Securities and Exchange Commission on July 30, 2019 for further details relating to historical financial statements of Crackle Inc and pro forma financial information of Crackle Plus, if you had not had chance to review this Form 8-K now it would be good time to retrieve it.I would now like to turn the call over to Bill Rouhana, Chairman and CEO, Bill. Please go ahead.

[William Rouhana:]

Thanks Jeff and good afternoon everyone, glad to have Jeff and the Ellipsis team here with us today.We had a highly productive third quarter that provides solid early validation of our mission to build a leading AVOD network, supported by our valuable content library and our unique distribution and production operations.We successfully executed in all four areas of our Crackle integration plan. In about five months, we've taken a business losing approximately 50 million a year and put it on the cusp of sustainable profitable growth. At the end of the third quarter, we began to invest in initiatives that enable that long-term growth. Early in the fourth quarter, we are also beginning to see the fruits of our efforts to transform our distribution and production operations as we build a low risk high value content engine to fuel our AVOD networks.With my time here today, I want to provide an update on our execution put the third and fourth quarter results and developments in context and offers some bigger picture color on the opportunity in front of us in what is a very dynamic AVOD market. Chris Mitchell is here with me as well. And we'll add some color around the quarterly results, and then we look forward to your questions.So let me first provide a quick summary of results. We delivered record topline performance with revenues up more than 40% over Q2, led by our first full quarter of operations of our Crackle Plus networks despite transitional and seasonal impacts. Net revenue totaled 17 million of which 14.4 million was contributed by our online networks business. And the balance primarily came from distribution of television and film content through screen media.While this represented record topline performance for our company, it was lighter than we would have liked due to have some temporary technical issues associated with the update of our branding of the Crackle app on the Roku platform. As a result, a sizable number of ads were not served in the later part of the third quarter, resulting in about $1 million in revenue impact.The issue has been fully rectified and ad performance normalized on our Roku app before we exited the quarter. However, this issue, combined with lower seasonal viewing trends we usually see in Q3 impacted our performance. We're pleased to report that seasonal trends have corrected as well. Total streams on Crackle grew nearly 17% in October over September, returning to levels last seen in July, and among the networks high for this calendar year.Some of this improvement is due to the tremendous early success of our new series Going From Broke, which I will discuss shortly. But overall in the five months since Crackle Plus subsidiary closed. Unique visitors to our networks are up 21% and total streams were up 9% eCPMs remains strong in the $8 to $20 range on Crackle. And we do expect Popcornflix rates to approach those levels. As we have begun to execute on our initiative to consolidated sales stack onto the crackle platform.Midway through Q4, I can confidently say that we expect continued strong growth in both audience and revenue as we close out the year. Adjusted EBITDA for the third quarter totaled a modest loss of 4 million. There are several factors to consider in evaluating our near term EBITDA performance. The first was the unexpected impact of the Roku glitch, which is now been rectified.Secondly, we began to wrap up our network marketing efforts partially in connection with our series Going From Broke. Third, we are not yet benefiting from the changes in our production model, and are carrying modest losses of approximately $1 million - year-to-date as we reconfigure it. Finally and most significantly, we will not be recognizing approximately 4 million of revenue and approximately 3 million have adjusted EBITDA associated with the library acquisition until the end of Q4 instead of Q3 is originally anticipated.Despite lower adjusted EBITDA than we expected, Q3 was a good transitional quarter that provides an early glimpse of the significant ramp in growth we expect to see in 2020. In the near term, it's worth reflecting a bit on what we're doing and why. As you can see, our transformation is happening in two parts at the same time, which isn't easy to do, but will prove valuable in the coming quarters.The first and most important aspect of our transformation is our focus on the business of building and acquiring ad supported video on demand networks or as we've been referring to AVOD. Make no mistake that AVOD is the current and future growth of this company. I'm sure you're all well aware of the enormous amount of activity in the streaming world where much of the focus is on the global subscription VOD, or SVOD battle, SVOD war, now at hand among Netflix, Amazon, Apple TV, Disney+, Hulu, HBO, Max and more.Consumers have choice now, and they're going to pay for the best options to get their content where and when they want it. As consumers cut loose from the cable bundle and move to streaming subscriptions, the traditional ad supported TV model and $80 billion business would appear to be at risk and it is. Consumers not only have great choice for where to spend subscription dollars, they also have a choice as to how they want to spend to get great content.So as the global SVOD wars play out, the AVOD side of the market is rising rapidly, just not as prominently in the headlines. According to a recent report by WARC, W, A, R, C ad spending on AVOD platforms is expected to reach 47 billion by 2023 which accounts for only 5% of the global ad spend. That growth comes as nearly one-third of U.S. based broadband households are now using ad based OTT services, up from 24% in 2018 according to our Parks Associates recent report.AVOD is a proven model that we believe is becoming more relevant to consumers as they seek access to broader arrays of programming, while limiting the money they're spending on subscriptions. We also see tremendous appetite for advertisers as eyeballs move away from traditional ad supported television networks to streaming platforms. In this quickly evolving and growing market, we have already established our scale and leadership.We are among the largest AVOD networks for television and long form content. Based on our recent survey by Imagine Crackle is number two in viewership behind only the Roku channel. And if you add our seventh ranked Popcornflix property we offer advertisers access to the largest audience in AVOD. In total, our AVOD networks have an estimated share of about 16%. And as we've previously said, we're focused on growing that share through acquisitions of other AVOD networks.Additionally, as a result of our successful marketing test on Going From Broke, we now see opportunities and a roadmap to grow organically as well. Moreover, we are positioned in the most attractive part of AVOD sector. In AVOD you have lots of names thrown around, most prominently YouTube and others like Pluto, which was acquired by Viacom for 340 million in cash.When we talk about AVOD, we're speaking specifically to viewing films and TV series on demand. Short-form providers like YouTube are a separate segment of the market. And a number of long form players are focused on streaming of existing linear networks, essentially porting the cable channel to a streaming platform to follow the eyeballs. While these and other networks compete for advertiser dollars, our strategic focus on the VOD market positions us uniquely to create shareholder value.To drive growth in audience, any AVOD network needs access to great content and for us, that's a competitive advantage. Between Chicken Soup for the Soul’s brand, and titles owned by our Screen Media subsidiary, we have access to over 49,000 hours of programming. That's a large library for company of our size, and we're focused on growing it through strategic content acquisitions by Screen Media.Our recent acquisition of the Foresight library illustrates our strategy to grow our content library in Screen Media for exhibition on our Crackle Plus networks. This library has 13 films including Peter Berg’s Oscar nominated Lone Survivor with Mark Wahlberg and Rom-Com and so it goes starring Diane Keaton and Michael Douglas. Foresight also has two upcoming film projects Best Sellers starting Michael Caine set to go into production next month. And Wally's Wonderland starring Nick Cage, set to start filming in January.The primary goal of our distribution and production business is to fully service and support the growth of AVOD networks. We're doing this by profitably growing the library, which drives revenue for Screen Media and faster audience growth in our network business. And using innovative outsourced studio partnerships, like the newly formed Landmark Studio Group, to de-risk and lower our production costs of newly produced content.The creation of the Landmark Studio Group is the first example of moving production capabilities out of house to be more cost effective and to reduce production risk. Landmark Studio was launched in partnership with David Ozer. It is a newly created independent production agency where to put it in the simplest terms David and his team offset production costs for scripted series and films through guarantees prior to beginning production.This supports our goal of delivering great content to Crackle Plus networks, and getting more hours to our content library. Landmark already has a dozen promising film and television projects in various stages of development. So we'll get to see the benefits of this model in 2020. We also secured outside funding for Landmark but again de-risks our production exposure.Our upcoming projects include the Fix produced by Grey's Anatomy, Ellen Pompeo, The History of Gangster Rap, produced by Ice-T and featuring Dr. Dre, Snoop Dogg and Ice Cube and Safehaven directed by Brad Turner, who directed Homeland and 24. David brings his experience in growing IDW to Landmark, so we're confident in his ability to add successful new programs to our business.We plan to create additional production entities similar to Landmark which will help us de-risk and scale our production business by launching that activity outside the company. Our latest series Going From Broke, which debuted in October on Crackle is a great example of what's possible when we premiere exclusive content on our growing network. The series was executive produced by Ashton Kutcher and puts a spotlight on the epidemic of student debt.Our series shines a light on the issue and provides financial skills on how to make practical changes to get out of debt. The series hit 1 million views in just five days, and as of yesterday, broke 5 million views in only four weeks. The series is generated at an estimated half $0.5 million in ad revenue on Crackle to date validating our beliefs that compelling on point content will find valuable audiences.And in line with our content development strategy, the series was already profitable because 100% of production costs were offset by sponsor and brand integrations prior to beginning production. We're going to use this same model to grow our future EBITDA. Going From Broke as a great early win and an example of our ability to be nimble in identifying what our audiences want, and how to get it made cost effectively.We're continuing to execute on each of these activities as we build our distribution and production business to support our AVOD networks. We have a number of opportunities in the pipeline so stay tuned. There will be traditional costs, transitional costs to executing on the strategy, and you'll see us doing some things differently than we have in the past. One example is we are moving away from significant in-house TV series production.As part of this strategy, we're bringing these formerly distinct businesses together to reflect our new business model than to best reflect our team and maximize our opportunities. We will report distribution and production as combined businesses beginning next quarter, giving us a two segments structure networks focused on AVOD and distribution and production.So with that as a backdrop, it's clear our strategy is beginning to bear fruit. The strong financial start for Crackle Plus, the momentum for Going From Broke, the launch of Landmark as well as the Foresight library acquisition are all evidence of rapid progress. To continue that focus - to continue our progress, we're focused on evaluating potential M&A opportunities in the AVOD space, growing our existing AVOD networks, building our production pipeline through deals like Landmark and growing our content library through deals like Foresight.In addition to our near term priorities, we are also taking a close look at how to best build our business for the future. The Going From Broke experience has been instructive, as we've seen strong marketing drive, not only for the viewership of the series, but also growth in the audience across the network as consumers who come for Going From Broke, look at more of our content. We think there is a meaningful opportunity to accelerate our growth and better position us for long-term planning by investing more in resources in our marketing capabilities and in talent to grow and direct - our direct and indirect sales operations.Making these investments in the near future will also support our growth in becoming the AVOD platform. We’ll be talking more about our initiatives here on future calls. In Q4, all the pieces of our transform company will be in place for the first time. The Foresight deal in particular will be an immediate contributor to performance with strong library sales and a pipeline of pre-sales for 2020.We stay strong q-on-q growth quarter-on-quarter growth in Q4, which is especially noteworthy and that it is the first quarter in which we will have not added additional months of operations of Crackle to the period. We also anticipate solid adjusted EBITDA performance, though I would caution that results will reflect the cost impact from our marketing investments. All in all however, we see a strong Q4 that sets us up for what we believe will be an exciting 2020 a rapid top line growth as we build our AVOD networks business and fuel that growth and expanding and distribution - expanding distribution and production business.To wrap up, we're making great strategic progress and seeing early validation of our revitalized business model. We think we are in the right place at the right time. As a truly exciting opportunity in AVOD takes place major entertainment players are positioning for the biggest platform change since the dawn of television as we move to streaming. Increasingly, AVOD will play a major role in this revolution we’re positioned to win because we bring unique assets including leading scale, proven content, and nimble production strategy, strong partners and an operating approach that emphasizes low risk and capital preservation. Thanks again.And now, I'll turn it over to Chris.

[Chris Mitchell:]

Thank you, Bill.Our financial results for the third quarter of 2019 reflect the transformation underway in our online networks and distribution and production businesses. Bill has already discussed the current trends that are most relevant to our business. So I will focus on a quick review of our results and balance sheet.We delivered on our expectations to significantly increase revenue in the third quarter. Total revenue for Q3, 2019 was 17 million compared to 6.6 million in the year ago period. Online networks which again includes the Crackle Plus joint venture, generated 14.4 million in revenue in Q3, 2019 compared to 1.8 million in the year ago period.Television and film distribution generated revenue of 2.6 million in Q3, 2019 compared to 2.5 million in the year ago period. Television and short form video production generated revenue of 100,000 in Q3, 2019, compared to 2.3 million in the year ago period. Profitability trends for the third quarter reflect the business developments discussed by Bill.For CSSE as a whole gross profit for the quarter ended September 30, 2019, was 3.2 million or 19% of total revenue, compared to 4 million or 61% of total revenue, in the year ago period. Operating loss for the quarter ended September 30, 2019 was 9.6 million compared to an operating income of 900,000 for the year ago period. Without the noncash charges described above operating loss would have been 2.7 million. Adjusted EBITDA for Q3 2019 was a $400,000 loss compared to 2.2 million last year.Turning to our balance sheet at September 30, 2019, the company had cash and cash equivalents of 6.2 million compared to 7.3 million at December 31, 2018. We had outstanding debt of 15.8 million at September 30, 2019 compared to outstanding debt of 7.6 million as of December 31, 2018. In the third quarter, we completed our Preferred B share issuance and closed our increased credit facility of $16 million with Patriot Bank.With Crackle now operating at cash flow positive combined with disciplined expense management. We are in a solid liquidity position and while we will be opportunistic as we grow our business, we have no near term need to raise additional capital. As of close of business yesterday, we had approximately 10 million in cash on hand. As Bill indicated, we are on a positive growth trajectory in Q4 and we expect that to continue in 2020 as we benefit from our first full year of performance of our transformed business.I'll now turn the call back over to Bill.

[William Rouhana:]

Thanks, Chris. I'd like to open the call for questions now operator.

[Operator:]

[Operator Instructions] Our first question comes from the line of Dan Kurnos with Benchmark. Your line is now open.

[Dan Kurnos:]

Bill let's just go down the line here start with Crackle, I guess I'm just trying to figure out what the real run rate is of this thing at this point. You guys had pro forma numbers of 65 million in 2018. You do 1430 including popcorn in the quarter I know there was some noise with Roku, as you called out, you also mentioned something about the acquisition of a library I don't know where that would have gone the 4 million of revenue and 3 million of EBITDA.So just starting with revenue just help us think about, what happens understanding there is some seasonality here, but what's kind of the underlying run rate for Crackle here, and what we're sort of all of the ad backs in the quarter?

[William Rouhana:]

So the quarter for Crackle would have been 1 million roughly higher than it was which was 14.4 I think. So would have been about 15.4 for the quarter Dan so roughly 5 million a month for the lowest seasonal quarter. We think you can expect fairly significant rise in Q4 and for the year, it's probably going to come in. It's looking like it's 6 million-ish a month on average when you get done. So not far from what the number you cited.The library acquisition was something we had planned to do in Q3, but completed it in Q4. And so that'll add $3 million to $4 million of revenue and a significant amount of EBITDA to Q4 that was expected in Q3. And then the other thing that impacted Q3 was that we didn't complete. We completed the Landmark deal in Q4. We have another one of these production agreements underway right now.And as a result, we've been carrying about $1 million of expenses, which we expect it recoup from that transaction in Q3, but that will happen in Q4. And then there is a tiny little bit of additional marketing expense that we added in Q4 - in Q3 because we started to see some positive results from the Going From Broke marketing dollars that we were spending. So all at all, those are all the differences.

[Dan Kurnos:]

So with that kind of backdrop two high level questions on sort of the streaming market and then your outlook. Just one obviously, CBS Viacom, CBS already starting to put some stuff on Pluto and it sounds like some other guys with - like Sinclair some other guys although I think Sinclair is more of an SVOD play longer term. They're getting a lot of their content now onto AVOD platform. So I'm just curious, how you view the necessity of adding more content to your platform.And then from a cost perspective, you kind of framed up some long-term margin expectations around Crackle. It seems like things were a lot more expensive this quarter, but it's hard to tell with all of the moving pieces. So I don't know, these are way that we should be thinking about long-term, how is your thinking of long-term margins for Crackle change from the last time we talked?

[William Rouhana:]

I don't think they've really changed much with the one exception being that if we continue to see the kind of return we're getting on the marketing dollars we are currently spending on Going From Broke. I would probably start to spend more marketing money, Dan, because we grew. If I remember the number correctly, I think 13% month-over-month between September and October, it's being driven almost entirely by the combination of new people coming to see Growing From Broke, which we've been promoting and then staying and watching other things.If we see that continuing, I finally have an organic growth strategy that is worth pursuing and focusing on. And so we might do that, assuming that we see that continuing so far it is continuing. In fact, in the last couple of days, the Going From Broke viewership has been increasing again. So I think that's I'm not sure what that is yet, but it's certainly a sign of a way to go about building the network that makes a lot of sense. But it will cost a little bit more money than I expected in the marketing side, but it will also grow much faster.So that's the one caveat, I would say in terms of overall margin expectations. The other thing that of course, affects the margin a bit is the mix between ad rep partners and O&O and that kind of bounces around month-to-month but - and it was less good in the third quarter then it will be in the fourth. So does that help you?

[Dan Kurnos:]

Yes, no that helps. And like just your thoughts on sort of, some of the combinations, CBS putting stuff on Pluto?

[William Rouhana:]

Yeah it’s really, really interesting I mean, we still have a very, very substantial backlog of pretty well known people who are trying to get us to put them on our network on a rev share basis. And I think that will continue for the foreseeable future. The big SVOD wars for me are really beneficial to us in a couple of ways. One, we are taking advantage of the very dramatic increase in the amount they're spending on production through these production entities we're creating.We will be sellers to those folks, they will become customers. And the fact that they're raising their investment in programming from 35 billion a year to almost 100 is something we plan to take advantage of and we have been taking advantage of. And so, that's really good from my point of view. The other thing that I think is happening from the SVOD wars is the completion of cord cutting is I believe cord cutting now is going to accelerate dramatically with the introduction of Disney+ with HBO Max coming.Now these are going to be real services that people are going to start leaving their cable networks for finally once and for all another group of them. There is always a place for those people for the free online video consumption that we provide in AVOD. So I see these - this is a two-fold benefit to us accelerating the cord cutting and also allowing us to make programming with these folks in a cost advantages way.Both of those things I think are going to be helpful to us at least for the near term. What happens in that war in the long-term I leave to smarter people than me to figure out exactly what it will be.

[Dan Kurnos:]

And just - last one just on the TV and short form kind of consolidation of the segments in near term. Does that mean that that business segment just goes like goes away, you're not going to produce anything near term. Is there any revenue there, because you had some shows in library and you were thinking about how to use them? So just help us understand what happens with that segment, before you consolidate it?

[William Rouhana:]

So we're going to take - the existing shows that we have plus the development that we have and put them in the next production vehicle we announced. Dan so, you'll see where all of that goes. This is really - so that production will come back to us and it will be beneficial to us. It's really a better way for us to operate through a series of off - I can only decide how to call it co-production kind of partnerships.Where we focus our management energy and effort on the distribution business and on the network growth and we have a series of people working on the production business for us. We want to have scale and we want to have predictability in that business. And the best way I conceive to achieve that is to have multiple players all working on it, in conjunction with us. So if one gets two done and another one gets one done, and another gets three done.We end up with the combined effect of that scale. But we don't have to rely on doing it all ourselves, which is - historically and put too much strain on our management's ability to focus on the things that really matter. I feel this is the right balance in terms of the way to continue to get our production business going, but also to get the most important parts of our business properly working. So that's why we're doing it.

[Operator:]

Our next question comes from the line of Allen Klee with National Securities.

[Allen Klee:]

I'm trying to understand a little better than the cash flow characteristics of your business. You said you don't have near term need to raise capital. And I know you have a lot of growth capital for opportunities. But is there a way to that you could maybe explain to us want us kind of a more of a steady state, how you think about what the cash - overall cash flow generation is?

[William Rouhana:]

Yes, the current - if you recall the way we've been looking at this in the past, we would have our EBITDA and then we would look at how much of that EBITDA was being reinvested in production and film library. With the advent of the network, we don't have that reinvestment need anymore. There is nothing - there is not really the kind of material production capital that's required that there was before by pushing the production's off of our balance sheet so to speak, and having them independently financed through the production vehicles, we eliminated the need for that investment.So the investment that's left Allen now is just investment in library. And we tend to be able to structure that in a way that doesn't absorb cash but rather creates cash for us. So in three different ways, we've changed the cash flow dynamic of the business, which is why we are now accumulating cash. And I expect that to continue for the foreseeable future. And it's really a matter of where we need to reinvest now as compared to before, and the way we're able to acquire film library as way we - as compared to what we were doing before.So there's three parts to it. I hope that's clear. I'm not sure I was very clear about it, but those are the three elements that changed the way the cash flows.

[Allen Klee:]

Okay and thank you and then with Landmark you mentioned another potential upcoming type of company like that. Do you - what I'm trying to figure out as you guys gave a baseline pro forma historical amount of combined revenue in 2018 roughly or ending March of 2019. And I'm trying to understand is that a fair baseline amount that you can grow off of, in terms of like using Landmark and how much you'll be able to produce of content compared to where you were back in 2018 and the economics on that?

[William Rouhana:]

Yes, it is a fair - place to start from, partially an answer to Dan’s question of a minute ago about the combination. Part of the production revenue now will start to come through as distribution revenue because the way it will be characterized as we will be the distributor for each of these off are these co-production partnerships, let's call them. And so instead of it coming as production revenue, I say it will come to us as distribution revenue which we will get from third-parties and then pass through to the production vehicles.So when you look at Q4, what you'll see is a dramatic uptick in the revenue and EBITDA in the distribution and production business. Partly the result of the delay from Q3 to Q4 of the Foresight transaction, partly from the fact that some of the existing productions are finally going to come in and they will be distributed through Screen Media so, that's why I collapsed the two lines. Because there everything is going to look like distribution revenue going forward, even though it's being driven by the co-production partnerships in part, it is a fair baseline is the answer to your question.

[Operator:]

Our next question comes from the line of Lisa Thompson with Zacks Investment.

[Lisa Thompson:]

So could - I could go through a little bit I mean I'm looking at the gross margins and without the film library, it's down to 28% from 66%. Is that kind of where it's going to be now based on the new model where does that go?

[Chris Mitchell:]

This quarter is affected by the fact that there is no balance between the production and distribution line on the one hand, and the online networks line on the other hand. And also by the mix in the online networks, both those things drove lower gross margin. The production and distribution business remain a very high margin business for us. And as the percentage of revenue that comes from that business increases, the margin will move back towards what you've seen in the past.The other thing that's important is we want to grow and will continue to focus on growing our owned and operated online networks more than we will focus on our ad rep business. And this is where the potential acquisitions that we're looking at in the online network business our focused, they're focused on owned and operated companies which will give us a much higher margin than the blend we have with ad rep business.

[Lisa Thompson:]

And then going forward your advertising is that down and SG&A where does it go up and cost of revenues to get more eyeballs?

[Chris Mitchell:]

That’s SG&A.

[Lisa Thompson:]

Okay, all right, and I read in the article today that you talked about launching like a major movie every month on Crackle. Is that the plan and if so you know what's the next ones coming up?

[William Rouhana:]

We do plan to have original content pretty much every month. The next movie coming up is called Cold Blood which comes up in December it's obviously a good Christmas movie.

[Lisa Thompson:]

Yes I can see that.

[William Rouhana:]

Yes, The Man Who Killed Don Quixote which is up now is doing pretty well actually. I've been watching the results of that. We will also - but we also have additional originals in our Hidden Heroes Series by the way this goes back to Allen's question about the production generating revenue Hidden Heroes will go live - has gone live I think November 1, went live on Crackle. We’ll also have a series. We’ll have Animal Tails series going up.We have other movies coming that are pretty much it's really several pieces of original and or exclusive content every month already in place through it looks like May of next year, Adult Life Skills in January. So as we're buying up and creating and distributing film and TV products, we're always looking for ways we can advantageously retain rights for AVOD. So that Crackle alone will be able to promote and show these films and TV series.There is something great about that I think, because what's happened is looking at the going from broke example we not only have we're going to get a great return on that, but we're also driving network growth. So this feels to me like it's going to continue to work. And this original and exclusive programming without having to pay a heavy price for it is an unusual approach, which I believe is the right one.

[Lisa Thompson:]

For Going From Broke are you going to then like sell that to Netflix or something at some point or?

[William Rouhana:]

It's very possible that that will have a second airing on another network, but that's…

[Lisa Thompson:]

Or on TV then, can you put that on TV?

[William Rouhana:]

That’s matter of price, and then it’s also question of a second season which we are wrestling with now. And which we would of course be inclined to do if these results continue. I mean just to get this in perspective, when Sony developed the Oath. There was 10s of millions of dollars spent on that program and on marketing it, and this - are Going From Broke series is tracking pretty much in the same way as the Oath did in terms of viewers. So, yeah, Chris is our CFO who said it was $40 million seats. I appreciate the specificity.

[Lisa Thompson:]

Oh my God.

[William Rouhana:]

So we have a very different view of the right way to do this. But we're obviously delivering something of great value to the customers because they're coming back almost 60% of the streams are being completed when you people start almost 60% of them are completing that's a really high number. And the series has really been, the number of daily views has actually been growing again on the series, and we've reduced the amount of marketing.So there is got to be something going on here. Not the least of which is, you know, it's a good show, but it's also a good idea to have original content that you can get for you know for less, let's call it.

[Lisa Thompson:]

I'm going to be very sad if there is no more episodes.

[William Rouhana:]

It’s your show I really like it.

[Lisa Thompson:]

Yes I like it, I call it - to me it's like for finance people it's like watching hoarders.

[William Rouhana:]

Oh yeah.

[Lisa Thompson:]

I don’t know it's like, how do these people get like this? I don’t understand.

[William Rouhana:]

You’re doing a good thing here, Lisa, you're probably got us another 50 viewers by that comment of all the people who are listening to the call.

[Lisa Thompson:]

Yeah, exactly definitely its financial people would love it all right, that's good. I'm looking forward then to see next quarter have everything all sorted out and plan to get back to normal.

[William Rouhana:]

It should be there and then some.

[Operator:]

[Operator Instructions] Our next question comes from the line of Mike Grondahl with Northland Securities.

[Unidentified Analyst:]

This is [indiscernible] for Mike and you kind of answered my question with the last one. But I was wondering if - like given the good progress so far with this Crackle Plus joint venture if you can go like a little more in depth regarding your growth outlook and progress expectations for 2020?

[Chris Mitchell:]

Well, we do expect to grow that is very much the case. And we've been staying away from what you would call guidance as you guys know, because we really think this business is - it's early in its growth phase. So I don't really want to get into that into that question in detail, other than to say, I think Q4 will be indicative of what we should expect going forward. And let's - we’ll revisit the question in early 2020 with you.

[William Rouhana:]

You're welcome. And with that, we're going to wrap up operator. Thank you all for joining us today.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.