CuriosityStream (CURI) Deep Dive

CuriosityStream (CURI) Deep Dive

I have been following Saul’s board since the beginning, and keep up with almost every post on a daily basis. I seldom post as I feel I usually don’t have much value to add to the high level discussions on the board. This is my first attempt at a deep dive. I hope it is beneficial to you all. I recently initiated a position.

CuriosityStream is an online video streaming service specializing in factual documentaries and entertainment. It’s content includes 3,000 titles and growing, spanning science, nature, history, technology, society and lifestyle. The company has several revenue streams. It sells subscription services directly to consumers for $2.99 per month, or $19.99 per year for HD content or $9.99 per month or $69.99 per year for 4K content. The service is available on most smart TV’s, ROKU, and other streaming devices. CuriosityStream also bundles their original content and sells to other distribution partners. It also receives revenue from corporate sponsorships of its programming.

The company was founded in 2015 by John Hendricks. John was the founder and former Chairman of Discovery Communications, the parent company of Discovery Channel, Animal Planet, TLC and others. He launched Discovery Channel in 1985 and grew it into the conglomerate it is today with operations in 220 countries, with more than 2.5 billion cumulative subscribers. He retired from Discovery in 2014 to focus on this venture.

CuriosityStream currently reaches 13 million subscribers in 175 countries. Management has talked of a mid term goal of reaching 100 million subscribers. It became public in October 2020 through a SPAC. I like it for the following reasons.

1 - It offers a unique product in an industry with significant tailwinds.

2 - It has a proven and experienced management team that has done this before. John Hendricks owns 50.6% of the company and has completed recent share purchases in January and February

3 - It is a small company at the very beginning of what could be a very significant market. It is at the very beginning of a very long runway.

    • It’s revenue growth rate was 93.6% year over year in 2019. Q3 2020 revenue of $8.7 million was up 83% YOY. They have not yet released earnings for Q4 2020. Projected revenue growth rates of 119% YOY for 2020 and 80% YOY reported in their Q3 2020 earnings report.

5 - Gross margin increased to 61% year over year in Q3 2020 from 59% in Q3 2019. I expect this will continue to increase as they scale. The cost of this type of content is much lower than other streaming services which contributes to the high gross margin. The content is typically easy to change to other languages since much of the content is narrated. The factual content of their programming has a much longer lifespan than many entertainment and reality TV programs. Here are their Q3 2020 results.

“We had a strong third quarter, with an 83% year-over-year increase in revenue and growth across all lines of business. Our subscribers more than doubled year over year, with notable increases in annual plans and international subscriptions, as we continued to offer fresh and unique original content every week,” said Clint Stinchcomb, President & CEO. “We continue to be on a three-year trajectory of doubling annual revenue with large recurring revenues and high gross margins as we drive growth across the entire business.”

Third Quarter 2020 Financial Results

Revenue of $8.7 million, up from $4.8 million in the third quarter of 2019;
Total paying subscribers of approximately 13 million, up 108% year-over-year;
Gross margin increased 200 basis points year-over-year to 61%;
Operating loss was $(6.8) million compared to operating loss of $(10.1) million in the third quarter of 2019;
EBITDA was $(6.7) million compared to EBITDA of $(10.0) million in the third quarter of 2019;
GAAP net loss was $(6.7) million and GAAP basic and diluted net loss per share was $(0.56);
Sources of cash totaled $23.3 million as of September 30, 2020.

Business Highlights

Closed business combination with Software Acquisition Group, Inc. (NASDAQ: SAQN) and began trading on the NASDAQ exchange under ticker symbol “CURI” on October 15, 2020, becoming the first streaming media company devoted to factual entertainment to go public;
Named international media executive Bakori Davis to the newly created position of Managing Director and Head of International Distribution;
Named industry veteran Nate Stamos VP of Brand Partnerships;
Appointed entertainment and cable industry pioneer Matthew Blank, former Chairman and CEO of Showtime Networks, Inc., to CuriosityStream’s Board of Directors;
Announced several brand-defining original series including MY WILD BACKYARD,the third season of 4th AND FOREVER, DOUG TO THE RESCUE and NATURE THROUGH HER EYES;
In a separate release today, CuriosityStream announced the November 19th, 2020 world premiere of the original new series BEYOND THE SPOTLIGHT from Executive Producer Leonardo DiCaprio and Appian Way Productions and Stephen David Entertainment. First episodes feature Shaquille O’Neal, Kristen Bell and Samuel L. Jackson and LaTanya Richardson Jackson.

Financial Outlook

For the fourth quarter of 2020, CuriosityStream currently expects the following:
Revenue of at least $11.3 million, or 69% year-over-year growth
For the full year 2020 & 2021, CuriosityStream currently expects the following:
2020 revenue of at least $39.5 million, or 119% year-over-year growth
2021 revenue of at least $71 million, or 80% year-over-year growth

2/16/21 Cablefax article quoted CEO John Hendricks

“Our annual revenue has more than quadrupled. Our paying subscribes have grown more than 10x. Our content library has grown by more than 1,000 titles. Seventy five percent of those who subscribe to CuriosityStream select our annual plan, we’ve built an elite, veteran-led management team, and unlike most streaming services, we’ve developed multiple avenues of content monetization,” Stinchcomb said during a TCA presentation Tuesday.

Entire article here.…

I recently subscribed to their service and can report that onboarding was quick and easy, and the quality of the stream was excellent. Looking through their content library I found numerous titles that I was interested in watching. This contrasts with my experience on Netflix or Prime where I typically spend a lot of time trying to find something worth watching. I have heard CuriosityStream referred to as the Netflix for nerds. HA! I am still amazed at the low price of the service and would think they have room to move that up in the future. Looking forward to their Q4 results.

I hope you find value in this.



Thanks for your write up. I have also taken a small position (~ 2% of my portfolio) in Curi last week, after seeing the huge revenue growth forecast. Apart from that below are the few key highlights (source : fintweet community) :

  • The company’s content focuses on factual entertainment, including science, history, society, nature, lifestyle, and technology.

  • The company has a five pronged revenue strategy with each piece consisting of recurring revenue, some which is long-term fee based.

  • In Q3 2020, the company saw paying subscribers of approximately 13 million, up 108% year-over-year.

  • 2020 revenue is on track for 119% year-over-year growth.

  • 2021 revenue was guided to 80% year-over-year growth.

  • 2025 revenue guidance is $390 million which is 10-fold of 2020 revenue ($39 million).

  • 2025 guidance points to 58% compounded annual growth (CAGR) through 2025.

  • Operating margin has risen from -357% in 2018 to -82% in the first nine-months of 2020.

  • Significant operating leverage has been demonstrated between 2019 and 2020.

revenue streams

a) Direct Subs
– monthly & annual fees
– accessible in 170 nations for anyone w/broadband
– est. 25-35% of revs

b) Multichannel Video Programming Distribution (MVPD)
– collects fixed fee
– offered in pay TV packages
– est. 25-35% of revs

c) Program sales
– compensated upon content delivery
– pre-sells big originals to global media companies
– est. 10-20% of revs

d) Ads
– commercials on linear networks
– sponsorships
– multi-platform digital partnerships
– est. 10-20% of revs

e) Corporate Partnerships
– multi-year agreements w/institutions for bulk subs
– $CURI provides & operates a co-branded streaming service
– 40 corporate clients to date
– est. 10-20% of revs