The Partner Platform
The screens in the company's Partner Platform business may deliver content that Loop Media curates and delivers or content that is provided by the owners and operators of third-party digital platforms.
The company makes available to their Partner Platform customers channels of original content developed using licensed or purchased content that is then reformatted into short-form content suitable for commercial use.
Loop Media provides advertising demand services to third parties by selling ad impressions available on the Partner Platform to advertising demand sources (including DSPs, SSPs and advertisers) who pay the company to fill those impressions and have ads delivered across the Partner Platform. If the advertising impressions are filled with advertisements, Loop Media will fulfill their obligation and be paid as the publisher of the advertisement. If advertising impressions are not purchased, the content will play without advertisements and no revenue will be earned by Loop Media.
From a business operations standpoint, the company views their customers, for their Partner Platform services, as the owners and operators of the third-party digital platforms that utilize Loop Media's content and advertising services and enables such third parties to better monetize the screens on their digital platforms. The company may, in certain instances, also provide content across the Partner Platform.
Loop Media's customer services team works with the owners and operators of the third-party digital platforms in their Partner Platform business to ensure their customers are being properly serviced and addressing any questions about the service, content, advertising performance and other matters.
From an accounting standpoint, for the Partner Platform business, Loop Media's customers are the advertising demand sources (including DSPs, SSPs and advertisers) because they are providing revenue to the company (by way of purchasing advertising inventory) for the streaming of content across the Partner Platform. The Partner Platform business operates a fr-ee-ad supported business model and has no subscription fees.
The revenue share arrangements in the O&O Platform business are included in the cost of revenue. The content streamed on the Partner Platform will be content the company procures on licenses that do not contain an element of revenue share or content provided by the third-party partner who owns and operates the screens on the Partner Platform.
As such, there are no content partner revenue share arrangements on the Partner Platform. There is, however, a revenue share arrangement with the third-party partner who owns and operates the screens on the Partner Platform. Loop Media deducts from the revenue they generate in the Partner Platform business certain costs and expenses associated with operating such business (including streaming costs and content hosting) and then allocate the remaining revenue between the company and the third-party digital platform provider, based on pre-agreed negotiated percentages. The percentage of revenue Loop Media passes along to third-party digital platform providers is recorded as cost of revenue and is their single largest cost of revenue component for the Partner Platform business.
Source and key details here. Company Presentation.
As mentioned above, LPTV has several potential breakout catalysts to focus on immediately. Take a look:
No. 1 LPTV Potential Catalyst - Analyst Target Provides Glimpse Of Major Upside Potential (175+%)
This summer, Eric Wold of B. Riley Securities, initiated coverage of Loop Media, Inc. (LPTV) with a 12-month price target of $5.00 per share.
From Wednesday’s closing valuation, that target suggested a potential upside of over 175%.
Check out a few report highlights here:
Attractive outlook for digital out-of-home advertising. While the out-of-home (OOH) category is projected to generate the second-strongest advertising revenue growth rate between 2021 and 2025, digital spending growth is expected to outpace physical spending over that period. With the notable growth in advertising video-on-demand (AVOD) in recent years, we believe consumers are increasingly accepting the trade-off of advertising for desired content—especially in non-traditional settings outside the home.
Untapped domestic total addressable market. We estimate the total addressable market for DOOH advertising networks to be at least 3.2Mn locations domestically—including retail stores, gas stations, restaurants and bars, salons, gyms, and convenience stores. With Loop Media and other competitors penetrating only ~100k of those locations to date, we believe the market remains untapped, with room for multiple players to succeed—especially as management increasingly targets the top 20 demographic markets.
Dual growth strategy to drive penetration. Our projections are primarily based on Loop Media providing Loop Players to businesses to integrate with existing audio/video systems and access the growing 200+ channel content library. In addition, with the recent launch of the Partner Program, the company can capitalize on installed networks of consumer-facing screens to accelerate penetration (e.g., retail point of sale, gas station pumps).
Projected pivot to positive AEBITDA in 4Q24. With the combination of growth in the company’s screen base, a conservative recovery in advertising spending, and improving margins on a content mix shift, we are projecting Loop Media to pivot to positive AEBITDA in 4Q24. We would view additional visibility on that pivot as potentially driving a positive mindset change with investors in an environment of capital-raising concerns.
Attractive valuation given relative growth rates, in our opinion. We are arguing for a premium EV/S multiple relative to the peer group, as we believe that Loop Media’s projected CY24 revenue growth rate is more than 8x the peer group average and that the projected pivot to positive AEBITDA warrants such a premium. In addition, a private peer company completed a financing round at a LTM revenue multiple of 18x earlier this year, and we expect Loop Media to benefit as in-vest-or awareness of the opp. increases.
No. 2 LPTV Potential Catalyst - Company Announces Strategic Alignment With Tech Giant, Microsoft
Loop Media Announces Strategic Alignment With Microsoft Advertising
Creates new advertising inventory category for SSP Partnership: CTV Out of Home
GLENDALE, Calif., August 08, 2023--(BUSINESS WIRE)--Loop Media, Inc. ("Loop Media") (NYSE American: LPTV), the free streaming television media company for business which provides over 2 billion video views every month via restaurants, retail businesses, office buildings, doctors’ offices, airports, bars and college campuses, announced today Microsoft Advertising has created a new inventory category for SSP partnerships, called CTV Out of Home (OOH).
This first of its kind SSP category will provide an additional distribution category to advertisers and DSPs from which they can access and purchase Loop Media advertising impressions. On other DSP and SSP platforms, Loop Media is categorized as DOOH (Digital Out of Home), CTV (Connected TV), Streaming, or other. This new category expands Loop Media’s potential reach in the marketplace for all potential DOOH advertising buyers, including those advertisers looking to distribute ads on CTV Out of Home service platforms.
"With this new category, Loop Media may be seen and purchased by an expanded group of advertisers in the marketplace," said Bob Gruters, Chief Revenue Officer for Loop Media. "My team and I have been working diligently to get Loop Media positioned well across all revenue advertising categories including Microsoft Advertising’s CTV Out of Home category."
"We are pleased to launch our new CTV-OOH library on the Microsoft Advertising platform which provides a path for clients to buy CTV-OOH supply in the proper context with clear labeling in our new venue category packages," said Erik Zamkoff, Microsoft Advertising, associate director of Marketplace Development. "We are thrilled to feature Loop CTV-OOH supply in our new venue category packages."
This new category premiered on Microsoft Advertising in June 2023. Buyers can access the venue category packages in Microsoft’s Deal Catalogs available via Microsoft Advertising's DSP, Microsoft In-vest and 25+ participating DSPs.
Read the full article here.
No. 3 LPTV Potential Catalyst - Oversold Leaning Technicals Could Suggest A Healthy Reversal On The Horizon
As of 4:00PM EST Wednesday, Barchart was reporting this profile to have several oversold leaning technicals.
These technicals could be signaling a healthy reversal could be approaching in the near term.
Here's the definition of a "reversal" from Investopedia:
"A reversal is a change in the price direction of an asset. A reversal can occur to the upside or downside. Following an uptrend, a reversal would be to the downside. Following a downtrend, a reversal would be to the upside. Reversals are based on overall price direction and are not typically based on one or two periods/bars on a chart."
Now, here are some key technicals (as of 4:00PM EST Wednesday) that could signal LPTV to be leaning oversold and on the verge of a potential reversal:
- 9-Day Relative Strength Index: 12.83%
- 14-Day Relative Strength Index: 20.76%
When these numbers drop down to the 30% range and lower, they can be viewed as being in oversold territory. While in this territory, they can paint the picture of a profile that is undervalued.
- 14-Day Raw Stochastic: 3.66%
- 14-Day Williams %R: 96.34%
As the Raw Stochastic nears the 10% range and lower and the Williams %R nears the 90% range or higher, these technical indicators may also be viewed as oversold and undervalued.
Keep an eye on these technicals closely.
No. 4 LPTV Potential Catalyst - Two Key Partnerships Reached Could Signal Huge Things Ahead
In the last couple months, LPTV has reached partnerships with 2 important players. Check it out:
6/22/23 - Loop Media Announces Expansion into Australia and New Zealand via Strategic Partnership with Orange Door
"Expanding Loop TV into the Australia-New Zealand markets has been on our radar for some time," said Jon Niermann, CEO of Loop Media. "We’ve had a terrific relationship with Orange Door for years, and this new partnership is the beginning of the opp. to expand our footprint further into the international market."
6/8/23 - Loop Media Announces Strategic Partnership with Pypestream
"Helping our venue partners achieve a better customer experience is at the heart of Loop Media’s mission," said Liam McCallum, Chief Product & Technical Officer of Loop Media. "We believe partnering with Pypestream to deliver a better customer experience for our rapidly growing screen footprint using their proprietary technology, gives Loop Media the AI edge on our competition."
No. 5 LPTV Potential Catalyst - A Low Float Paves The Way For Significant Volatility Potential
According to the Yahoo Finance website, LPTV has a relatively low float.
The website reports this profile to have approximately 26.94Mn shares in its float.
Why is that important? It's important on one crucial level. Volatility.
Could more positive company news in 2023 provide a near term spark?
LPTV Recap - The Top Potential Breakout Catalysts To Know Now
No. 1 - Analyst Target Provides Glimpse Of Major Upside Potential (175+%)
No. 2 - Company Announces Strategic Alignment With Tech Giant, Microsoft
No. 3 - Oversold Leaning Technicals Could Suggest A Healthy Reversal On The Horizon
No. 4 - Two Key Partnerships Reached Could Signal Huge Things Ahead
No. 5 - A Low Float Paves The Way For Significant Volatility Potential
Coverage is officially initiated on LPTV. When time permits, do this: