BURBANK, CALIF. — It’s been a difficult 2024 for Loop Media, the connected TV, streaming, digital out-of-home television and digital signage platform focused on businesses. Interim CEO Justis Kao believes there’s a turnaround ahead, despite a 94% dip in stock value since the start of the year, a downbeat fiscal Q3, and a delisting from the NYSE.
For some, Loop is known for its six music video channels on The Roku Channel in the U.S. and Canada. However, its principal business model has been pitching “hundreds of hand curated entertainment channels that elevate” the customer experience.
This includes music for businesses, and content from Red Bull TV and Cheddar.
Revenue hasn’t come easily for Loop Media, however. On August 7, the company reported that its fiscal third quarter revenue fell by 23% to $4.4 million, from $5.7 million.
Why? “A challenging ad market environment” in Q2 was cited as the key culprit for the Q3 decline, with Loop Media explaining that “due to one of the largest ad demand participants changing their terms of business with ad publishers, including us,” this resulted in a material negative impact on the company’s ad demand partner revenue.
Could Loop Media be referring to Meta‘s Authorized Sales Partner (ASP) wind-down? If so, the impact could be enormous — just as it was for Entravision Communications. As RBR+TVBR previously reported, that company for FY 2023 estimated that Meta’s ASP program represented approximately 41.25% (or $23.8 million) of its $57.7 million total consolidated EBITDA and $586.4 million of Entravision’s $1.107 billion of total consolidated revenue — 53% in total.
For Loop Media, gross profit in fiscal Q3 of 2024 fell to $900,000 from $1.8 million.
If there was any good news, it is that the company’s net loss shrunk to $5.5 million, from $7.9 million. But, it hardly gets better for Kao and his leadership team. Cost-cutting initiatives began during fiscal Q3, and they include ways to restructuring third-party licensing agreements, eliminating some fixed fee content licenses, developing and promoting lower cost channels to reduce or eliminate third-party content license fees, and reviewing existing third-party vendor products and services “with a view to eliminating approximately $750,000 in ongoing yearly costs and expenses” starting in fiscal Q1 2025.
Kao commented, “Since my recent appointment as CEO, I have focused my attention on those areas of the business where we can look to increase revenues, leverage the company’s fixed and variable expenses and improve profitability. As we have already undertaken significant cost-cutting measures, we will continue to streamline our operations and create further cost efficiencies for the remainder of this fiscal year and into the next.”
Kao added that Loop Media is continuing to work toward the expansion of its subscription offerings to out-of-home business clients, including the introduction of a two-tier music video service offering. This, he explained, will include a “primary tier” consisting of fewer than ten music video channels provided under a free ad-based service, and a “premium tier” of Loop’s full library of curated music video channels provided under a subscription service.
Kao also said that Loop Media has recently announced a non-music subscription offering that includes a number of live channels ranging from live sports events (including The NFL Redzone and The NFL Network) to news and lifestyle offerings which he believes “will continue to support the growth opportunities of our business while further enhancing the customer experience for our business venue partners.”
For investors who hold shares in “LPTV,” the last three years have been punishing. In January 2021, shares were in the high $10 range, and were in the high $8 range some two years ago in August 2022. Then, a dip transpired, followed by a brief rally in early 2023. By May of last year, “LPTV” began a free-fall that didn’t stop. By August 9 of this year, “LPTV” had sunk to just $0.037 per share.
That stock decline led the company to shift from the NYSE to the OTC Pink sheets, given the company’s inability to maintain minimum listing requirements on the more prominent financial market. That news came on Thursday (8/29), with Kao taking a positive take on how it allows Loop Media to settle in for continued focus on growth in the coming quarters.
“Our roadmap is straightforward,” said Kao, who took over as chief executive in March after Jon Niermann stepped down, ending a 10-year run at Loop Media. “We’ve worked hard over the past year to significantly reduce our costs and strengthen our bottom line. These efforts are leading to more efficient, streamlined operations as we hone our distribution strategy to expand our footprint of high quality Loop TV players in businesses of all sizes nationwide. Our goal is for our revenue to keep pace with our development strategy in a growing CTV OOH ad market. We are committed to our expansion goals and will aggressively seek further opportunities to see our strategy through.”
Loop Media Executive Chairman Bruce Cassidy gave his sign of approval to Kao’s plan for a turnaround. “I have always believed in Loop Media and the team,” Cassidy said. “That belief has not wavered. Regardless of whether we are listed on the NYSE or OTC, we are very much focused on adding to the value of our company for our shareholders, many of whom have been with us since the beginning. I am confident that we have a plan in place that can yield positive results to get the Company to where we know it can be, and even beyond.”
Now trading on the OTC, “LPTV” was valued at $0.06384 as of 10:39am Eastern on Friday.
