This week, we examine the Q3 financial results of OTT industry heavyweights Disney, Warner Bros. Discovery, DISH, and Vizio, along with streaming providers Akamai, Brightcove, Kaltura, Comscore and Vimeo. We go over some of the most important conclusions, such as Disney+ having 5 million AVOD customers and ESPN+ making $33 million in profit. We go into detail on how WBD paid off an astounding $12 billion in debt this year and anticipates producing at least $5 billion in free cash flow. The company is attempting to position itself as an acquirer, as evidenced by the $111 million in positive EBITDA that their DTC sector generated during the quarter. We conclude with all the P&L data from streaming providers in the industry that you should know, including an examination of CDN77's remarkable revenue growth and the current macroeconomic environment's potential impact on the industry.
Podcast produced by Security Halt Media
This week, we examine the Q3 financial results of OTT industry heavyweights Disney, Warner Bros. Discovery, DISH, and Vizio, along with streaming providers Akamai, Brightcove, Kaltura, Comscore and Vimeo. We go over some of the most important conclusions, such as Disney+ having 5 million AVOD customers and ESPN+ making $33 million in profit. We go into detail on how WBD paid off an astounding $12 billion in debt this year and anticipates producing at least $5 billion in free cash flow. The company is attempting to position itself as an acquirer, as evidenced by the $111 million in positive EBITDA that their DTC sector generated during the quarter. We conclude with all the P&L data from streaming providers in the industry that you should know, including an examination of CDN77's remarkable revenue growth and the current macroeconomic environment's potential impact on the industry.
Podcast produced by Security Halt Media
Welcome to this week's edition of the Dan Rayburn podcast, the show that curates the streaming media industry news that matters most, unvarnished, unscripted and providing you with the factual data you need to know, without any of the hype, the pulse of the streaming media industry.
Speaker 1:Welcome to the Dan Rayburn podcast. I am Dan Rayburn, along with co-host Mark Donaghan, who is going to help me run through the numbers this week from our earnings. Apologies, I'm a little under the weather today, so hopefully my voice will hold up.
Speaker 3:If not Mark, I will sing and perform dance and we can see you. I don't sing, but I can talk.
Speaker 1:You might have to. Today. We've got Disney, we've got Warner Bros, discovery, sling TV, the Dish, obviously, vizio, akamai, breiko, kaltura, comscore, vimeo. Many of these we can run through quickly, but some of these do require some discussion and some points listeners should know about. So, mark, let's start with Disney. Disney added 7 million Disney Plus subs, so they're just over 150 million now total globally. Hulu S5 had lost 100,000, so Hulu's at 43.9 million total. Hulu Plus Live TV gained 300,000 subs, so that was good to see.
Speaker 1:They have 4.6 million total. Espn Plus gained 800,000 subs. They've got 26 million. Direct to Consumer Revenue was just over 5 billion but it lost $420 million in the quarter, which Wall Street was happy about because it's a lower number than previous. Previously they've had but man 420 million. Two key points here for listeners that you need to know. With Disney they did say that they expect their DTC business to reach profitability in Q4 of fiscal year 24. That's fiscal year, not calendar year. So that's exactly four quarters from now, so Q3 of calendar year. So we'll keep an eye on that. Also very interesting, mark ESPN Plus was profitable in the quarter, generating 33 million in positive EBITDA.
Speaker 3:Did I notice that?
Speaker 1:That's not happened before with ESPN Plus. So interesting. Disney also announced they had over 5 million AVOD subscribers, so that's a new number for them. Their CEO had a long conversation on CNBC Good interview. I love how much he talks, and sometimes maybe he shouldn't, but he did so. He did say that ESPN's direct consumer offering will launch quote no later than 2025. Espn overall their operating income surged 16% from a year ago to 987 million. So a couple interesting things he said was looking at the TV advertising business for the linear channels. He thinks there's still some opportunity there and that they're not as bad as even maybe they originally thought. So he made it clear look, there's no guarantee that we're going to sell these channels, so we'll see what they do with that. And then on the India, there's news that Reliance wants to buy Hotstar. He also came out and said well, when it comes to India, we haven't yet decided, but we might actually want to stay there and reinvest.
Speaker 3:I'm wondering on the ESPN side. So let's talk about the good news there with ESPN Plus the RSN Turmoil and the fact that ESPN has rights, that ESPN is a brand, it's a destination for sports fans. They are in a position, they already have rights for a number of the leagues and I just wonder if that's kind of infusing them with some new possibility. Let's call it that.
Speaker 1:I think it could be. I think it's a good point. Rsns are imploding.
Speaker 3:Just absolutely imploding and there's some interesting. The hard thing about reading about the whole sports market and all the rights is my analysis is that there's a lot of reporting about it. There's a lot of writing. There's just way too much conjecture. There's just a lot of unknowns.
Speaker 3:And again conjecture, because there's unknowns, but unfortunately sometimes it gets reported a little more like it's fact. So you kind of have to read a lot of it. But there's a common theme though, and the common theme is is that, look, these teams and these leagues in some cases, but especially the teams, they're sort of lost. Some of them are sort of like what do we do they really? They like the concept of going direct to the consumer, but that's not what they've ever done. It's not. You know, you're asking them to build a capability and to do it quickly, and so if they could go to ESPN, if they could license, strike a deal there I don't know, Possible.
Speaker 1:Fubo has been very successful with RSNs and Fubo, I think, has been very successful.
Speaker 3:Yeah, as a result.
Speaker 1:I'd say there's a couple let's call it three key takeaway points here that I think listeners should be aware of, because right now Disney is a cost-cutting story.
Speaker 3:Yes, it is.
Speaker 1:Let's just call it what it is. They also announced in during earnings that they think there's an additional $2 billion that they can cut out.
Speaker 1:They have a new CFO coming in. But now they've got to be careful how deep they cut here, because at some point it impacts your content inventory and your slate of what's coming out, and we all know how important content is. I would say opinion-based, not fact. I don't particularly think Disney's had a lot of hits as of late content-wise, so you've got to be careful. If you keep cutting and you don't have enough content, you might impact your turn in a negative way. So that's the first thing to keep an eye on. The second is they've talked about wanting to have a partner, or two partners, taking an equity stake in ESPN, and one of the reasons they said that is because the partner could quote help with technology, which confuses me, because Disney's core problem is not technology. The number one problem with ESPN is that the cost of sports rights is so high.
Speaker 1:So that wouldn't really help them there. And then the final thing I'll say is, from a content licensing standpoint, disney has been licensing content to Netflix, as we know. Bob did come out and say they will continue to do so, but it won't be their core brands, which is expected, because that's what makes their platform valuable. But it makes me second guess if Disney really has their content strategy back on track, because what's the point of creating this content to begin with if there's not enough value to your core audience that you're licensing out to Netflix?
Speaker 3:That's right. Yeah, very true.
Speaker 1:It's kind of an odd approach. So the bottom line is we've got some information from Disney, but clearly they're looking at what the strategy is going forward. They did also announce that they're going to combine Disney Plus and Hulu into one app, doing a beta test in December. I don't know why the media is going bonkers over it. Who the hell cares? To be honest, that's not what's stopping subscribers coming to your network. So great. Roll out the platform or the app. I just hope it works well. Yeah, you know that technology comment.
Speaker 3:I'm also a little bit baffled by that one too. Like you know, first of all, you spent $3 billion on BAM Tech, and BAM Tech's a very solid platform, and yet we know that. You know they've had cuts in the technology group, and so, like what's going on here, I hope they're not running away from this asset that they already have in-house.
Speaker 1:Well, they pretty much, let's be honest, they pretty much have already ran away from it. A lot of that technology in the BAM Tech days is long gone. Those platforms are not being used. More than half, from what I understand from people internally, more than half of all the employees that used to be at BAM Tech or Con.
Speaker 1:That's a lot of people and that acquisition was Quite a long time ago and it was also at a time where, if we remember, when Disney Plus launched, there wasn't these things going on between COVID, macroeconomic issues in the business world, the arson issues, all the things taking place with sports. So really quite a Different time in the media landscape. But yeah, I don't get the whole like technical help, I don't really think that's the limitation here. So we'll have to watch Disney. Let's jump into Warner Bros Discovery. They lost 700,000 DTC subs so they now have 90 or 5.1 million.
Speaker 1:The key thing here is this quarter they had positive EBITDA of a hundred and eleven million dollars in their DTC business 2.43 million, sorry, 2.43 billion. So it's it's half the size, almost exactly just a little less than half the size of Disney's DTC business, but it generated positive EBITDA in the quarter. At the same time the CFO said quote it is unlikely from today's perspective that we will hit our target leverage range by the end of 2024 without a meaningful recovery of the TV and market. So Not surprising. There we know advertising is taking a hit. We did see a few positive signs from Roku and some others recently saying they think it's getting better, but Warner Bros Discovery's TV network segment, their ad revenue felt well. Percent you over here. The CEO said this is a generational disruption. We're going through Going through that with a streaming service that's losing billions of dollars. It's really difficult to go on offense.
Speaker 1:Wow Not surprising with that either. They also said the reason they lost DTC subs this quarter was quote largely a result of an extraordinarily light content. Slate Makes sense because of the strike.
Speaker 3:Yeah, and you know, just anecdotally, and and I I love, you know, hbo Max and you know so I can't say this, you know it actually saddens me, but Just in fact, last night, you know, my wife and I were looking for a new, you know something new to start. You know, we finished what we were watching and I went to HBO Max and was rooting around and I, you know, unfortunately I'd left and, you know, found something somewhere else because I felt like there's not anything here. You know, not only that I didn't like, but just I was a little bit surprised, you know. So Well, also the strikes we can understand.
Speaker 1:We can understand why exactly, but that is a very real thing.
Speaker 3:You know, now I'm, you know I'm in a position being in the industry etc. Where you know I'm not gonna cancel. But you know, if I had that feeling and kind of the average person are kind of like, maybe I'll cancel.
Speaker 1:You know it's Unfortunate, yeah, I'm interested to see Q4 numbers for sure. I mean, we'll mention SAGA, for strike is not. I guess it's over, not, I guess it's it's over, but it's not yet voted on and you know the paperwork still has to be done. We don't have details yet. I think we will buy Monday, tuesday on what the deal terms are, because there is a streaming quote Bonus in there, but we don't know what that means exactly. But that is going to help all the companies. It's gonna take them a while to get back and get starting now.
Speaker 1:The key thing for listeners here to understand a Warner Bros is this the company repaid 2.4 billion dollars of debt during the quarter. That's important and the reason is that they are setting themselves up to position themselves to be an Acquire rather than a distressed asset, so they are paying down debt and increasing cash flow. They've paid down 12 billion dollars in debt and expects to generate at least five billion dollars in free cash flow this year. Now they still have a 45.3 billion dollar gross debt, so they've got some some debt issues there. But here's why listeners should care.
Speaker 1:There's a lot of talk in the industry about consolidation taking place. A lot of that is nonsense, because these companies are too big to acquire one another. From a regulatory standpoint, however, if a company gets to a certain point where they're a distressed asset, regulators throw that monopoly thing out the window. It's no longer an objection because it's considered a distressed asset. Now, what that barrier is, I do not know Not one of those finance lawyer people but I thought it was very interesting that the CEO, specifically at Warner Brothers, called out In the earnings call that they're looking to position themselves in an inquirer rather than in a distressed asset.
Speaker 3:As time goes on, yeah, there's a reason why he said that explicitly.
Speaker 1:Yes, and paid down $12 billion in debt this year.
Speaker 3:And look, as you pointed out at the beginning of the update, for Warner Bros they had positive EBITDA of 111 million. So as much as for D to C Exactly. And while Disney and others are still losing money less, but they're still losing, they 111 million.
Speaker 1:Yeah, the question is, Mark, can they keep that up?
Speaker 3:multiple quarters in a row? Yes, that's true.
Speaker 1:Or is that just a one-off, because you're not spending as much money and content. That or maybe?
Speaker 3:you back advertising and marketing and you can go a quarter and still, but then again they lost 700,000 D to C subscribers, so it could be this quarter. They're like, hey, gang, we need to spend that 111 million on marketing. I mean, that's how this works.
Speaker 1:And they did raise pricing.
Speaker 3:They raised pricing I don't remember what month it was, but pricing also went up, so that might counteract the loss.
Speaker 1:I thought it was. I can't remember now. If all the price increases what month it take place? Let's go to Dish. So Sling TV actually gained subs, let's see. But overall Dish lost 64,000 TV subs. So Sling gained 117,000. So Sling now has 2.12 million subscribers.
Speaker 1:Dish's stock man it was down over 20% when the market opened after their earnings this week. I didn't look at it, but their net loss was 139 million. So that's a big deal because they had 412 million in net income earned year over year. So they went from earning that to losing 139 million. So they also announced layoffs. More than 500 people, specifically in Colorado, were laid off. They have to file all companies have to file certain things depending on how they do layoffs in certain states. So while Dish had to say how many employees they laid off in Colorado, they would not comment on the total number of employees they laid off. The media reported is 20% of the overall workforce. They did go on record and say that number is not accurate at all. They said it is less than 20% but that could be 19% for all of us now. So not really sure what that means. But more layoffs in the space.
Speaker 1:Let's jump to Visio Now. Visio now has 290 fast channels. That's incredible. Their platform plus net revenue was up 22% year over year. But now here's the problem. Their smart cast active accounts is now 19.9 million, so call it 20 million. But the growth is slowing. They only added a total of 1.3 million new active accounts over the past four quarters, and the reason for that is they only really get more active accounts if they sell more TVs, and in the quarter they shipped 1.1 million TVs down 8%. That's how many they shipped. Keep in mind, that's not how many were sold.
Speaker 3:That's right.
Speaker 1:That's right Because they're sitting in the back of warehouses and on retail floors or they're not yet connected to the internet. Now the other number here, Mark, that we always love is ARPU. So smart cast. Arpu was $31.55. That's trailing 12 months.
Speaker 3:So we'll divide that by 12.
Speaker 1:But that's up 14% year over year. So they're always good about growing ARPU. And then the final thing is they announced their quote beginning to explore partnerships with other TV OEMs. Looking to let me just rephrase this, they didn't really quote this too well they're looking at other TV manufacturers that they might partner with who want to get into the CTV market.
Speaker 3:They'll basically license their OS, their software stack.
Speaker 1:It sounds like it. They basically said, between their expertise with hardware and software, they think they could work with some future partners, but they didn't outline who that was, so not really sure. Is anyone interested in working with Hizyo? I don't really know. Who are they going to target? The ones that are using Roku's OS? Hard to know. But they did mention that Prices real quickly. Netflix's stock is up $100 in the last 23 days. 100 bucks.
Speaker 3:We love pointing this out, dan, for all of those people who, just six months ago, were calling for Netflix to be acquired.
Speaker 1:A year ago they were going to have to be acquired.
Speaker 3:No way they can make it $100, 23 days.
Speaker 1:Now. Some of that raised today were recording us after the market closes on Friday, november 10th. So part of that raise is due to some. Analysts on the street did put out new targets for Netflix stock in the 510 to 525 range. So when analysts do that, that obviously helps the stock. So that's part of the reason the stock was up today. Let's go into some vendors. Mark Akamai had some good earnings Not surprising there. Total revenue of $965 million in the quarter, so they're almost a billion dollars. A quarter Revenue was up 9% year over year. Security revenue was up 20%. Delivery revenue was down 4%, but that's good considering delivery revenue was down 9% and some other larger numbers, so it's stabilizing a bit. Compute revenue still very small, but up 19%. They gave full year revenue guidance of $3.8 billion to $3.82 billion. So next year for sure Akamai's a $4 billion a year company. Just in terms of revenue, that's incredible.
Speaker 3:Does that split of security revenue? It's almost exactly half. It's $456 million on 965. Does that surprise you no?
Speaker 1:not at all. If you look at the runway they have in the security business, it's just incredible WAF, DDoS, bot mitigation, credential stuffing, all the stuff that they're doing out there Akamai, as we know from a CDN standpoint, diversified away from that business many, many, many years ago.
Speaker 1:Yeah, with application acceleration, all those other services. At the time the companies they bought everybody's. Every other CDN is trying to follow suit. So when it comes to the security side, akamai still has such a large runway ahead of them. There's so much for their head of others in terms of product feature set capacity. I mean, just look at the revenue alone. People can argue and say, no, I like another product better. Okay, just let's look at something we can't argue with revenue. Yeah, it's pretty incredible. Got to give them a lot of credit on that For sure. Let's jump to BrightCove. We covered BrightCove's earnings mark last week but in their filing there was a couple things I called out here. During the company BrightCove's CTO left. They did not announce that actually in the filing.
Speaker 3:Sorry, the.
Speaker 1:CRO. Let me back up here. The CRO left the company. They are actively hiring for a replacement. They mentioned that. But what they didn't mention is that their CTO left and if you go to the website now, they no longer list a CTO. I don't know if that's a position they're going to refill or not, but we'll see. The company had a $30 million line of credit. They've redone that credit with a new loan modification agreement so they still have it. They're going to use it as a quote operating safety net as they go forward. This was interesting in their filing In the nine months that ended September 30th so Q3, they decreased their content delivery network expenses by 4 million and decreased their marketing program expenses by 2.2 million year over year.
Speaker 3:The marketing program one doesn't surprise me. No, all they had to do was cut BrightCove.
Speaker 1:Play.
Speaker 3:I mean that conference Come on.
Speaker 1:Well, they still did it online.
Speaker 3:Yeah, you have it. I mean, they hired like Hollywood film producers to do. I bet you they said Dan, I'll bet you they spent a million bucks on it. I would not be surprised.
Speaker 1:Oh, they're expensive. Let's say that it's six figures. For sure I don't know if it hits seven, but they don't, they did it, but they did.
Speaker 1:So we do. Also, 60% of the revenue was generated from North America. They also said quote we expect customers using our volume offerings to continue to decrease in 2023 and beyond as we continue to focus on the market for premium solutions. Not surprising to me, at the end of Q3, they had 671 employees, which was only down 32 year over year. And then there was a comment in the filing that their former CEO, jeffery, was paid $1.1 million when he retired for his annual base compensation and 2022 annual bonus. And then the final piece is I said we have seen customers seeking to move to monthly or quarterly billing terms versus annual in advance, which is altered and effectively slows our collections. Just another point of where companies want to hold on to their money as long as possible. So when they're going to pay vendors, it's like, hey, we want some more time to pay you.
Speaker 1:Let's jump to Kaltora. They had revenue of $43.5 million, so up 6% over year. That was good. Their gap net loss was $10.7 million good for them because it was down from almost 20 million year over year. Full year revenue guidance of $171 to $173. So midpoint there marked they'd be up 2% over 2022, which isn't great.
Speaker 1:But you've got some companies that are negative. They had $34 million in cash and cash equivalents. The ComScore revenue of $91 million, down about 2%. Net income was $2.6 million. Listen to this compared to a net loss of $52.4 million year over year. So if listeners aren't getting the point here, look at how much money companies have cut out to try and get to net income and we're starting to see it Growth mark. We just talked about Kaltora maybe having 2%. Well, for ComScore, revenue guidance of $376 million is flat to negative 1% year over year. They ended Q3 with $30.3 million in cash and cash equivalents. Now, before we jump on to the next one Mark, one of the things listeners need to realize is what's driving growth in this industry. Going forward will not be technology or private products or services. It is going to be what happens with vendors, finances and their banking. Because, if you notice, comscore has $30.3 million in cash and cash equivalents. Kaltora has $34 million. If you look at how much I've written down here, ComScore has $30.3 million.
Speaker 3:BrightCove has $16.4 million.
Speaker 1:EGO. Their earnings are not yet, but in the last one has $36.2 million. So what's going on here is different from previous years is the cost of money is so high percentage wise 13%, 14%, 15% versus interest you're paying of 1% to 2% three years ago that you'll notice companies no longer have a bit of a war chest for cash and cash equivalents. So what does that do? That keeps them from being able to do acquisitions and their stock prices aren't doing great. So listeners need to realize that some vendors in the market are having trouble getting additional money, getting additional revolving line of credit.
Speaker 1:And that impacts growth. That impacts how many people they lay off and while we're going to have some good Q4 numbers, I think as far as streaming overall and whatnot, we are still going to have problems from a vendor standpoint in the new year. There are more layoffs that are going to have to be done for companies to get to free cash flow. And here's the key point you can't just get to it for a quarter, you have to show Wall Street. You can do it three or four quarters in a row. It's sustainable.
Speaker 3:Yeah.
Speaker 1:Sustainable, so positive EBITDA first, free cash flow after that is really really important. So if you look at how much cash a lot of these vendors have, interesting that it's all between the 15 to $35 million range. Now Acoma doesn't count. Those guys have been printing their own money for years. All right, there's some out there who are in a whole other level of cash and cash flow, but the smaller vendors keep an eye on that. Let's jump into Vimeo. Vimeo's revenue is 106 million, so down 2% year over year. Net income though 8 million. There's another one Net income 8 million. Okay, it's a low number, but it's positive.
Speaker 3:That's right.
Speaker 1:In Q4, they expect bookings to decline in the mid to single digits year over year. A couple other things to note here. Unfortunately, vimeo is going back to this term enterprise Again, noise me their enterprise customer. The ARPU was $1,737 a month. I just don't think that's enterprise. Q3 headcount was down 12% year over year. There are what they call self-service and add-on customers. Their ARPU is $16.83 a month. So that's another one there.
Speaker 1:You know, mark, I totally messed up on this one. So apologies to BrightCove, it was not BrightCove CTO that I was saying left, it wasn't on the website. My apologies there. I messed that up with Vimeo. Vimeo CTO is gone and has been removed from the website. So apologies to BrightCove, I didn't mean that it was Vimeo. So in the shareholder letter they did not announce that, but the person is gone and if you look them up on LinkedIn you can see that they've left.
Speaker 1:And then, finally, if you look at the number of subscribers Vimeo has, again that's a very weird metric to use. If you're talking about enterprise users, why do you call them subscribers? Doesn't make sense to me. But note, in the case of customers who maintain accounts across things like self-serve, add-on, vimeo, enterprise and other, vimeo counts them as one subscriber for each of the components in which they maintain a subscription. That is their wording directly out of the SEC filing, which means those numbers are larger than they really should be. They also said they see some headwinds on the pipeline side in Q3 and Q4. They said it's largely due to execution issues that are being addressed and that the macroeconomic environment may have also had some impact. Not surprising.
Speaker 1:Then a couple other things. Mark, finally, cdn77, private company. Been around a while, met with them recently and they nicely allowed me to disclose on the blog in LinkedIn, what their revenue is. So, like we talked about last week on the podcast, bitmovin' nicely allowed me to put out the revenue CDN77 did as well. I love this because it allows us in the industry, and especially anyone who has an analyst role, to really gauge, judge, with actual methodology and numbers.
Speaker 1:What is the market looking like from a growth standpoint for certain size vendors? So revenue for 2023 for CDN77 will be in the 140 to 150 million range. Two thirds of their revenue comes from content delivery, primarily video. The other portion of the revenue is from traditional infrastructure services. They said revenue for 2023, it's up 30% year over year and they expected to get closer to 40% year over year in 2024. They're also currently cash flow positive and since the start of the year they upgraded their network from 105 terabits of egress capacity to 150 terabits of egress capacity. They're extremely quick and nimble and it was interesting when the Lumen news was announced. I can just see in the market from some other data points and conversations how quickly they were going after Lumen customers. They put a whole war room together. They posted a photo of themselves in LinkedIn. They also announced a week ago that they've already signed up their 20th XLumen customer in less than a month. So really focused going after a segment of the market that's not. Hey, let's go get.
Speaker 3:Disney. That's not the business they're going after, which is smart because the margins are higher in those mid-tier customers.
Speaker 1:It's traffic outside the US so it doesn't have the lowest price point. Very quick and nimble not trying to be a half a billion dollar company real quickly like every other CDN, has tried. So interesting to see what they're doing. I love the fact they put the numbers out and with Lumen and StackPath deciding to exit the market certainly helps them. I will also just say I'm not going to use names here because frankly I don't want to give them any visibility, but the number of analysts in the space who supposedly know the CDN market who in the last week alone in their blog poster podcast said that Akamai acquired all of Lumen's CDN contracts, the number of analysts saying that just boggles my mind. That is not what Akamai has done, that's what they did, it's not what they announced. It was quote approximately a hundred enterprise customers. So that's important because if Akamai had acquired all of Lumen and StackPath's CDN business and contracts, you wouldn't have CDN 77 being able to pick up customers or clients, not this quickly.
Speaker 1:So important to point that out. And then finally, mark, let's just end with. You already talked about what we're seeing in the market as far as just the economic conditions, but interesting comments here from a couple of different vendors. I'll read just two Cloudflare, they said. With broadening geopolitical uncertainty and increasingly mixed macroeconomic data points, the business environment in which we operate remains challenging to predict.
Speaker 1:Takeove even more so. Worldwide economic uncertainties and negative trends, including financial and credit market fluctuations, uncertainty in the banking sector, rising interest rates, political unrest and they listed a whole bunch of other things have and could continue to affect our business, financial condition and results of operations. Now, this isn't just break hope, this isn't just Cloudflare, and some of this they have to call out pretty much legally to cover themselves and their SEC filings. But my point is you have to be aware of this if you're working in a company tied to streaming media, broadcast pay TV, whatever you want to call it, ott, because these numbers tell the story. So I spoke to a couple of people this week, mark, when Lumen did layoffs and they reached out about help. So I called them on the phone and I was so surprised. Lumen did layoffs and again it's just like why, why would you be surprised? Look at their numbers. So that's important, and I saw a couple of posts today from people talking about this and whatnot doing LinkedIn posts. So there's more of that to come. I hate to put that out to people, but the reality is we need real information in the market and not sugarcoating it. Everything is fine, there's no issues, and you should really, whoever you are, wherever you work, whatever your job title is definitely look at what's taking place in the market from a financial standpoint. That's true. It's definitely important.
Speaker 1:On the advertising side, finally, we had some mixed results. Mark New York Times they had more subs, which was great. Itv, rtl overall ad revenues fell, but it fell less than in previous years, so that was good. We've seen Roku talk about they think advertising is getting a little bit better. Walt Disney said well, it's not really great on the TV side. Well, we know that, but Roku's not in the pay TV business, so that's good. I think we're starting to see some positive signs in the ad side, but that is not something that we're going to get out of A whole from in the industry in a quarter or two. That's going to take some time. So I think next year budgets tighten even further. I think there are additional layoffs. If some of the vendors in the market cannot get a revolving line of credit, we are definitely going to have some companies that are going to have to do something because they'll be out of cash in a year.
Speaker 3:Yeah, you know, this credit issue, this revolving line of credit, is one that you know it's hard. If you're an employee, and especially in a medium or larger size company, you just would never get exposure to it. But in a smaller company, if it's possible, you might want to understand what the situation is. I was talking to one founder who has a very you know, it's a modest size company but they've been in the market for a while. They're you know, they're running it very wisely. They haven't raised money, they're bootstrapped. He was telling me that one bank he deals with called him up out of the blue and raised the interest rate to 14 percent 14., I believe. And then not only so, you know, so that's a golper but then started putting some restrictions on if he didn't hurt, hit certain revenue targets and I think there was even some profitability targets, and I mean it was. You know the implication, and he didn't say this, but you know, in him describing the situation, the implication was that the bank kind of maybe doesn't want him as a customer anymore.
Speaker 1:Want the business right.
Speaker 3:And it's incredible because this is not and they're not directly in the space, so it's no one anybody would particularly know. But you know he's, you know he has a very viable ongoing. He runs it revenue neutral, so you know they're not necessarily highly profitable because he's investing back in. But the point is you know he's doing all the right things to run the business and his bank. You know which he relies on from time to time when he needs to flex into, you know, into capital. With the line of credit it may not be there and yeah, it may not and they might have to restructure that.
Speaker 3:If it's debt related.
Speaker 1:You might restructure your debt, which you're seeing companies do, but also the SVB bank issues. A lot of companies lost their line of credit through that, so now they had to go to new banks and going to banks two years after that when interest rates are much, much different. I mean one and a half percent to 13 or 14 percent today is the difference between companies expanding or not Growing or not 100 percent.
Speaker 1:So it's a huge issue and I know, mark, we've been saying, I've been saying at least probably six months we'll go through more of the all of this business stuff on a podcast one day and we do cover it a little bit. But the Fed interest rate and the other things, it's a big impact in our industry and my concern is more people get laid off. They're really surprised by it and they're not prepared how to pivot next.
Speaker 3:Yeah, we keep saying it. We really do need to do it because also on the, you know, on the layoff in the job search front, there's a common theme as well. You know, some companies that I'm involved in are recruiting and hiring for various roles. Not a lot of positions open, but you know there are some. And on the sales and on the, even the marketing side, it just continues to astound me and you've said this many times. The basic qualification is I've been in the industry X number of years and I have an amazing Rolodex. That's the quality, that's the extent of the qualification.
Speaker 3:And my point in that is that if, if, if, you can't connect to and make it very, very clear about how you drove revenue or are driving revenue and can drive revenue the years in the industry, and unfortunately, you know as much as yes, so you know connections and a Rolodex super helpful and you know that's not discounting that, but that is not what people are hiring for today. It's the methodology Exactly, exactly and so, and, and the sad thing is is that you know, I have a feeling that obviously you know, these individuals did sustain a career, they obviously did something for the companies they work for, I'll say wouldn't have continued to, you know, have kept their job, et cetera.
Speaker 1:Well, I would say not everybody, but okay, yeah, well, not everybody. Well, that's and, and, and I'm looking at a lot of LinkedIn's Mark where you know the ones before. We got in the call here and I was like, okay, over the last 10 years this person's been at eight companies. Well, yeah, so like there's a problem, you're jumping through new company every 11 months.
Speaker 3:You can't possibly drive revenue in such short stints. You know you're right.
Speaker 1:Yeah, right, for sure, there's been a lot of times in this industry where there's been so much money and so much hiring. Yeah, I think that's part of just whether or not someone's qualified or not or what the position is. That levels that. But yeah, we, we will do the jobs thing. I will do that job zoom in December. I'm still working on dates right now or? Maybe actually end of November after.
Speaker 1:Thanksgiving yeah that might be a good. The holidays make it a little tricky, but we will do it. So we're out of time here. Mark, let's keep this short. I appreciate everyone listening. Something that Mark and I talked about today is up on my LinkedIn. Also, if you're interested in seeing any of the videos from the NAB show streaming summit in New York City last month, they are all online.
Speaker 1:Awesome Put them up today. So NAB streaming. I should know the URL right so long a day. It's NABstreamingSummitcom. There's a link. If you scroll down, you can see all the videos. Thanks to CalTor for giving us the free platform. Thanks to Mobion for doing all the video capture. Those are online. And then, mark, I'm also opening the call for speakers. By the time people are listening to the podcast, it will already be open at NABstreamingSummitcom. We'll be adding a third track on AI, like I mentioned previously. So any questions reach out to me, mark, and I thank you all for listening and attending. Next month, mark, it'll be two years, somehow, that we've been doing this podcast and somehow you're still talking to me, so that's a good sign. Yeah, this is like 75 or 76 episodes.
Speaker 3:And you know, let's see, I think you called me a year before that, even to suggest that you know, because I'm like Dan, are we going to do this thing? You're like, yeah, yeah, yeah, I want to do it.
Speaker 1:I did Yep, it took a whole year just to actually set aside the time. But yeah, we're on two years come December, so you'll get some nice things showing up in the mail for you next month. You can do some testing on. But yeah, we thank everyone for listening. Any questions reach out to Mark and I. Everyone have a good rest of your week. We'll talk to you in the next podcast. Thanks very much.
Speaker 2:If you enjoyed the show, send it to a friend. Have questions for Dan or Mark? Keep them on LinkedIn at any time, and be sure to check out Dan's blog at streamingmediablogcom.