LiveXLive Leverages Diversified Distribution Strategy to Accelerate Significant Growth
New York, New York–(Newsfile Corp. – April 5, 2021) – PCG Digital — With more than one million subscribers entering 2021, LiveXLive (NASDAQ: LIVX) is using a multi-channel approach to accelerate its growth. The goal is to hit the 10 million mark by 2030, when the total available market (TAM) for music subscribers is estimated at $1.2 billion.
On February 11, LIVX released a report showing record growth for an eleventh consecutive quarter. Revenue for the quarter increased 96.9% year-on-year to $19.1 million. Total revenue forecast for fiscal 2021 is expected to be between $64 million and $69.5 million.
That’s not all. Shareholders’ equity increased by $23.5 million and cash increased from $5.2 million to $17.6 million during the quarter. This all happened after two major acquisitions in 2020. PodcastOne was acquired in July, Custom Custom Solutions (CPS) in December.
Distribute music content with LiveXLive Slacker Radio
Every great product or service needs a delivery mechanism. For LIVX, it’s Slacker Radio. They had over two billion audio plays in 2020, 63 billion since their inception. With an ever-increasing thirst for subscription music, those numbers are set to increase this year.
Rated Best Quality Music App and Editor’s Choice by PC Magazine, one of the keys to success in 2021 is their listeners’ desire for live music. Obviously, live music was limited during the COVID-19 pandemic, but 74% of concert fans said they would continue to watch live events even after physical events resume. LiveXLive, Slacker Radio, and React will stream these shows in person.
PodcastOne adds another dimension and new listeners
Widely regarded as a leading music distributor, LIVX diversified its offering in 2020 with the acquisition of PodcastOne, a company that grossed $27.5 million alone in 2019. PodcastOne generates over $2.25 billion downloads per year with more than 400 episodes distributed per week on a stable of hundreds of leading podcasts.
It was a big victory. PodcastOne founder Norm Pattiz is the mastermind behind the explosive growth of Westwood One Radio, America’s largest audio network. The acquisition does more than just diversify the LIVX product line, it brings in existing listeners. PodcastOne’s “LadyGang” podcast recently hit 100 million downloads. In addition to LadyGang’s Keltie Knight, Becca Tobin and Jac Vanek, the network also features podcasts from Adam Carolla, Pitbull, Brett Favre, Kaitlyn Bristowe, Todd and Julie Chrisley, Michael Irvin and Mike Tyson. Fans of these shows now have full access to music on Slacker Radio.
CPS Acquisition Helps Expand Social Media Footprint
Custom Custom Solutions (CPS) is an e-commerce platform that generated $20 million in revenue in 2020 before the LIVX acquisition. The deal was completed debt-free and comes with approximately $5.2 million in working capital.
The financial numbers for this acquisition look great, but they aren’t the only benefit of the deal. LiveXLive plans to use the CPS platform to connect music artists and influencers with major networks to improve their social media footprint.
CPS also provides a direct-to-consumer e-commerce platform, opening up new monetization opportunities. The global licensed merchandise market is expected to reach $400 million over the next two years, so this partnership will help accelerate LIVX’s growth.
New networks increase sponsorship and advertising revenue
Offering integrated channels as a venue to reach young listeners has already paid off for LIVX as part of its multi-year livestreaming partnership with iHeartRadio. With podcasts and e-commerce, they are now able to offer expanded sponsorship opportunities.
Some of the biggest names that have backed LIVX’s growing media empire are Pepsi, McDonald’s, Porsche, Mike’s Hard Lemonade and Capital One. These are in addition to integrated sponsorship and merchandise programs with top artists and musicians.
The company has also struck a deal with Tesla to provide a one-year paid subscription to Slacker Radio in all new Tesla electric models sold in the United States. That number is expected to be around 750,000 units, a 50% increase over Tesla’s sales figures from last year.
Market outlook for LIVX in 2021
Subscription revenue, which represented 94% of revenue in February 2020, now represents only 44% of revenue. The remaining 56% comes from advertisers. Revenues for 2022 are estimated to be between $90 million and $100 million, and that’s assuming no revenue is generated from live events, which are still pending. The acquisitions of PodcastOne and CPS in 2020 have facilitated a diversification of revenue sources which makes the company’s outlook bright.
In summary, most analysts covering the company consider it a solid buy, and investors can potentially see a good return on LIVX in 2021 if the fundamentals continue to improve.
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