LiveOne, Inc. (LVO) Earnings Call Transcript
May 22, 2023
Earnings Call Speaker Segments
Okay. All right. Thanks, everyone. So today, I'm joined by Rob Ellin, Chairman and CEO of LiveOne. And Rob, for with you, we just jump into it.
Beautiful. Doing really well.
So maybe just to start, you can give us a little bit of background on LiveOne and how you got to where you are today?
Yes. Sure. So LiveOne, I started 2016, took public in 2017, end of '17 and immediately started to build a moat around the music subscription world. What we did is we acquired Slacker Radio, then we acquired PodcastOne, then we built a pay-per-view business. And we basically built a flywheel that gave the most unique opportunity for consumers to be able to absorb music. We have partnerships at every record label every publisher in the world and put us in the position of really growing it. We've grown that subscription from 500,000 to well over 3 million now and on our way to 10 million.
Awesome. And I'll circle back to the publisher relationships and stuff in a little bit. But this also isn't your first shot at building a business in the public eye. It might be helpful for folks to give a little bit of background on where you came from.
Yes. So years ago, I started LiveOne.com, which most of you probably know, was a search engine, ended up selling to Barry Diller. In the private markets, it was about to go public in 2000, the market crashed. We got a really quick learning curve that we'll talk about more deeply, Craig, as we go through this. But we were fortunate enough to sell that to Barry Diller for almost $1 billion. And then I started a company called Digital Turbine. Most of you know it is Apps, A-P-P-S, almost in the exact same fashion, B2B partnerships owning technology with a world-class team and a microcap company.
Cool. If you wouldn't mind digging a little bit deeper on some of those lessons learned along the way. I think that might be interesting.
Digital Turbine, took it public 2008. We woke up one day and skiing down the mountain in Aspen. We lost about 85% of our value. It took almost 2 years to recover that and fighting through all of the different economic issues as well as the stock market issues that you face. And we turned that around and we fought through it. We had to take cost down dramatically. We had to move from a story stock to a growth stock to a value stock. And then we woke up 5 years later and it went to $12 billion in change. So I think very similar here. We're going through that same cycle. Same cycle was 2000 and 2008, except this one is way harder, right? It's way more difficult because we're now facing 23 months of this. So 22 months ago, I woke up and my team woke up and we said we got to get into the bunkers. And we've got to change philosophically where the business is going. We got to look at every single area of the business, and we have to really focus from growth to bottom line. And we've taken that EBITDA from negative $18 million to positive $12 million this year, and I just announced guidance for this year way higher.
Awesome. So on that point, Obviously, guidance for this year looks pretty positive. Maybe you can recap for folks where you expect to wind up for 2024, and just a side note, right, 2024 is March?
Yes. So we just finished our year-end. We did about $100 million, in between $11 million and $12 million of EBITDA. You'll shortly see those final numbers coming out with the March 31 year end. We announced, for this year, $115 million to $125 million of revenues and $12 million to $15 million of EBITDA. And then for the first time ever, I separate out my audio business of PodcastOne and Slacker, and I'll articulate shortly why. And I said we're going to do $95 million to $105 million and $18 million to $21 million of EBITDA and $12 million minimum of operating cash. And what I said on that call for any of you listened is, those numbers are really big. That's already built into the current revenues current business today, and there's massive upside from there in some of the projects that we'll talk about in the subsidiaries of the company.
Got it. So a theme for some of the other folks in the music business over the last couple of quarters has been softness in global recorded music attributed to a number of different things depending on who you're talking to. Music has tremendous tailwinds. I'm curious to see or hear what you're seeing in your business.
I mean, we're built off the backs of 2 things. We're a creator-first platform. So we've built off the relationship we have with the creators. We've had over 3,000 artists perform on our platform to an audience of 5 billion engagements and 640 million live streams. Every single one of those 3,000 artists hit their social media and told their fans to come listen or watch on LiveOne. So we do not spend any money on marketing. We can't afford to compete with the Spotifys and the Apples at $80 subs. And when you talk about going back to learning experiences, years ago, I own Casa, and I got a hard core lesson on how expensive it is to try to buy a consumer and try to keep them, right, and keep that breakage. So we focus all on creative first and helping them let them drive our audience. And then second is on B2B partners who have massive distribution of 10 million to 2.5 billion eyeballs around the world to drive our audiences.
Got it. And you may have just touched on this a little bit, but music distribution and profit are not often words that go hand-in-hand. Given where you are today from a scale perspective, hitting profitability this year and -- in a meaningful way, what makes your model different?
It's a great question. So the top tier at $9.99, going at probably %12.99 and $15.99 over time. And I think there's tremendous price electricity that they can raise prices. We're really the Walmart of our space, right? We're in that middle tier where literally, our average ARPU is in the $3.50 range. And because of that, it's based on usage, it's based on what music we include in there. So we don't have to have every single song. If I launch a watch -- and I'm making this up. I want to watch with Disney and it's only for kids, I will only need kids music, right? So we define ourselves as that low-cost provider that has the flexibility and the nimble right behavior to be able to service those customers but also to be able to white label for our customers at a price that makes sense for them. So we -- our margins are over 33% right, versus the industry being at 17%, and I expect them to stay that way without raising prices. If we're able to raise prices, as everyone's talking about raising them now, if they continue to raise prices, we'll be able to raise a little bit and the margins can get better.
Over the last 12 months, you've taken a lot of cost out of the business. You referenced cost cutting a little bit earlier. I think the number is somewhere around $30 million. What's been the focus area for you in terms of cost reduction and rationalization, is there more to do from here?
So we had to do a couple of things. First of all, we -- it was hard to consolidate during COVID , I don't know what everyone else's believe so, but I think it's critical that people are back in the office. People are, especially in the media space, collaborating together, having time together. And it's when you acquire 7 companies, it's hard to do that during COVID because you're not getting that experience of spending quality time directly with them from your key staff down. Now we've been able to consolidate in the cream rises to the top. We found out which of our team members are willing to stand the bunkers and fight, which of the team members are going to be the best in each of them and consolidate that. So we took $31.9 million of cost out of the business. And again, we started it 22 months ago, and it's worked out great. The team has fought through. I'm proud of them, and we're going to continue to look at on a regular basis how do we continue to increase our margins and keep our costs at a relatively low level until we figure out where this economy is going.
Alongside that, you've done a lot of work cleaning up the balance sheet over the last year or so. Maybe talk a little bit about what you've done on that front.
Yes. So it was a dog fight. When we acquired Slacker Radio, we took on $48 million of payables, right? Now it's the record labels and the publishers -- and there were a lot of hindrances in that, that I couldn't expand over season until that was cleaned up. But I had agreements with the labels and the publishers in order to be able to buy time to pay that over a period of time as we grow, all right? COVID hits and they got tougher on us. We fought through. We, in many ways, We were able to clean up the balance sheet. #1 is Universal Music converted $10 million of royalties at $4.14. Our biggest partner, Jeff Osher, No Street of Harvest, continued to put money in for the third time. He put $15 million of convertible debt in. He now has converted all of that into equity at $2.10. So we took our partners, and we've made them bigger partners. Fidelity, the Puritan Fund, Dan Kelley, a meeting after this, Dan took over for Romina Roni, who's my lead investor. They've continued to be a huge supporter of the company invested 3x. And so we took that, we cleaned up the balance sheet. We restructured our debt. We're now debt free and have the strongest balance sheet we've had since I started the company.
You've also been increasing your share repurchase program alongside that. How should we think about capital allocation for the company?
So I've been buying back debt. Bought back that at our podcast division, bought back some of the bridge notes from our financing. We just announced we increased our buyback to $5.5 million. If we close a credit line, which we've talked about, right? That credit line, we now have close to $30 million in short-term assets with no debt against it anymore. It's very possible to borrow more. If the stock is going to trade down here, we're going to continue to buy as a company. I personally bought them every single quarter since this company. And yes, I'd like to put my hands, my feet and my mouth in the same direction. I've invested over $18.7 million in the company. Almost a replicate to what I did in Digital Turbine. And I feel this is as strong or a bigger company in the next 2 to 3 years.
Switching to the M&A side. You referenced, I think, 7 deals over the last several years. Tell us about the long-term vision for LiveOne. Do you have all the pieces that you need? Are you still looking for other opportunities?
Yes. So we have -- this is the first time in my career -- I have 6 TAMs within one company. What do I mean by that? Start at the top of the pendulum, right? There's 500 million subscribers to music. Goldman Sachs is going to be 1.7 billion paying subscribers by 2027. It's a massive number. Probably 2/3 of the world will have some form of subscription free and paid. What I've said was going to get to 10 million subscribers within 5 years. That's less than 1% of the addressable market. If you guys are podcast fans, TAM #2, podcasting has grown since COVID from $400 million to $1.2 billion. From all the conferences and time I'm spending on Wall Street, it's amazing to watch how many hedge fund managers, how many investors, how many of their children have moved their habitual behavior towards podcasting. That market is going from $1.2 billion to $10 billion by 2030. Our pay-per-view business, which we did $28 million and $4 million of EBITDA during COVID has expansion to billions of dollars in it. So we have these remarkable TAMs within one company, our publishing business. This unique opportunities in AI that we'll talk about as well. So we're going to continue to look at additional acquisitions. I haven't done a single acquisition in 2.5 years, right? As I spin out our podcast business and our Slacker business into their own public companies, right? You're going to see a lot of chess moves in those directions and where there's a great roll-up strategy now to continue to roll up in those specific spaces and those specific TAMs.
You obviously mentioned a number of different opportunities. How do you think about prioritizing takes a lot of focus, I assume?
Yes. i We've got a great team. When you look at my team, they've created over $10 billion of media and technology companies -- I'm sorry, over $100 billion of media and technology companies. We have some of the best professionals in all of media who we sit on our board, a lot of the reagents. As we look at these divisions, we see opportunities to really expand them towards that $1 billion to $10 billion range of where they can go. And as we see that, our priorities are right deal, right partners. Everything we do is really focused on, is that the right positioning for the company, and we bring in the right culture, right? We describe our team as a family, and we want to keep it that way.
You talked about some of the corporate activity that's underway in terms of the spinout of Podcast One the SPAC deal that was announced for Slacker Radio. What's the objective in all of this?
So -- Always in all the companies I've built, private or publicly, the focus is my shareholders, right? For anyone who's been an investor before, right, billions and billions were made in Digital Turbine really was focused on it, right? And the focus of the energy is how do we unleash value in a very, very difficult market, right?. So our podcast business got valued at $230 million to $270 million. It was not very cavalier since Sirius Radio just bought Conan O’Brien $10 million in revenues paid $150 million 6 months ago, right? You just saw another acquisition done at 17x revenues. We're in really, really unique spaces that we have to focus on energy. So this [ unleashed ] value to give our management team some flexibility and to give us real flexibility to be able to both grow internally as well as externally. You're watching in our podcast business, I think we've announced a new podcaster moving from one of the large platforms almost on a weekly basis for the last 8 weeks. You're going to see more of that. What I mean by that, those podcasters already have traffic. They are already mature podcasts, but they're moving over because they need the full 360 service that we provide for them to grow.
On the podcasting side, if we look back maybe 2, 3 years ago, a lot of the large streaming businesses making a lot of headlines in terms of investment there? Why are you winning today? How are you attracting that talent to the platform?
So great question, Craig , and thanks. So to start with, again, when I described the 360 play, just like we do in music, we produce, we distribute, we market, we do the sponsor firm. We really handhold our creators in a fashion that they're not going to get service in large ones. And then we partnered with all of our competitors who are our friends and our partners. We stream across Spotify, Apple, Amazon, Samsung TVs. And I think there is just a massive opportunity to continue to grow those B2B deals and give our creators an opportunity to expand the horizon of where they can reach around the globe.
In terms of the separations of the different units or separate listings, I should say, of the different units, how do we think about the importance of having all those pieces together under one roof?
So there'll always be under one roof, right? The objective of all this was unleash value for our shareholders, but it also is the parent company is maintaining 75% to 80% of these companies. It gives us capital. It gives us currency. It gives us relevancy in those specific spaces. And one of the most exciting things about it, when I think about the community of PodcastOne, we have 2.4 billion downloads. We have 11 million uniques a month. It's a massive community, right? . Way bigger than any of the companies I took public previously at this early stage of it, right? It gives us the ability to consolidate all those into the parent company, continue to run that flywheel and grow off of each other, but also give some room for them to grow and stretch the muscles on their own.
Does the strategy change how we should think about the economics of the business going forward, decision-making? How do we think about all of those pieces?
No, it really hasn't changed at all. We've always talked about the 6 different TAMs. We talk about them now is they'll have separate trading stocks, a little Barry Diller, a little John [indiscernible], right? It happened by accident originally. We got an offer to put $8 million into our podcast business. We had originally announced we're going to spin out our pay-per-view business, and I expect that to happen as well in the very near future. But once the capital started coming in, in a tough market, it became such a great strategy for us in that we're able to use that capital to clean up our balance sheet to buy back stock. And if we do that same in one of our other divisions, we've just announced that Slacker Radio got valued at $160 million, and $160 million, that's $2 a share. PodcastOne at $2.30 to $2.70 is $3 a share, over $3 a share, right? That's $5 a share. Hopefully, the Street will start to recognize and the public company will start the LiveOne will start to trade properly as well.
You've built a pretty special relationship with Tesla over the last several years now. Can you talk about sort of your relationship with them, state of that relationship because it's pretty important, and where it goes from here?
Yes. So historically, when I've done acquisitions, I try to find an activist move at the time of acquisition before we actually close. When I bought Slacker Radio, there was a little tiny contract with Tesla, which was a 3-year contract. And we were doing about $210,000 in revenues. And my team went out to the facilities, went out to the plants, and we determined that this was going to be tens of millions, if not hundreds of millions of revenues over the next couple of years. I'm now -- this is now my fifth year going to sixth year. We just extended our contract for the tenth straight year. We averaged 7 years life. Every car that opens in North America, we are picking up a subscriber for an average of 7 years. So massive growth this year, massive growth opportunity and couldn't be more exciting to hit that 10-year mark. With that 10-year mark, we've just put all of our podcast into the cars. So for the first time ever, not only do we have a subscription revenue, but now we have an advertising and sponsorship revenue, we also have an opportunity to talk to those consumers for the first time, upsell, grow the relationship, expand the relationship. I'd love to see, as I'm a big believer in self-driving cars, I'd love to see video in the cars. There's a massive opportunity for us to expand overseas and potentially take over the cars overseas. So this is a terrific partnership. And I think, on top of that partnership, what it's done is it opened the floodgates for other B2B deals. We're now Verizon, T-Mobile and Sprint. We just announced an amazing deal with Android Automotive to white label our technology, our technology stack into cars and be able to use that as a Ford radio, as Cadillac radio. And I just think you want smarter than the rest of us. He just -- he understood by making a Tesla Radio and not having a Slacker or Spotify, he was talking to this consumer every day selling more cars. And so I think it was -- I think it's a brilliant move, and I think that strategy is going to expand, and I do expect to have at least a second car company this year. Our technology is now in 86 other cars and expanding, and I expect to expand overseas as well.
So double-clicking on that. As we think about international, I guess the predominant focus of the business has been domestic, it seems thus far. When does international really start to come into play? What's held you back so far?
So I talked about earlier, those sizable payables when we acquired Slacker Radio, that's now cleaned up. In fact, we have advances with the record labels now for the first time. So it's really a pleasure and it's starting to become fun. And as it becomes fun, you get to expand those licenses. So this is a year to expand the licenses overseas, the opportunity that 1/3 of our traffic, about 30% of our traffic has been global because I've streamed biggest music events in the world from Rock in Rio to EDC, China, Japan, Mexico to Jazz Montreux in Switzerland, just about every one of the major largest music events, and we've never got to really monetize. And we've got a little bit of sponsorship dollars, but we've never been -- and a little bit of distribution dollars, but we've never been able to monetize and convert those because we didn't have the license overseas. So I look forward to this year. And -- but most of you know, the subscription models, 50% is U.S. 50% is overseas, right? There's no reason we can't have 10%, 20% of it overseas quickly and eventually to 50%.
On the current state of the label relationships, it sounds like you've done a lot of work over the last couple of years getting that cleaned up. How would you characterize the relationship with the labels today?
Well, I got a few black eyes. If anyone who's dealt with labels, it's hard, it's hard. It's a tough battle, but it's also -- it's a battle that is worth it, right? I'm a huge fan. I've been in the music business for close to 30 years now in different aspects of it, and it's always been a moneymaker. So we're really proud of those relationships, and we're going to continue to grow those relationships and expand those relationships. I'd love to have the video rights that we had before COVID hit. We had built a moat to be able to do pay-per-view for live music events. And so when I stream Rock in Rio for 5 straight years, we averaged there were 91 million people a year watching Rock and Rio. [indiscernible] this year broke 100 million. These are fall off your share numbers, it's Super Bowl numbers, right? So if you think about an outside lands had 42 million and [indiscernible] at 72 million. These are staggering numbers. Our vision always when we built our technology for pay-per-view, when we built our technology from meet and greets, NFTs with Polygon as a partner, the opportunity was for us to expand that and be able to do pay-per-view. When COVID hit, we had to pull back, obviously. We lost all of our live partners for 2.5 years, almost 3 years. Now is the opportunity of that pay-per-view come back, and we see a huge opportunity to go back to the labels and have those video rights and create a brand-new revenue stream that's never existed before, just like sports did 40 years ago.
So maybe diving a little bit deeper on that point. How does Live play into the future of LiveOne, not -- all puns aside, it's obviously a huge portion of artist income. Where does it fit in for you guys?
So 5 billion engagements, 3,000 artists. What i mean 5 billion engagements, not only do the consumer watch or listen, they actually repurpose and sent it out to their friends to expanded that relationship dramatically. So the Live side of it, and again, just going back to a Rock and Rio, I'll use an example, 90 million people watched, 1 million people attended, okay? It's called the average ticket price. We'll give it a low number and call it $100 because Brazil is going to be a lot less than Coachella. Call it $100. Do you believe the consumer would pay $5 for a pay-per-view event to watch 7 days of the best music in the world? If you do, there's billions of dollars of revenues coming in pay-per-view, and I think it's coming right now. So when I got -- when COVID hit, I was doing $38 million in revenues, and a large portion of my business was moving to the live streaming side and the digital side of it. And then we got hit with COVID, we had to pull back. Now is the opportunity we can really expand that, and I see this is our biggest year ever in pay-per-view.
And within that, obviously, LiveOne plays a critical role. How do you see other folks in the ecosystem, right, the people are actually putting on the events or a Live Nation or somebody, right, what's their role in all of that?
So we locked up 2,500 largest music events in the world on the thesis that we would take the ESPN model, of which Steve Bornstein, who is to build ESPN and then built the NFL networks, right, blessed it and called it the ESPN of music, right? We bought up all those properties to create newsroom, hosts anchors, correspondence, and really create that next generation MTV or the ESPN music. And we did that, right? It opened up the floodgates to us to partner with iHeart and Live Nation and AEG, and we partner with all of them, right? Now is the opportunity with the consumer because of COVID, got to watch all these live events, and I'm sure all of you have that opportunity. They won't forget it ever, right? It's like sports 40 years ago. The consumer is now enamored with watching these live events. 100 million people watched Cochella, right? They're never going to stop. So now there's going to be sponsors coming in, there's going to be pay-per-view coming in, there's going to be merchandise coming in and you're going to create that new revenue stream. And so I see us, very shortly, really expanding that. You'll see it across our entire platform that all that tech stack that we built will be used for podcasters, their live shows will now be pay-per-view. Festivals will now be pay-per-view. Music events will be pay-per-view. We streamed everyone from BTS to Monster X, to Wiz Khalifa, to Pit Bull, depending on what kind of music. And we live and learn every day, which one is going to work, but the consumer is enamored with it and the consumer wanted it, and they're not turning that back on it.
As you look across all of the different TAMs you address, each one of them has some pretty large and deep pocketed competitors. How do you stack up against those folks? What enables you to win long term?
It's a great question. So to start with, they're all my partners, right? I distribute across all of them, and I partnered with just about every single one of them. So we don't compete with them. We're really a unique model in that, LiveOne, you're a subscriber to it. Many of our subscribers are subscribers to Spotify. In fact, I am, right? I love Spotify, right? There's certain aspects of that playlists that are amazing do amazing things. We're a very different experience. Ours is built on original programming. If you want to come see something truly unique in music, truly unique in music and pop culture, you're going to come to our platform. And because it's so cheap, and because it's so inexpensive at that Walmart level at an average of $3.5 , you're really not going to make a dent in your budget for your subscription model. So we love partnering with them, and we love continuing to grow that. And who knows, in the near future, one of them could be a strategic investor. They could be a buyer of the company. We're kind of right in that space to be able to fit in with any one of our competitors, and we have great relationships across the board.
One of the things that's been talked about a lot today here is potential for a recession. Given the increased exposure to advertising over the last few years, how do you think about recession risk for the business? If one happens, how should we think about exposure?
Well, we're seeing some very troublesome times in sponsorship and advertising. And really, we're winning because we're adding so many new podcasts and so many new original programming. So we're winning, but definitely, CPAs and CPMs are going to struggle. It's going to get worse in my humble opinion. And it's also going to get better because there's going to be a lot of fallout from it and a lot of opportunities. There's going to be a lot of opportunities to acquire more creators and there's going to be a lot of opportunities for those creators to come to our platform, knowing that we give them that full 360 service, but it's going to be a tough market, and you get out to battle through. And the exciting part is, our sponsorship, which, pre-COVID, we were at 98% subscription. We're now 50-50, right? We had 7 sponsors on our platform, we now have 600, okay? As we go public with PodcastOne and public with Slack or on their own, you can be sure there's going to be dynamics there of both external as well as internal growth engines, right, that are going to be explosive to it because we wouldn't take those public unless there were chess moves that made sense.
One of the other things that's caught a lot of attention is AI. How do you think AI impacts the music business? How do you think it impacts your business?
So we've talked a little bit about our publishing business. Josh Colbert just took over as President of our Publishing business. He came out of Rock Nation, ran their publishing and owns pieces of every song from peaches on down. We saw a technology play that I think is so dynamic and so unique, again, focused on creators first. So when you know what beats or sounds are for a song, right? There are beats and sounds that you can go to these platforms, and you buy those beats and sounds and they're royalty free. We found a platform of a young man, 26 years old, absolute superstar, and we acquired his company. And we dynamically moved this company by putting our entire tech team behind it. And we're literally growing on a daily basis, adding sounds and beats of song. So we own pieces of songs from everyone from Post Malone to Drake, you can almost name it across the board. And what's happening now is by using AI, we use our tech team to start with ChatGPT, although I use Bard today, and it's amazing. I don't know if anyone used it, right? There's amazing things there. So I'll give you an example. We had someone come to us and said, I want the beats from the drummer of the Chili Peppers. Could you find me music that sounds just like this? And with ChatGPT, in conjunction with Dramafy, we were able to bound 13,000 sounds that fits in with it, and you'll be reading a lot about this because we just announced 40,000 songs we own a piece of. Those numbers are going to grow to hundreds of thousands over the next 2 years. So I'm really excited about AI. I think, is really unique usage for it. And for our business, it's explosive. We've always used AI in Slacker Radio. Part of the beauty of the technology in our 45 patents is they've used AI which they've now expanded with the newest forms AI in conjunction with human behavior and human decision-making, those hosts or anchors choosing the music, that if one of you was listening to Rock in Rio , you listen to software rock and another list of hard rock your radio station when you go into a Tesla car or you go on our app is going to be very different even though you're on the exact same app.
You mentioned Dramafy. You also have Split Mind. Had, I guess, -- how do you -- how are you unable to invest in and/or operate with these platforms, whereas I'm sure folks like Spotify and others would love to go deeper into publishing, but are restricted. How does that work on your side?
I mean, it's impossible for them to be nimble like us, right? They're going to buy us one day or are they going to buy someone a size, right? I think even in podcasting, everyone's got their learning curve. There was some great moves here, but they paid enormous amounts of money to get into the space, right? We're never going to do that. When I bought PodcastOne, I bought it at 1x revenues. When I bought Slacker Radio, I bought it at 1x revenues. They both had a hair on them just like Digital Turbine, and they both had fortunes of money spent in building those technologies, but they can't be nimble like us and they can't do the things that we're doing. So they're going to smartly wait, and there'll be a next round of podcast buying just like there's going to be a next round of audio buying, but they're going to wait for that to develop and be big enough for them. And they're so massive in size that right now is just a great opportunity for us with VC money with private equity money shrinking dramatically, this is the opportunity for us to really grow those and be able to really do some chess moves that we have been able to do in the last 2.5 years.
We talked about some of the separations, or separate listings that you're doing. You tossed out numbers, I think, $3 a share for PodcastOne, $2 a share for Slacker Radio. With the company trading under $2 a share today, what do we think investors are missing?
Well, I think you got the perfect storm, right? Starting with -- when you lose the Russell 2000, you lose 16 million shares of buying, so you lose your index buying, right? Then you lose -- after you lose your index buying, the shorts to come with that. Then you get, with the shorts that come with, you get algorithms that come with it, right? Then you get tax selling, then you get panic selling. And then you got just a disastrous, literally terrible market for anything under $1 billion today and especially in media and technology. It'll change. It will change. That Warren Buffet for anyone that watched it. The Warren Buffett video, I think, he is so genius. I think I've been telling the story for -- I feel like I've been telling it for 38 years in my life as CEO or LOGI shareholder in public companies, the stock market is like a guy at a bar drinking, right? The first couple of drinks, he has falling down he's slipping, then all of a sudden, it hits the right drink and everything turns fun and happy and the market turns fun and when it does he gets rich. It's going to happen soon. I don't know if it's 3 months, I don't know if it's 6 months. Somewhere in the next 2 years, we're going to have another great market rally, right? You're going to get a market rally for the small caps, and not just for 7 stocks and everything else kind of sit where it is. And I'm excited for it. This is where you make all your money. This is the way you make you 10 or 30x. Digital Turbine when it went down to $0.40, it was as brutal as you get. I had $40 million of debt. We had to battle through a lot of different things to get there. We turn the business, we focus the business, we focus the energy and it went to $12 billion. I think we had the same thing here.
Great. And I see we've got just about a minute left, so to cram as much as I can into that last minute. The ecosystem has changed a lot over the last 3 to 5 years. COVID impact and everything else that goes with it. How do you think the ecosystem evolves over the next 3 to 5 years? Where do you shake out and all of that?
I think right now, you have the first time in our lifetime, the content is king. And historically, distribution is King kong. Right now, content is king and content is king kong. And content is enormously expensive. $2.5 million per hour is up 50% and in the last 3 years and almost 100% over the last 10 years. It's becoming unaffordable for all these platforms. One of the reasons I went into this space is, as difficult as music is, music might cost per content is under $20,000 an hour. I think we're uniquely positioned right now to really be able to explode this business. And we're growing the fastest we've ever grown, right? We grew 60,000 subscribers last month. We're growing -- we grew 600,000 subscribers. And when you think about that number, 600,000 subscribers, right, our competitors spend $80 a sub to get those subscribers. That's $50 million. We spent 0 money. We're going to build off the back of B2B deals. You're going to see more and more of them coming. I just announced a big television deal with OTT Networks to put our content across 47 million TVs. I announced Samsung TV. I think it was -- I think it was 400 million TVs, I forget the numbers anymore, they're so staggering. We're going to get a little piece of those, right? We're going to continue to grow in my humble opinion is every platform with 10 million to 2.5 billion eyeballs, right, from social to media, to cable, to satellite, to Internet companies across the board must have life and must have music. This is a unique opportunity for us, and we look forward to you guys seeing more and more B2B deals to help grow our business and grow our subscribers, our sponsors. And of course, that just turns into revenues and bottom line.
Awesome. Thanks, Rob.
Thanks as always.
Yes, I got it.
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