If Loop Media (NYSE American: LPTV) hasn’t been on your radar yet, it should be - and for excellent reasons. Foremost is that Loop Media is one of the sector's fastest-growing digital out-of-home (DOOH) TV and digital signage platforms. The company is focused on a select niche market opportunity by optimizing its product arsenal to attack potentially massive revenue-generating opportunities from business clientele. The differences they provide offer several advantages over competing service providers, including allowing its users to stream over 200 free music videos, news, sports, and entertainment channels through its Loop TV service. That's more than a differentiation; it's made LPTV the leading company in the U.S. licensed to stream music videos to businesses through its proprietary Loop Player.
Loop is certainly leveraging the power inherent to that position. LPTV digital video content is already reaching millions of viewers in DOOH locations, including bars/restaurants, office buildings, retail businesses, college campuses, airports, and on free ad-supported TV platforms like Roku. That's not all. Content is even being provided at local gas stations on GSTV terminals in the United States, which will expand market reach and brand awareness by opening the door to potentially millions more viewers. In other words, while LPTV is growing at hyper speed, the coming months could shift them into warp.
That's not an overly optimistic presumption, considering that Loop is fueled by one of the largest content libraries of its kind, offering video clips, music videos, movie trailers, and live performances. Critical to its wide range of business clients, LPTV's broad content catalog caters to many genres and moods, with an impressive array of movie trailers, sports highlights, lifestyle/travel videos, and viral clips targeting and reaching exclusive demographics. However, the best news about Loop Media is that its streaming services do more than provide compelling in-demand content; as a publicly-traded NYSE-American company, they also present a compelling investment proposition.
And with income from advertising, sponsorships, integrated marketing, branded content, and subscriptions, current share prices may expose a disconnect worth seizing. After all, revenue growth, which is expected, typically causes share price trajectory to steepen.
Loop is Quickly Expanding its Market Reach
Growth is no coincidence; it's part of LPTV's mission to deliver streaming TV to businesses and unlock the potential for them to inform, entertain, and engage with their customers. In doing so, LPTV generates revenues by enabling advertisers to reach consumers in an out-of-home environment in a measurable and targeted way. Keep in mind that LPTV hasn't created the market; instead, they are seizing unique opportunities within it. Disney (NYSE: DIS), Netflix, Inc. (NASDAQ: NFLX), and ROKU (NASDAQ: ROKU) have already blazed the trail, but as is often the case, becoming industry behemoths can have its drawbacks. Specifically, those companies become less business agile, which can be bad news for them but excellent for developing companies that are still agile enough to exploit low-hanging market opportunities. That's a box LPTV checks.
Focusing where others aren't, Loop has expanded its national distribution and reach across multiple end markets across North America, targeting largely untapped markets through its current 56,000~ Active Loop Players and partner screens. In addition to that figure being 5.4X the number of players than the last year, the expansion has allowed LPTV devices to generate over two billion video impressions monthly. That massive number matters since advertisers focus on impressions when evaluating ROI. However, the total count isn’t the only value driver in this case, as it also matters from where those impressions originate. Fortunately, Loop is checking the right boxes there, too.
Loop content is made available in bars, restaurants, automotive centers, and fitness centers, to name a few. In fact, all told, its players and screens reach into many high viewership sectors that have facilitated over $30 million in 2022 revenues. 2023 is expected to be even better. Comparative Q2 revenues in 2023 were 11% higher than last year and, notably, scored an impressive gross margin of 29.4%. That's better than most peer performances. Better yet, momentum is still at its back.
Disrupting the Traditional Streaming Media Landscape
That, too, is no coincidence. It results from LPTV establishing its place as a premium provider of licensed and low-to-no-cost original content from over 165 music label partnerships channels, 40+ non-music content channel partnerships, and 5 original content channels that use licensed or purchased content that is reformatted into short-form content suitable for commercial use. The more excellent news about LPTV is that they are timely to the market opportunities.
As part of the disruptive genre, LPTV is capitalizing on a massive shift in how consumers view content. In 2011, 98% of media was provided through traditional cable-style networks. Fast forward to 2023; only about 28% of the content is watched through those sources. While a staggering shift that cable companies thought could never happen, expect the streaming providers' share to continue growing appreciably higher. Millions of viewers are just now recognizing the ease of "cutting the cord" as a new generation of television and computer technology has shown how unnecessary pay-to-play content is. Those thinking that industry giants ATT (NYSE: T), Comcast (NASDAQ: CMCSA), and DISH (NASDAQ: DISH) aren't concerned about the shift, think again. They are scrambling to find ways to keep subscribers, sometimes resorting to massive loss-leading promotions to maintain their counts.
But they aren't wearing blinders, either. They recognize opportunities to consolidate with smaller companies, like LPTV, that are gaining share. In other words, smaller streaming content providers can certainly be in the acquisition crosshairs of the industry's current mega players. There are certainly reasons for them to take advantage of opportunities sooner than later. In fact, revenues from digital ad spending are surging, with current DOOH and OOH advertising spending estimated at $10.3 billion and $42.1 billion, respectively. While those are the most recent numbers, ad spending in 2024 is expected to explode to $144 billion for digital retail media, pushed higher by a 23% CAGR through next year.
That's the biggest reason why being different and better matters.
Loop's Differences are Advantages
Loop’s strength lies in its distinct advantages over competing services. In fact, it offers one of, if not the most, differentiated offerings of curated short-form content for OOH venues. That's meaningful to viewers and to outlets, brands, and advertisers. To meet all expectations, Loop utilizes its proprietary media distribution platform to deliver its broad content library to satisfy each party in the value model.
Loop earns the most value from its expanding partner platform, accelerating its revenue-generating reach into advertising sales services to third-party platforms with an existing network of screens for quick distribution. Loop retains a percentage of advertising revenue from those digital ad sales. Combined with a strategy focused on high-traffic point-of-sale centers like convenience stores, grocery stores, and other specialty retailers, which allow for higher frequency ad placement with significantly less dwell time, income from those placements is expected to strengthen revenue-generating momentum.
When appraising the intrinsic value of LPTV, keep in mind that the company works with all parts of the advertising chain, including the largest DSP/SSP programmatic partners and the majority of Fortune 200 ad-buying companies that already use the LPTV platform. The business earned from those industry giants results from LPTV's differentiated features, especially those related to its focus on end-to-end technology solutions, programmatic expertise, original content creation & curation, open API compatibility, and a diversified content library.
Exploiting its Niche Market Potential
Undoubtedly, numbers show that Loop Media is executing its strategy as intended. Still, while 2022 and the start of 2023 performances have been impressive, the pace of delivering excellent results could accelerate in the back half of this year. That would also be no coincidence.
Instead, meeting its own aggressive schedule for growth is intentional, driven by increasing distribution in desirable markets, targeting new customer types by adding additional niche content, and optimizing advertising sales and sponsorships by improving audience targeting, data, and analytics capabilities. Factoring in its plans for accelerated international expansion to address underserved DOOH markets, LPTV has created a recipe for immediate and long-term success.
And with seasoned management having blue chip experience at leading media brands such as Disney, EA, and Instagram in local and international markets, they are likely to deliver as intended faster than many expect. Frankly, few, if any, are arguing against LPTV becoming a larger company in 2023. In fact, as a disruptor in a multi-billion dollar sector and having the products and expertise to maximize its opportunities, many investors are subscribing to the bullish thesis.
Based on what Loop Media is telling the markets, supported by published performance, backing that case is well-justified.
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