Loop Media (NYSE American: LPTV) is already a leader in delivering best-in-class digital out-of-home (DOOH) TV and digital signage platform providers for business clients. And that position has been strengthened. Last week, LPTV announced a strategic partnership with Pypestream, the leading self-service automation platform with an all-in-one cloud messaging and conversational AI that brings the power of Artificial Intelligence to Loop Media's curated entertainment business venue experience.
That alliance is expected to allow a fast-growing LPTV to enter hyper-growth mode. Keep in mind the power inherent to its Pypestream relationship adds to LPTV's already impressive market presence, where it provides over 2 billion video views every month at restaurants, retail businesses, office buildings, doctor's offices, airports, bars, and college campuses. This strategic alliance streamlines that content, utilizing AI-generated information to ensure the right content plays at the right time for the right audience in each location.
In other words, unlike competing plug-and-play platforms, LPTV is now able to leverage the abilities of machine learning to understand business processes, allowing it to identify the most logical content recommendations based on demographic, operator preference, venue style, and business type, among other data. It's a differentiation that's that fuels a significant competitive advantage.
Loop Media And Pypestream Combine Expertise
Foremost, the combination of product of services expertise provides venue partners the unique ability to offer a better and more targeted customer experience, an objective that is always a vital part of the LPTV mission. And by partnering with Pypestream to deliver a better customer experience for its fast-growing screen footprint, expectations are for the combined inherent strengths of both platforms to fuel faster market penetration and adoption of the LPTV platform. That's more than likely; it's probable. Why?
Because the combination of LPTV and Pypestream services takes digital content provider services to the next level by offering high-impact and highly immersive customer experiences fueled and supported by the enormous value contributions from AI that transform how businesses engage and empower their end users. Remember, too, the reach is considerable. The collaboration already empowers nearly every type of business venue – bars, restaurants, retail, doctors' offices, college campuses, etc. – to harness the power of AI, allowing each venue to curate their ideal entertainment experience. Moreover, the enhanced working relationship is a seamless integration, noting that LPTV's partnership with Pypestream began in 2022, designed to deliver support automation for Loop Media's new and existing customers.
Showing their ability to harvest the power inherent to their respective platforms, the collaboration has evolved into developing a product tool doing more than driving user growth and retention; it's culminated in the development of the newly released "Channel Recommender," delivered via the Loop Media Player's digital assistant/chatbot. The relationship isn't only excellent news for LPTV and Pypestream; investors are also likely to benefit. In fact, that's proving to be the case.
LPTV Rally Hats Are On
Shares on Friday were trading over 14% higher at press time. However, despite the gains, shares appear appreciably undervalued considering that LPTV's growth pace is shifting into a higher gear, evidenced by expanding product and service placements proving that LPTV product adoption is increasing. That's expected. (*share price $3.09, Yahoo! Finance, 06/09/23, 02:04 PM EST)
Loop Media's services, especially accounting for its comparative differences, are more than advantages; they are value drivers. And there are plenty of them, including allowing its users to stream over 200 free music videos, news, sports, and entertainment channels through its Loop TV service. That package makes LPTV the leading company in the U.S. licensed to stream music videos to businesses through its proprietary Loop Player. And they are not sitting idle on that achievement.
Instead, Loop is harnessing and using the power inherent to that position, facilitating LPTV digital video content 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, opening the door to potentially millions more viewers and expanding market reach and brand awareness. That could translate to LPTV besting its impressive growth in 2022 with potentially exponential growth this year.
That's not an overly optimistic proposition considering that Loop is fueled by one of the industry's largest video, music videos, movie trailers, and live performance content libraries. As important, LPTV's broad content catalog caters to many genres and moods, with an impressive array of movie trailers, sports highlights, lifestyle and travel videos, and viral videos targeting and reaching exclusive demographics. But the better 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. Investors, as noted, are taking an interest.
They should. With income rising from advertising, sponsorships, integrated marketing, branded content, and subscriptions, the valuation gap between intrinsic, inherent potential, and share price may cause the window of value opportunity to close sooner than later.
A Value Proposition Supported By The Numbers
Remember, LPTV's growth is no coincidence; it's part of their mission to deliver streaming TV to businesses that engage the opportunity to inform, entertain, and best serve their customers. But LPTV has selfish interests, too; they want to make money and increase shareholder value by enabling advertisers to reach consumers in an out-of-home environment in a measurable and targeted way. Here's another thing to consider: LPTV didn't create the market; they are seizing unique opportunities within it.
Disney (NYSE: DIS), Netflix, Inc. (NASDAQ: NFLX), and ROKU (NASDAQ: ROKU) have already blazed the trail. But often the case, becoming industry behemoths can have its drawbacks. Specifically, those companies become less business agile, making it hard to redirect courses to meet fast-changing demands. While a potentially difficult situation for them, it serves up extraordinary marketing opportunities for developing companies that are agile enough to exploit under-served niche market opportunities. LPTV is taking advantage.
Focused 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 number being 5.4X the number of players than the last year, they have facilitated LTPV devices to generate over two BILLION video impressions monthly. That massive number matters since advertisers focus on impressions when evaluating ROI. It also matters from where those impressions originate, and Loop is checking the right boxes in that respect.
As mentioned above, Loop content is made available in bars, restaurants, automotive centers, and fitness centers, to name a few. Of course, those placements generated more than billions of video impressions. It also facilitated LPTV scoring over $30 million in 2022 revenues. The more excellent news- that number is expected to grow significantly in 2023. In fact, 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. More good news from a company and investor's perspective; momentum is at its back.
Loop Media Is A Disruptor; That's A Good Thing
That's also 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. Here's more excellent news about LPTV- 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, which the cable companies thought could never happen, expect the streaming providers' share to grow even more. Millions of viewers are just now recognizing the ease of "cutting the cord" as a new generation of television and computer technology shows 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 utilizing massive loss-leader promotions to keep 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 reasons for them to take advantage of opportunities sooner. In fact, revenues from digital ad spending are surging, with current digital DOOH and OOH advertising spending estimated at $10.3 billion and $42.1 billion, respectively. Those are the recent numbers. In 2024, the ad spend 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.
Being Different Is An Important Advantage
Loop checks that box, too, by serving up one of, if not the most, differentiated services 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.
For Loop, it 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. And with a strategy to stay focused on the high-traffic point-of-sale centers like convenience stores, grocery stores, and other specialty retailers, noting that those locations allow for higher frequency ad placement with significantly less dwell time, income from those placements is expected to strengthen revenue-generating momentum.
And keep in mind that when appraising the intrinsic and inherent value of LPTV, they work 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 LPYV 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 diversified content library.
Calculating the sum of its parts, Loop Media presents a product and services package comparable to the industry behemoths. Thus, while a share price disconnect may suggest otherwise, it may be best to consider the gap an opportunity instead of an appropriate representation of how fast LPTV is growing and the potential near-term catalysts in its crosshairs. With management having blue chip experience at leading media brands such as Disney, EA, and Instagram in local and international markets, scoring those could happen faster than many expect.
If so, current share prices may be a springboard, not a platform.
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