Cinedigm Corp. (NASDAQ:CIDM) Q3 2019 Earnings Conference Call - Final Transcript

Good day, ladies and gentlemen and welcome to the Cinedigm Corporation Fiscal 2019 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, today's program is being recorded.

And now I would like to introduce your host for today's program, Jill Calcaterra, Executive Vice President. Please go ahead.

Good afternoon and thank you for joining us today for our third quarter fiscal 2019 earnings conference call. Participating in today's call are Cinedigm's Chairman and Chief Executive Officer, Chris McGurk; Chief Financial Officer, Jeffrey Edell; President of Digital Networks, Erick Opeka; and our General Counsel and Head of Cinema Equipment Business, Gary Loffredo.

Before, I hand the call over to management, please note that on this call certain information presented contains forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties and assumptions. Potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward-looking statements are described in the company's periodic reports filed with the SEC from time-to-time. All of the information discussed on this call is as of today, February 13, 2019 and Cinedigm does not intend and undertakes no duty to update future events or circumstances. In addition, certain financial information presented in this call represents non-GAAP financial measures.

And now, I would like to turn the call over to Chris McGurk.

Thanks, Jill and thanks everyone for joining us on the call today. We made significant business progress in the third quarter, which was generally in line with our expectations. In our OTT business, we achieved several significant growth milestones. As of today, our overall ad-supported footprint surpassed 2.4 million monthly active users, up 370% versus last year. In tandem with this, we saw a 212% quarter-over-quarter growth in connected TV ad requests, a big future driver of revenues for us.

We have also now grown our active subscription base to more than 109,000 users and have successfully moved that business to a low OpEx high-margin distribution business. During the quarter, we accelerated our plan to expand our OTT business into digital linear subscription in ad-supported third-party platforms. We also expanded our OTT services in distribution businesses, the areas which I will describe in detail shortly.

And as we noted last quarter, this plan allows us to leverage large scale OEM cable and telco partners to drive engagement in revenue, while at the same time minimizing marketing and operating costs. Additionally, we are leveraging our superior distribution technology and capabilities with our matchpoint platform, enabling entertainment brands and content owners' access to effectively monetize their content, while reducing time to market and at lower operating expense.

Finally, strategic M&A transactions begin in earnest with the acquisition of ComicBlitz, often referred to as the Netflix of digital comics; Viewster, a general interest ad-supported streaming service with an international footprint; and Viewster