Investing Deep Dive: The High-Potential US Stock Targeting India's Tech Hungry 1.4 Billion People 💪
QYOU Media Inc. is a dynamic company operating at the forefront of the entertainment industry, with a focus on India and the United States. Here's why you should consider investing...
Deep Dive Focus: QYOU Media
We continue our Investing Deep Dive series with a US Stock targeting India's tech-hungry 1.4 billion population, QYOU Media (TSXV: QYOU) (OTC: QYOUF).
QYOU Media works with some of the coolest and most popular creators, bringing rising stars to prominence.
In India, through its The Q India brand, QYOU has launched six channels across broadcast and video-on-demand platforms. Here, its influencer-led content reaches more than 125 million households. Meanwhile, its influencer marketing campaigns are spearheaded by Chtrbox, its in-house expert in connecting brands with just the right online content creators.
Also, in India, QYOU Media has edged into the gaming space. QYOU’s acquisition of Maxamtech gives it reach in the direct-to-consumer mobile gaming market. This is a means to help advertisers reach the rapidly expanding audience of Indian mobile gamers. QYOU is also building out its Maxamtech gaming business and the Q GamesMela app. New capabilities have already been added to the app, seeing the company branch out into the real-money-gaming space.
Meanwhile, in the United States, QYOU, an OTC stock, specializes in developing and overseeing influencer marketing campaigns for prominent film studios, game publishers, and brands. Here, QYOU Media produces content geared towards millennials and Gen Z, reaching over one billion global consumers each month.
The company’s management team has vast experience in the US entertainment business, with company founders being industry experts from Lionsgate, MTV, Disney, and Sony. This has helped bring some of these exciting campaigns to QYOU’s door.
QYOU Media Price Target & Analyst Rating
QYOU Media recently received a positive analyst rating from Atrium Research, with the initial price target of $0.15 due to strong financial momentum with nine consecutive quarters of year-over-year growth. Atrium Research attributes its expectations to “the significant growth to QYOU’s repeatable content strategy utilizing localization and “best of” content, in addition to industry tailwinds across social media in its key markets.” Atrium expects QYOU to achieve positive EBITDA by the fourth quarter of 2024, leveraging its strategic shift toward boosting profitability.
QYOU Media shows strong financial momentum with eight consecutive quarters of year-over-year growth, boasting a 33% compound annual growth rate (CAGR). Atrium Research expects QYOU to achieve positive EBITDA by the fourth quarter of 2024, leveraging its strategic shift toward boosting profitability. A rising creator economy and widespread social media adoption in India provide QYOU with additional growth momentum. Moreover, it currently trades at a considerable discount compared to its peers, with a multiple of 0.7 times estimated 2024 sales.
Why You Should Consider Investing
Young India: A Prospering Sector - India's youthful population is surging, along with tech adoption and investment in the country. This is a demographic transformation QYOU aims to capitalize on. Increased financial power creates a real-world desire for higher living standards, cutting-edge technologies, and fast-paced entertainment. QYOU is an active market participant offering creative and relevant solutions to an audience that is both engaged and growing.
Rapid Growth - Rapid Growth isn't just a buzzword for QYOU, it's a reality as the company sees impressive revenue growth and increasing audience reach, particularly in the Indian market. India's youthful dynamism, a majority of its 1.3 billion population, offers fertile ground for QYOU's expansion. As it tightens its hold on this promising market, the company positions itself as a frontrunner in capturing the attention and wallets of this young, vibrant populace.
Multi-Faceted - QYOU stands out with its multi-faceted approach to business. Influencers continuously generate high-quality content, and social media marketing strategies drive constant growth. This comes at a time when the Influencer Marketing industry itself is experiencing a surge. In 2016, influencer marketing was worth $1.7 billion, and by 2022, it grew to $16.4 billion. It's expected to reach $21.1 billion in 2023. Such growth cements the sector's importance for advertisers and brands looking to make an impact.
Building a Brand - The company is building a brand that is synonymous with cool for young Indian consumers. QYOU sets itself apart from competitors through its ambitious vision. Instead of solely focusing on excelling in influencer marketing or broadcasting, the company aspires to establish a brand recognized for offering the best quality and most popular social content for the young Indian audience.
The Right People - QYOU boasts a leadership team that's a unique blend of top-tier entertainment insiders and savvy investors. Among the skilled professionals steering the company are veterans from high-profile firms across various sectors. These include Lionsgate, CinemaNow, Engagement Labs, Symbility Solutions, Star India, Zee Network, Viacom, and Sony Pictures Television Worldwide Networks, plus newer, disruptive platforms such as Musical.ly (now TikTok), ByteDance, Triller, and Helo. This diverse mix of leadership ensures that QYOU is well-positioned to navigate both traditional entertainment landscapes and emerging digital frontiers.
Real Money Gaming Transformation - QYOU is making strategic moves into the mobile gaming sector to expand its advertising capabilities. The company sees a unique opportunity to enter the market from a G-commerce perspective. This move aligns well with the current technology landscape in India, where mobile and real money gaming are experiencing a surge in popularity. Players are increasingly drawn to games that offer the freedom to earn or buy virtual assets, enhancing their overall experience. QYOU aims to capitalize on this trend with its foray into real money gaming.
About QYOU Media
Small-cap stock QYOU Media (OTC: QYOUF) (TSXV: QYOU) is building an ecosystem of content, creators and creativity. The company works with social media stars and online content creators in the United States and India. QYOU has multiple facets that are distinct but also strategically aligned.
The core purpose of QYOU is to provide a dynamic entertainment platform to a young and growing Indian audience. Media buyers purchase ad space on this platform, allowing them to directly target this high-potential audience.
Think of it as a digital evolution of the classic TV advertising model. Traditionally, a Pepsi ad might air during an NFL game, capturing millions of eyeballs. Today, brands pivot toward digital platforms, investing heavily to reach viewers who have migrated away from outdated forms of content consumption.
This strategy proves especially lucrative in India, home to the world's largest youth population. Additionally, QYOU Media boasts that it reaches 1 billion global consumers every month, such is the reach of its entertainment platforms. With rising economic and educational prospects, this makes the country a hotbed for digital engagement.
QYOU also operates in the United States producing content targeting millennials and Gen Z. Here it focuses on creating and managing influencer marketing campaigns for notable film studios, game publishers, and brands.
Small-cap stocks like QYOU Media capture the imagination and enthusiasm of investors because growth potential and room for expansion is vast. Better still, the lower prices of small caps make them accessible to individual investors.
USP/Competitive Advantage
QYOU Media's synergy between its entertainment channels and influencer marketing business makes it unique. These two facets of the business complement each other seamlessly.
For example, online influencers have a wealth of pre-existing content that can quickly and cheaply be curated into shows for The Q India’s broadcast and Video on Demand (VOD) channels. In turn, these programs create clips for influencers to share on social media and increase popularity. Essentially, both sides feed each other a constant stream of quality content.
Another notable way QYOU stands above competitors is the scope of the company’s ambition. The company doesn’t just aim to be successful at influencer marketing or broadcasting but to build a brand synonymous with the best and most popular social content for young Indians.
This means expanding into mobile gaming makes sense. It’s another entertainment industry segment hugely popular with India’s massive young population. Better still, mobile gaming presents an additional way for QYOU to increase the scope of an operation that allows brands to advertise to hundreds of millions of potential customers. With its acquisition of Maxamtech, QYOU Media embraces rewarded play, catering to the growing Indian mobile gaming audience.
Small-cap or micro-cap stocks offer retail investors growth potential, value opportunities, accessibility, and the possibility of high returns, making them a popular choice for those looking to diversify their portfolio and seek out growth.
To find small-cap stocks to buy, investors often consider the TSX Venture Exchange, or the OTC market and QYOU can be found on both.
Key Products
To fully grasp the effectiveness of QYOU Media’s unique business model, let’s look at its individual components.
The Q India
The Q India is QYOU Media’s Indian content brand. It includes six channels across CTV, FAST and VOD platforms. These channels are:
The Q: This is the company's premier Hindi channel, ranked as India's fastest-growing TV channel in 2021.
The Q Marathi: This channel broadcasts in Marathi and aims to reach a potential audience of 85 million native speakers.
Q Kahaniyan: Available on smart TVs and VOD apps, this digital channel focuses on animated content.
Q Comedistaan: Targeted at mobile and smart TV users, this digital channel specializes exclusively in comedy content.
Q GameX: This digital gaming channel is designed to engage the vast gaming community in India.
Sadhguru TV: Global spiritual master Sadhguru presents this Connected TV channel focusing exclusively on spiritual and well-being content.
Additional channels are also in the works such as Bollywood Hungama - Powered By The Q. This new channel, covering Bollywood movies, music, and entertainment, will leverage the combined power of both QYOU and Bollywood Hungama in the social media world. Bollywood Hungama is India’s Premiere Bollywood and Music Entertainment destination, with over 70 million users.
Bollywood Hungama - Powered By The Q will be exclusively available on the Q Play+ app along with leading Connected TV platforms including Samsung TV Plus, Amazon Fire TV, Xiaomi, TCL, One Plus and other Connected TV (CTV) brands.
Chtrbox
While The Q India produces television material featuring social media celebrities, QYOU’s in-house Chtrbox platform collaborates with a wide range of online influencers to make a significant impact in marketing.
Chtrbox stands as India's premier platform and agency for influencer marketing, linking brands with social media personalities to craft compelling narratives.
The platform has a lot to offer, boasting an extensive network of more than 300,000 influencers, including top-tier celebrities, digital stars, and niche figures like mom bloggers and campus creators.
Much like The Q India, Chtrbox has also partnered with leading brands such as Amazon, HP, and Olay, significantly enhancing QYOU’s influencer marketing reach in India.
Chtrbox hit a record milestone in October 2023, with its largest revenue month since inception booking total revenue of over 7 Crore or $1,150,000. This impressive revenue growth was driven by a combination of larger individual campaign budgets, overall business growth and enhanced social media engagement throughout the Diwali holiday period in India.
Chtrbox has run award-winning campaigns with notable brands like National Geographic India. A recent collaboration included IndiGo Airlines for the captivating #nofilterbyIndiGo campaign. Chtrbox led an exclusive and influential social media blitz via its leading squad of influencers.
On another occasion Chtrbox orchestrated Warner Music India and Flipkart Fashion's inaugural college campus ambassador initiative, engaging students from various Indian colleges. The program not only built a robust student community to boost awareness for Flipkart's new GenZ collection, SPOYL, but also generated organic content that Warner Music India used to promote its music.
Publications such as Social Nation Now and Instagram featured clients from ChtrRepresent, including Ruchika Lohiya.
More recently, Punjab's Honourable Chief Minister Bhagwant Mann invited travel creator Jinali Sutariya (@travelstoriesbyus) to the inaugural Punjab Tourism Summit in Mohali. The invitation aimed to leverage her skills in capturing and promoting the state's travel offerings.
Furthermore, Campaign India, a trusted source for news, analysis, and insights related to the advertising and marketing industry in India, featured Darshil Shah, the founder of ChtrSocial, in its publication.
Gaming
QYOU’s Maxamtech, through its proprietary platform Gaming 360, operates various gaming destinations for notable companies like Vodafone and Glance. This 2023 acquisition aligns with QYOU Media and The Q India's strategy to expand their portfolio of direct-to-consumer products.
One of QYOU’s direct-to-consumer brands is Q GamesMela, an entertainment and social interaction hub. Q GamesMela offers social and viral content, virtual currency, skill-based games, competitions, and the ability to connect with friends and family for content creation and tournaments.
Vi Games, powered by the Games360 platform, is tailored for Vodafone Idea customers, providing engaging social tournaments and games with daily prizes. It offers one-on-one battles, tournaments, and the opportunity to play with friends, along with special weekly and seasonal tournaments.
Games360 is Maxamtech's flagship product, designed to empower large businesses by offering comprehensive gaming solutions across various domains. This platform facilitates a wide range of gaming experiences, including real-money gaming, skill-based gaming, fantasy gaming, esports, competitions, and user-generated social gaming, catering to a user base of over a million individuals.
This illustrates QYOU’s involvement in the gaming industry and its platform to build upon its offerings to businesses and consumers.
US Influencer Marketing
While QYOU Media primarily targets the Indian market, it also operates a thriving influencer marketing business in the United States. In this region, QYOU USA has executed innovative marketing campaigns for several top-ranking films from big studios, blockbuster video game releases, and a significant car brand.
It doesn't just boost box office numbers but also ignites meaningful cultural dialogues. With a focus on brand engagement across social platforms, QYOU USA provides an arsenal of services to make a splash.
The company has gained recognition for spearheading marketing initiatives for some major players in the entertainment industry. Recent achievements include:
QYOU USA was delighted to recently partner with Microsoft-owned Activision Blizzard Inc. to launch Call of Duty: Modern Warfare III (MW3) via an imaginative campaign titled ‘The Lobby.’
For the latest Call of Duty game launch, QYOU orchestrated a unique and innovative creator-driven campaign, casting a top social creator squad to drive engagement.
The collaboration between QYOU, its team of five social creators and Call of Duty resulted in a significant social media impact. The promotion generated over 10 posts that collectively amassed nearly 10 million views and 480,000 engagements.
This campaign also achieved an impressive 5.3% engagement rate (ER) on TikTok, doubling the platform's benchmark and indicating a highly successful social media drive.
In a record-breaking post for Mission: Impossible Dead Reckoning it achieved over 140 million views.
It collaborated with Capcom, a leader in game development, to market Resident Evil Village on TikTok. This campaign raked in an impressive 63 million organic views.
Another campaign for the Golden Globe-nominated animated film The Croods: New Age attracted 140 million organic video views.
Marketing efforts for DreamWorks' Trolls World Tour led to 67 million organic video views and 10 million interactions, contributing to an influx of over 350,000 new followers for the movie's YouTube channel.
Its QYOU USA influencer partners were honored and named in the Forbes Top Creators list of 2023. These influencers include Michael Le - 51.8M Followers; Adam Waheed - 19.3M Followers; Addison Rae - 88.4M Followers; Bella Poarch - 92.9M Followers; Brent Rivera - 47.2M Followers; and Alan Chikin Chow - 13.3M Followers.
The business also includes QYOU Studios in the United States, an inventive production arm designed to give brands and marketing allies a suite of social media promotion services.
It has also expanded its internal development of both machine learning (ML) and AI technology to drive more effective and operationally efficient campaigns.
With top-level professionals boasting experience at leading companies like Lionsgate, MTV, Disney, and Sony, QYOU’s US enterprise is positioned to secure more deals for promoting prominent entertainment series. Some of these leaders, such as Glenn Ginsburg, Andrew Fox and AJ Feuerma, have all recently been honored with public speaking engagements and a multitude of podcast appearances as influencer marketing experts.
Business Model
QYOU creates, delivers and captures value through its multiple products and revenue streams. Capitalizing on India's massive youth population and its increasing digital engagement, QYOU aims to offer a dynamic advertising platform for the up-and-coming young Indian audience. Thereby ushering media buyers to target this audience directly in a digital evolution of the traditional TV advertising model.
Producing content for these channels is cost-effective, straightforward, and engaging for the audience. This is mainly due to the use of pre-existing material from online influencers. This material is then reassembled and carefully selected to create TV shows for QYOU’s channels. The process is similar to how MTV once organized music videos into playlists.
The outcome is hit shows that draw a significant number of young people in India, establishing The Q India as a go-to platform for marketers. Indeed, the channel has successfully engaged major brands such as Coca-Cola, Amazon, Nestle, Unilever, Pepsi, and Procter & Gamble, among others.
Furthermore, Artificial Intelligence (AI) is transforming the CTV industry by enhancing content accessibility and personalization. AI-powered engines suggest content based on individual preferences, while Automatic Content Recognition (ACR) identifies current viewing and offers related content or advertisements.
This rise in AI and ACR positions the CTV industry to lead in TV viewership and ad revenue growth. Early players in this sector are poised to benefit greatly. That’s why QYOU continues to build key channel partnerships that establish a dominant portfolio of Smart TV channels under the Q brand.
Besides offering ad placements and sponsor opportunities on its channel, The Q India also allows advertisers to initiate influencer marketing strategies through its extensive roster of social media personalities via its Chtrbx platform.
The Q brand is reaching more than 125 million households in India with its programming content. The Q operates as a linear TV channel and VOD provider, offering popular digital content created by social media stars and prominent digital video creators. Its primary audience is young people in India. In fact, its flagship The Q Hindi broadcast channel stands out as one of the fastest-growing television channels in India.
Additionally, QYOU Media boasts that it reaches 1 billion global consumers every month, such is the reach of its entertainment platforms.
The market opportunity for QYOU’s target demographic of young Indians is enormous, with around two-thirds of the nation’s 1.4 billion people under age 35. Additionally, smartphone, smart TV and social media usage are all on the rise in India.
Furthermore, there are no competitors currently following a business model similar to QYOU, nor any that provide the same level of exposure to the "Indian opportunity" while being publicly listed on North American exchanges.
Plenty More Ahead
Influencer marketing has become a booming business that QYOU is capitalizing on. QYOU’s focus on content, community, and commerce aligns perfectly with the young and dynamic content creators they engage with across platforms like YouTube, TikTok, and Instagram.
This synergy fuels QYOU Media's optimism about its market position. The company not only collaborates with top-tier brands but also delivers the large, engaged audiences these brands seek. Both QYOU USA and Chtrbox are more poised for business and financial growth than ever before.
QYOU is intent on brand development and building a durable and enduring company with people at its heart.
QYOU is also building out its Maxamtech gaming business and the Q GamesMela app. New capabilities have already been added to the app, seeing the company branch out into the real money-gaming space. Expect more evolution from this exciting corner of QYOU.
Investors are excitedly watching for QYOU Media's shift into direct-to-consumer models, influencer marketing, mobile gaming, and the growth of its brand identity.
Financials
QYOU Media just reported its Q3 FY 2023 results:
Records 10th Consecutive Quarterly YOY Revenue Growth: For the three months ended September 30, 2023 revenue was $7,279,874 marking the 10th consecutive quarter of YOY revenue growth.
Adjusted EBITDA*: For the three months ended September 30, 2023, the Adjusted EBITDA loss increased by 29% compared to the prior quarter ended September 30, 2022 to $910,507 driven primarily by the decrease in US revenue attributable to the actors and writers strike in Q3 2023 combined with larger investment into growth initiatives in the direct to consumer gaming business.
Improved Net Loss: Net Loss for the three months ended September 30, 2023, decreased and improved by $193,311 or 9%.
Cash Balance: The Company concluded the period ended September 30, 2023 with cash of $1,701,522 as compared to September 30, 2022 cash of $3,077,769.
QYOU Media looks forward to further expansion, especially in the mobile casual gaming sector, as it moves into 2024.
Sector Background
Proliferation of Devices
With smartphones, tablets, and smart TVs becoming more affordable and accessible, they have quickly superseded traditional media.
Insights from Counterpoint Research state that “Smart TV penetration of overall shipments reached its highest ever share of 93% during the quarter. The penetration is expected to go up further due to more launches in the sub-INR 20,000 ($250) price range.”
This shift allows people to consume content on their own terms, fueling a rising demand for tailored content such as short-form videos.
User Behavior
Changing user behavior has led to diverse consumption patterns.
Gen Z and Millennials strongly favor short, captivating video content. This audience often looks for videos that are both informative and entertaining, ideal for quick consumption during short breaks or while on the move.
This leads Over-the-Top (OTT) platforms such as Netflix, Hulu, and Amazon Prime to incorporate more short-form content into their libraries. They realize the potential of such content in retaining subscribers and reducing churn rates.
Meanwhile, some cable providers now offer hybrid services, combining traditional broadcasting with internet-based streaming, giving subscribers access to curated short-form content alongside regular channels.
The fast-paced nature of what’s trending means content curators need to continuously update their libraries to remain relevant. This is where QYOU’s affiliation with a range of ambitious influencers presents a considerable asset and opportunity for virality.
Content Monetization
Programmatic Advertising
The automated buying and selling of digital advertising has revolutionized ad placements in short-form videos. By analyzing user behavior, programmatic platforms can deliver more targeted ads, ensuring higher engagement and better ROI for advertisers.
Subscription Models
Many platforms curating short-form videos opt for a freemium model, where basic content is free, but a subscription fee is charged for premium, ad-free, or exclusive content.
Subscription Video on Demand (SVOD) and Premium Video on Demand (PVOD) are two such content distribution models. While SVOD offers a library of content for a set price, PVOD focuses on delivering specific, high-demand content at a premium. PVOD is a model where viewers can rent or purchase movies shortly after their theatrical release or even while they're still in theaters. Both models aim to cater to the evolving needs and preferences of today's audience.
QYOU USA’s client base includes SVOD and PVOD customers.
Gaming Outlook
The surge in smartphone use and the introduction of free-to-play games have broadened the gaming landscape in India, drawing in a mix of players. This includes older individuals enjoying casual free-to-play games, and younger enthusiasts getting into competitive mobile gaming.
In 2022, India’s gaming segment, particularly social/casual gaming, secured $1.4 billion in revenue, forming 80.3% of India's entire gaming and Esports income. Looking forward, the trajectory for this segment looks promising. Projections indicate a CAGR of 22.5% to $3.8 billion by 2027.
The Indian government's unexpected decision to charge a 28% tax on online gaming surprised the industry. However, for QYOU it spells an opportunity. Unlike legacy real money gaming companies burdened with backdated tax liabilities, QYOU arrives as a fresh face with a clean slate, fully prepared to navigate the financial landscape without any historical tax issues to contend with.
Additionally, its Q GamesMela platform has the advantage of being new and designed around a customer acquisition and retention model that can remain profitable in the face of these new tax issues. Gaming is huge business in India, and with the majority of gaming being done via mobile rather than PC or console, this perfectly suits QYOU’s plans.
India vs. China
The potential for growth in India's financial landscape has been compared to China's prior to the pandemic, and there are various factors and indicators that suggest India might experience significant financial growth, possibly mirroring China's meteoric rise over the past two decades.
India is poised to overtake China as the most populous country by 2024. This demographic advantage could lead to an increase in both the labor pool and overall consumer demand for goods and services over the coming decades.
Resilience of Indian retail investment sector
In a recent interview, Indian investor, N. Jayakumar of Prime Securities notes the resilience of Indian retail investors amidst market volatility. This shift correlates with India's economic growth and increased savings, with retail investors, affluent individuals, and family offices driving market trends.
Jayakumar highlights the untapped potential in the media sector.
The transition towards app and phone usage over traditional television reflects a pivotal shift in India's media sector, which currently appears underinvested and overlooked. However, this sector holds promise for substantial profitability as media companies in the country embrace tech advancements.
These developments could lead to a re-rating in company valuations, showcasing a brighter outlook for the sector. Overall sentiment remains positive, propelled by India's economic growth and a rise in savings. This buoyant economic backdrop further underscores the potential for the media sector to thrive during its present digital transformation.
Investment Summary
QYOU strongly believes India's financial landscape will mirror China's meteoric rise over the past two decades. Ample evidence from public markets backs this conviction. Therefore, the firm's current positioning in India strategically positions it to capitalize on this impending growth.
Foremost is the growth of India’s youth. This should elevate workforce and consumer demand, potentially lowering retirement funding requirements and facilitating increased investments in infrastructure and education as the population seeks improved living standards.
QYOU’s impressive growth in revenue and audience exposure proves the company has established itself in the region. Moving ahead, it intends to compound this hold by expanding its reach through various mediums.
Between growing its CTV channels, leveraging influencers to generate unique shareable content, and ramping up activity in the gaming market, there is plenty to keep advertisers excited to partner with QYOU.
The company’s multi-faceted approach creates an enticing array of options for media buyers to pursue.
Steering it toward future growth and impact is an accomplished team of entertainment industry veterans and investors. They intend to ensure QYOU stands out by aiming to become a renowned brand for delivering high-quality, popular social content to Indian youth.
There’s no doubt QYOU’s leadership team anticipates significant opportunities in India's future and is positioning to seize them effectively.
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