LiveXLive Media, Inc. (LIVX) Q1 2022 Earnings Call Transcript

LiveXLive Media, Inc. (LIVX 8.05%)
Q1 2022 Earnings Call
Aug 12, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the LiveXLive Media, Inc., Q1 fiscal 2022 financial results and business update conference call. All participants will be in a listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Mike Quartieri, executive vice president and chief financial officer. Please go ahead.

Mike Quartieri -- Executive Vice President and Chief Financial Officer

Thank you, Danielle. Good afternoon, and welcome to LiveXLive Media's business update and financial results conference call for the company's first quarter ended June 30, 2021. Presenting on today's call are Rob Ellin, CEO and chairman; Dermot McCormack, president; and myself, Michael Quartieri, the company's chief financial officer. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties.

These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth of the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements, including those described in its annual report on Form 10-K for the year ended March 31, 2021, and subsequent SEC filings. You will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its Investor Relations website at ir.livexlive.com.

And the company encourages you to periodically visit its IR website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, August 12. And except as required by law, the company does not undertake any obligation to update or revise this information after the date of this call. I'd like to highlight to investors that this call is being recorded.

The company is making it available to investors and the media via webcast, and a replay will be available on its website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of the company, and any redistribution, retransmission, or rebroadcast of the call or the webcast in any form without the company's expressed written consent is strictly prohibited. Now let me turn the call over to LiveXLive's CEO, Rob Ellin.

Rob Ellin -- Chief Executive Officer and Chairman

Thank you, Mike. Good afternoon, everyone, and thank you for joining us today for our fiscal 2022 first-quarter business update. We continue to focus on the long-term objective of building and owning sustainable, valuable franchises, IP, and transformative technologies. Three years ago, we took the company public, doing $7 million in revenues.

I'm proud to say my team has delivered for the 13th straight quarter record revenues of $38.8 million, by far the biggest quarter in history. Amazingly, we now have six TAMs, each with multibillion-dollar upsides. They're all growing together a perfect storm. We are building a brand recognition and using music subscription, live events, live streams, OTT, merchandise, both digital and hard, and podcast to drive our flywheel.

Today, LiveXLive has grown and involved into the leading talent-first platform focused on their super fans. Almost $39 million in revenues with none of our live events other than social ones. We've had to push back our main Event Spring Awakening via COVID to October, as well as our 40 to 50 live events, and we're seeing telltale signs that this is starting to open up. As we are getting close to the end of COVID and the opening of live events, we were able to use our first live event to prove our flywheel.

Our first in-person and global live streaming pay-per-view event post-COVID-19, Social Gloves, Battle of the Platforms, cemented our flywheel is a true zeitgeist of modern media fan interaction: listen, watch, attend, engage and transact. Social Gloves reached over 3.5 billion engagements and continues to grow by the day. LiveXLive social media platforms garnered a triple-digit year-over-year increase, with total engagement over 671% and average engagements post up 1,493%. Social Gloves and Landmark 136,000 pay-per-views.

That's equivalent to selling out Madison Square Garden six times. This is a tremendous feat for a first-time event. This is an addition to the thousands of fans who are in attendance at Hard Rock Stadium. In addition, Social Gloves drove a staggering 9,300 new paid subscribers for the night, which represents a conversion rate of nearly 7% that bodes very well for us as live events return.

We are very proud of the phenomenal music lineup, featuring some of the biggest names in hip-hop, Latto; DJ Khaled, Fat Joe, Migos, and Little Baby. Music is in our DNA, bringing together these explosive performers with pop culture stars, showcase live is the trailblazer in producing and creating this new form of entertainment, connecting sports, music, social media, as well as NFTs. Proving our model, showcase from selling merchandise at the stadium, packaging NFTs, pay-per-view live streaming, having our podcasting talent at the event and bringing our key franchises to life, LiveXLive Presents, LiveZone, Music Lives, and Self Made, it's all about us leveraging events to build long-term franchises. Partnerships grew with two year -- two multiyear, multimillion-dollar deals with Hard Rock International and NFT leader, Cybertino.

The strategic partnership with Hard Rock International will provide us with the new platform to bring exclusive and original live pop culture events. Together we can amplify and distribute these via pay-per-view events to select and integrated resorts and Hard Rock Cafes properties nationwide. The new alliance will directly tap into LiveXLive's flywheel business, again, listen, watch, attend, engage and transact now with a global partner as Hard Rock. Our wholly owned subsidiary, PodcastOne, had over 2.38 billion podcast downloads in the trailing 12 months period ending June 30.

And its franchise of exclusive shows has grown to more than 235, with 35 new podcasts, now productions, more than 300 podcast episodes per week. Through a series of acquisitions, both buy and build, we have created and improved our flywheel of wholly owned businesses that work together in a complementary and synergistic fashion. In subscription radio, we have our Slacker Radio, live streaming, LiveXLive through an incredibly robust plus platform, LiveXLive events with React entertainment, podcasting with PodcastOne, merchandise through custom personalized solutions, and a growing roster of original content franchise that is distributed through LiveXLive's 24-hour OTT channel that now reaches a proud, 294 million people. As we described in our audience, listen, watch, attend, engage and transact.

I'm pleased to report the first quarter ended June 30, '21, revenue increased 69% to a record $38.8 million, our consecutive quarter of record revenues, 13th consecutive, along with 175% increase in contribution margin, which is a record $7.8 million. Given the momentum we see in nearly all of our business verticals, we're excited to increase our previous revenue guidance for the current fiscal year, March 31, to between $115 million and $125 million. An increase of $5 million from a prior guidance with adjusted operating income with our operations segment to between $6 million and $12 million. As of June 30, 2021, our cash and cash equivalents were the highest in the history of the company at $24.7 million.

Over the past 12 months, we have derisked the business by diversifying our revenue streams with the launch of pay-per-view, the addition of substantial advertising-sponsored revenue component as a result of acquisition of PodcastOne and the acquisition of e-commerce company, CPS, and our acquisition in the early '20s of a live music event business React Presents. In fact, the past year, we have successfully diversified our revenue streams and reduced our concentration of subscription from 84% revenue to just 23% of our revenue this quarter. We recently announced one of the most iconic live music events Spring Awakening Music Festival, which is the Midwest largest all-electronic music festival is scheduled to return in Chicago, October 2nd and 3rd. The festival features 70-plus artists across the unique stages.

The event has already officially sold out in the first years of its general admission and its VIP and only limited quantities of Tier 2 tickets is still available. We will expand the Spring Awakening franchises to four events this year. LiveXLive Reacts Presents return to live events currently includes a fully stacked lineup of over 100-plus live shows featuring over 200 artists performing over the fiscal -- in the course of fiscal 2022. Through our distribution and partnerships, including our nine-year partnership with Tesla cars, we are able to grow our paid subscribers to 1.196 million, just under 1.2 million active monthly users.

The acquisition of PodcastOne in July continues to be meaningful and accretive for LiveXLive. PodcastOne was ramped up as an IP development and production, with its recent partnership with award-winning top creators such as Patrick Wachsberger, led Picture Perfect Federation, the producers of some of the biggest movies in the world; Dylan Howard's Empire Media Group; Barbara Schroeder, Melissa McCarty, Kelly McClear. PodcastOne continues to broaden its platform offerings for scripted and nonscripted content across multi genres with an eye to a package, resulting audio IP for television, film, and streaming platforms. PodcastOne's entire network of podcast programming is one of the most exclusive streaming selections of podcasts being made available for the first time via the Facebook app in the United States.

Additionally, we are planning to bring our podcast into the realm of live events, which celebrated social influencers and PodcastOne's talent Jordyn Jones. Since launching our pay-per-view platform in May 2020, LiveXLive has now generated $21 million in pay-per-view, sponsorship merch sales. LiveXLive has produced over 100 pay-per-view events and its recent announced K-Pop's Joy Ruckus Club 4, the largest global Asian music festival, establishing LiveXLive as a premier destination for K-Pop. LiveXLive pay-per-views continue to drive new revenues sharing models for both artists and LiveXLive digital ticket sales, fan tipping, digital meet and greets, merchandise sales, NFTs, sponsorships, enabling artists to go directly to consumers using LiveXLive's platform.

In our last call, I spoke about our significant investment and commitment to original programming content. I would now like to introduce my partner and president of the company, Dermot McCormack, to provide a few more details on our original programming efforts.

Dermot McCormack -- President

Thank you, Rob, and I'd like to thank you for your continued leadership and congratulate the team on what has been a stellar quarter. I would say that this quarter really brought home the vision of why I joined LiveXLive. We enhanced our flywheel and we brought it to life with groundbreaking live events. We're building a portfolio of brands that all complement each other with synergies and originals.

Not unlike what I saw in the early days of managing Viacom's digital portfolio, we are on a path to become a true media conglomerate, built for the realities and the opportunities that exist in today's ever-changing landscape. One of the things I'm most excited about is the evolution of our original content IP and production capabilities. We are doubling down on our own proprietary events and franchises. Specifically, in this quarter, we invested $15.5 million in developing and implementing new IP and content, which drove revenues in the current quarter and will contribute to future revenues.

Over the past year, we have launched shows that we believe have the chance to become valuable franchises going forward, including Self Made, a new online talent competition. And earlier this month, we launched a Self Made Podcast Edition, an audio competition to find the next big podcast star for PodcastOne. The competition will be driven by fans and PodcastOne's panel of judges, as they listen to see who will take the top prize, a podcasting contract with PodcastOne, and a total package worth over $100,000, including promotion across the network. We have also launched The Lockdown Awards, our celebration of live music.

And coming this fall, we have a new addition called the Breakout Awards. We have also brought to the world, Snubby's, a tongue-in-cheek look at the artist, actors, and nominees who got snubbed at award shows, from the Grammys to the Oscars hosted by the roast master himself, Jeffrey Ross. We continue to grow our digital festival, Music Lives, with two iterations in the last 18 months and another installment coming in September Live from Las Vegas. Our live music series, Music Lives On and LiveXLive Presents, continue to expand and have been a really big hit with advertisers.

We are one of the few companies during COVID that broadcast and produced everything from a live music concert in an artist's basement to game-changing sports and music mega event at an NFL stadium. In my experience and in my career, it is rare in a media company that you get to advent a new format. But we really feel the social music and boxing event we produced in Miami last quarter was a watershed moment credibly. Everyone took notice.

We brought together influencers, music, sports in a way, not seen before. And we feel we have set the stage to continue to lead the way in how this type of entertainment evolves. We have already announced the female version of the new format called Self Made Knockout, a pay-per-view event that will feature a boxing fight care headlined by women from social media, music, sports, technology, and fashion with the winners buying for over $1 million in prices. We expect to be announcing a date and location for this event soon, which we believe will be in the fourth quarter of the current calendar year.

We have been excited to see how these tentpole pay-per-view events supercharge our flywheel, from digital and physical ticket sales to sponsorship to subscriptions and merchandise sales. Stay tuned for more of these unique hybrid events to be added in the coming weeks and months. Of significant importance is the exclusive partnership we have with Tesla. Through that arrangement, a LiveXLive subscription is preinstalled as the default radio service in every new Tesla car sold in America, and LiveXLive is paid directly by Tesla for those subscriptions.

A LiveXLive app is also preinstalled in 85 other automobiles, as well as across major carriers, Verizon, Sprint, and T-Mobile, which allows Slacker subscribers to listen in their cars and on their mobile devices. We have previously mentioned that we see a significant opportunity to expand LiveXLive Slacker radio subscription business into Europe and compete for the opportunity to become the default radio service for a number of European automakers. Our licensing dialogue with the music labels continues, and we hope to have some news on that front before the end of the year. And finally, tied to this unique and ownable original content, we are extremely happy to see the combination of our advertising and sales force to close more $1 million deals than at any other time in our history as RFPs continue to grow in size.

I would now like to hand it over to our CFO, Mike Quartieri, who will review our Q1 results. 

Mike Quartieri -- Executive Vice President and Chief Financial Officer

Thanks, Dermot. Let me spend a few minutes to provide a brief overview of our fiscal '22 Q1 results. Consolidated revenue was a record $38.8 million, up 269% year over year from $10.5 million in the Q1 prior year. This increase in revenue is due to our successful acquisitions of PodcastOne and CPS, coupled with increases in pay-per-view and sponsorship revenue related to the Social Gloves pay-per-view event, as well as our revenue associated with the production of the event.

We ended Q1 with 1,162,000 paid subscribers. Please note that included in the total number as of June 30, there are certain subscribers, which are subject to a contractual dispute, of which we are currently not recognizing revenue. This is the first quarter since the dispute arose in Q2 last year that our subscription revenue is up on a year-over-year basis. The acquisitions of PodcastOne and CPS were accretive to our operating results, enhanced our working capital position, and provided diversification to our revenue base.

In Q1, our revenue was comprised of 23% subscription and 77% advertising sponsorship merchandising pay-per-view ticketing and events, compared to 84% subscription and 16% in sponsorship licensing, advertising, and pay-per-view tickets over prior year. Contribution margin in the quarter was a record $7.8 million, up 175% year over year from $2.8 million. The year-over-year improvement was driven by our live events and related sponsorship revenue and the additions of PodcastOne and CPS, which resulted in a $5.7 million increase year over year. This improvement was partially offset by a $700,000 charge for additional music royalties as a result of a multi-year audit by one of the labels.

Adjusted operating loss in Q1 was $1.75 million, compared to $55,000 in prior year. Note, the prior-year quarter includes the benefit of various cost-saving measures, totaling $1.3 million that were implemented by the company during the height of the COVID-19 pandemic, which were not in effect during this quarter. Adjusted operating income for our operations segment was $1.2 million, essentially flat year over year as the benefit of the increased revenue from our live events and related sponsorship revenue was offset by the charge noted above, related to the multiyear music royalty audit, adjusted operating losses related to CPS due to the seasonal nature of their business, and the investments in content and marketing within PodcastOne and our live streaming business units, which totaled $2.2 million in the quarter. Adjusted operating loss for corporate was $2.9 million, an increase of $1.7 million, which is primarily attributable to the prior year's austerity measures, higher personnel and other public company costs given the expansion of the company's operations on a year-over-year basis, and payroll taxes related to stock-based compensation.

Even though we've passed the one-year anniversary of PodcastOne acquisition and the six-month anniversary of the CPS acquisition, we continue to look for areas of efficiencies and consolidation. Back in March, we announced the completion of our integrations of PodcastOne, CPS, and React, which we expected to generate over $3.4 million in annual savings. We have just implemented a series of additional measures that are expected to generate an additional $2.2 million in annual savings, bringing the total annual savings up to $5.6 million, of which approximately $800,000 has been realized prior to June 30 with the remainder to flow through in future periods. Turning to the balance sheet.

We ended Q1 with cash of $24.7 million, including restricted cash of $135,000, up from the $18.8 million we had a year ago. The year-over-year increase was largely driven by net cash proceeds from financing activities of $6.2 million and $800 million -- or sorry, $800,000 from net cash inflows from operations, offset by investing activities of approximately $1.1 million during the quarter. Our net working capital deficit improved by $3.6 million during the quarter, which was the result of the forgiveness of $2.5 million of PPV loans received in the prior year, and continued efforts to improve working capital efficiency of the remaining $1.1 million. Our cash position as of August 11 was $18.6 million.

Lastly, in June, we entered into a revolving line of credit facility with East West Bank with a borrowing capacity of up to $7 million, and an interest rate of prime plus 0.5%. In connection with this credit facility, the holders of the company's senior secured convertible notes agreed to extend the maturity date of their notes and subordinate their security interest in all the company's assets. And with that, let me hand it back over to Rob.

Rob Ellin -- Chief Executive Officer and Chairman

Yes. So, thank you guys obviously, a terrific quarter, but one more to come. And really, the excitement that Dermot was articulating with the record labels, we extended our contracts with Sony Records. Our balance sheet now and the strength that it is and the labels, it's now time to expand globally.

It's now time to expand to other car companies. We're now in over 80 cars, and it's time to do more white label-type deals like Tesla. So, it's a really exciting time for the company. We're looking forward to our live events really starting to take off in October.

You're going to see, as I said, over 100 live events. It's really a special time for us as we lost substantial revenues for almost 18 months now, as we come back to adding that live music. So, I want to thank everyone. I want to thank everyone for being supportive and sticking with this company through COVID.

And I'm really proud of my team and my management, and really have gone all the way down the line of what they've accomplished and what they've built. And I think we've gone from a $7 million company to now doing $38 million in the quarter is really exciting. So, thank you, everyone. Thank you, everyone.

I look forward to questions.

Questions & Answers:

Operator

We will now begin the question-and-answer session. [Operator instructions] The first question comes from Barry Sine of Spartan Capital Securities. Please go ahead.

Barry Sine -- Spartan Capital Securities -- Analyst

Hey, good afternoon, gentlemen, and congratulations. Question on Social Gloves. So presumably, that drove the big surge in a lot of the big surge in revenue that we saw. If you could give us a little bit more breakdown on how that revenue occurred? And then, I guess, we'll see some of this in the Q later on, but what are the costs are that go with an event like that? And the reason I ask, you've just reiterated that you have the fall event, I guess, it'll be called Self Made Knockout.

And then you also have Spring Awakening Equinox. If we look at Social Gloves, we analyze that, what you just reported, would those upcoming events be comparable? Are we looking at two more major events coming later on in the fiscal year that would be similar to what you just reported?

Rob Ellin -- Chief Executive Officer and Chairman

Yes. So, Spring Awakening has always been the React's trophy property, right. And it does anywhere from $6 million to $10 million in revenues. And we've just expanded it and brought back into the city of Chicago, right? So I fully expect it there.

And then, we've already announced the second one. So the second one will be a female version of Social Gloves. And so far, we've seen the traction is absolutely spectacular. Very similar reaction, if not stronger reaction to the audience and the potential buyers of this.

And then fully expect there are going to be many more social events like this, right? And boxing is only one component of it. What we built here is, right, we built here is we built the franchise. And as we go out now, we'll actually own the IP, and this will be IP of LiveXLive. So, we couldn't be more excited about it, and we expect it to be extremely profitable.

And a lot of the hard work was done in the first event.

Barry Sine -- Spartan Capital Securities -- Analyst

And if you could help us understand, looking at the consolidated numbers, how much of that was driven by Social Gloves? How -- what's the profitability in event like that? And again, the reason I ask is, so I can have some basis to forecast the upcoming events that you have.

Rob Ellin -- Chief Executive Officer and Chairman

Yeah. So, we're not breaking down the exact numbers, but I would say that you can kind of deduct right? And Mike, if you want to jump in here, we said there's 136,000 tickets. Assume it's around $50 a ticket, right, add some sponsorship, add some money from Hard Rock, and you can basically come to very close to the numbers. And really start thinking about the success of this event, like the success of where the IP is going forward, right? And how much of that hard work was done already in building the first one because the production came out absolutely spectacular.

And so we're really excited for the next one. Do you want to add anything to that, Mike?

Mike Quartieri -- Executive Vice President and Chief Financial Officer

Yeah. I think one other thing just to kind of point on the -- especially like just one you wanted to get back to the profitability of it. And we wanted to make sure we're very careful of not commenting on any specific items. But one of the things we wanted to make sure that was very important to this is that it proved out the capabilities of our team and of our tech stack.

So, when Rob says this thing went off flawlessly, if you can imagine, 136,000 tickets being sold, the vast majority -- and I mean the very vast majority of those, all took place probably within the last eight hours before that event took place, with a good portion of that taking place within the last couple of hours. So, the fact that we were able to handle that volume flawlessly is a testament to the team and also to the investment that we made in that tech stack as part of this event. And so, therefore, I think it's a little unfair to comment on profitability on this one item when we were using it to really prove out the capabilities of the team and the process itself.

Barry Sine -- Spartan Capital Securities -- Analyst

OK. And I guess there'll be a little more visibility when the Q comes out, you'll do a little breakout there as well. 

Mike Quartieri -- Executive Vice President and Chief Financial Officer

There'll be some, yes.

Barry Sine -- Spartan Capital Securities -- Analyst

OK. All right. That's my question. I don't want to hug the call.

Thank you.

Operator

The next question comes from Brian Kinstlinger from Alliance Global Partners. Please go ahead.

Brian Kinstlinger -- Alliance Global Partners -- Analyst

Great. Thanks so much. And clearly, the revenue is fantastic with social gloves, and I agree it was groundbreaking. But I guess given the low gross margin and the adjusted EBITDA loss, which I don't think I would have expected with $38 million of revenue, what are the lessons learned that you can take away so that you become profitable when these events happen in the future and you put up these high watermark revenue numbers? And what did drive that gross margin to be maybe lower than it looks like the Street would have thought?

Rob Ellin -- Chief Executive Officer and Chairman

Mike, you want to take that? 

Mike Quartieri -- Executive Vice President and Chief Financial Officer

Yeah. Well, let me kind of talk through kind of -- and maybe what I'll do is I'll talk a bit on a year-over-year basis and maybe look at it also quarter sequential, from just a consolidated overall operating income perspective. So, for the year, you know, just when we look back at this quarter, you know, we overcame a couple of things. So one, you have the addition of CPS and PodcastOne.

The combination of those results are about $1 million in negative operating loss. And that's really kind of geared toward the seasonal nature of their business, with the -- plus the investments that we've been making, as we've commented before, about $2.2 million in content and marketing on top of that to really drive the back half of the year and into the future into fiscal '23 when it comes to those units. CPS, especially given it's a retailer, there's a huge seasonal impact to their results. And so you expect operating loss in what would be this Q1 and Q2 with a huge profit margin to come through in Q3, which is the calendar year-end, which is the holiday sales period.

In addition, we have the royalty audit, which hit us for about $700,000, which was completely unexpected. And we had to come over the year over year $1.3 million in austerity measures that we implemented last year, which was really primarily around 50% pay cuts taken by all employees, and those 50% pay cuts weren't in effect during this quarter. So, there is some headwind versus year over year. And then we picked up some -- just as a result of the way the operations are from the CPS and PodcastOne perspective.

But if you look at that, that really kind of gets you back to what would have been, in my eyes, and I don't want to do pro formas and math for a whole lot of people to get in myself with an FD Reg issue. But you could get back to a more reasonable same-store model, which would give you profitability well north of $3-plus million.

Brian Kinstlinger -- Alliance Global Partners -- Analyst

OK. And then my only follow-up is the 2.2 million in content and marketing spend. It sounds like those are expenses that ran through the P&L in the first quarter. Are those recurring and you'll have 2-million plus of quarterly increased expenses from maybe what you would have thought at the beginning of the year? Just how did that play out? Thank you.

Mike Quartieri -- Executive Vice President and Chief Financial Officer

I would tell you that, that's a slight increase, quarter sequential. In Q1, we had about $1.2 million of those expenses. And remember, and this is no different than any other media company at this point in time, Viacom, if you listen to their earnings, same similar story with Comcast. The world's starting to reopen back up and people are investing back in content, and that's what we want to make sure that we're there in front line to be able to maintain the growth of this company accordingly.

And I think that's part of the reason for the -- around the whole content strategy is why we wanted to make sure that Dermot joined this call. So Dermot, the person who's responsible for all of our content, was able to give his perspectives on it. 

Dermot McCormack -- President

And Mike, let me just jump in on the question or the question here, which is, you know, from a background of, you know, working in places like the DMAs and huge tentpoles in corporations that drive year-round business. When you do an inaugural event, especially when no one in the world has ever done before, nobody's ever even attempted this on a level. It's done a lot. And you asked what did we learn? We learned is the production efficiencies in marketing, we will apply next.

And why we lead the way now because we're the first ones to do those learnings. So, this was a lot about learnings, and we're going to apply them in key areas as we go forward.

Brian Kinstlinger -- Alliance Global Partners -- Analyst

Great. Thanks so much.

Operator

[Operator instructions] The next question comes from Jeremy Lu of D.A. Davidson. Please go ahead.

Unknown speaker

Thanks for taking my question. So, I have one question and one follow-up. First question, from your vantage point, what percentage of festivals are expected to return to having a live event in 2021 and 2022 versus 2019?

Rob Ellin -- Chief Executive Officer and Chairman

I mean, we can't. We can't -- you know, it's a very tricky question. Obviously, the variant is kicking back in, right, and scary. AG just came out with today, that you must be vaccinated to go in.

But the exciting part is in the United States is half the country has been vaccinated and this could be way higher soon, right? So I don't think they're going to shut them down. I think very few are going to get shut down. I think they're just going to put, implement rules in place that is going to protect people and make it a safer environment. And so, we don't see a lot of telltale signs.

In fact, we're on the phone with the leading government people on Chicago, and they have no intentions of shutting the current events down in Chicago. And as you know, Lollapalooza just happened, which is the biggest event in Chicago. So we're pretty excited about it. There are going to be some costs that occur with COVID.

And as you know, we pushed Spring Awakening into October. So. you're going to have to be smart about it, and you're going to have to handle it in a unique way. But I couldn't tell you exactly what percentage, I don't think many in the United States are going to get shutdowns. 

Unknown speaker

OK. Thanks. And then, Rob, you were early in understanding that consumers would rebundle their content rather than limit themselves to one to three SVOD services. So, what are the implications of this rebundling for LiveXLive?

Rob Ellin -- Chief Executive Officer and Chairman

Well, as you know, we hired JPMorgan as our banker to explore all options for the company. There's been a lot of people circling around, right? We have a lot of interesting TAMs within this company. You have six of them that any one of them could be a potential candidate to be -- to acquire the whole business. One of the divisions to spin out a division, right? So, I think we're right in the center of the storm.

I think my team has just done a brilliant job of surviving and building right to where live is coming back, and I just think live is going to really enhance that -- the flywheel and give us the opportunity to prove. Just like sports did 30 years ago, it's really not that we're that smart. We just started this early and built it -- and built it around curation, right? When you build around curation and if you got -- everyone had an opportunity to watch what we did at Social Gloves and watch what we've done at Rock in Rio for years, it's the best production in the world, right? And when you're doing that, everybody in content is looking for content. Our average cost per content is still under $20,000 an hour, right, at that cost per hour.

We're a really compelling partner as a -- to distribute our content. As you can see by our new Facebook deals, right, two of them, one Facebook to stream all of our pay-per-view events. Number two, for Facebook to take on our podcast as they build their audio platform. You saw us announce our podcast across Samsung.

And we're going to keep growing that 294 million number, right, to many platforms around the globe.

Unknown speaker

Great. Thanks for taking my questions.

Rob Ellin -- Chief Executive Officer and Chairman

Thank you.

Operator

Seeing that there are no further questions, I would like to turn the conference back over to Rob Ellin, CEO, and Chairman, for closing remarks. 

Rob Ellin -- Chief Executive Officer and Chairman

Thank you, everyone. Just as a closing remark, my history, when I started out one.com, as you broke $100 million in revenues, you started to get very different institutional holdings, you've got a lot of interest around the company. We didn't plan to sell it at that time, and we sold it to Barry Diller at Active Corp. The same thing with Digital Turbine when you break $100 million in revenues.

It's now trading at close to $8 billion valuation. We feel the same thing here. The momentum is growing. We have a world-class team.

We have a world-class management team. We have a world-class board, our professionals that have built tens of billions of dollars in companies. This is the most exciting company that I've ever been involved in. It's also the most fun company I've been involved in.

I have great partners, the great team here. Anyone saw yesterday, Kris Wright, who joined our board, he was just named the head of all of Michael Jordan brands at Nike. We're going to keep bringing great people together. We're going to keep focused on talent first, superfans.

If we continue to grow that, right, in five years, we'll be at 10 million-plus subscribers and we'll have $1 billion-plus in revenue. So thank you, everyone, and thank you for spending the time, and I appreciate everyone's support.

Operator

[Operator signoff]

Duration: 44 minutes

Call participants:

Mike Quartieri -- Executive Vice President and Chief Financial Officer

Rob Ellin -- Chief Executive Officer and Chairman

Dermot McCormack -- President

Barry Sine -- Spartan Capital Securities -- Analyst

Brian Kinstlinger -- Alliance Global Partners -- Analyst

Unknown speaker

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