Well, if you want to know, digging through those piles of videos does take time. And what I found is quite complicated.
- FCC sponsorship. I haven't seen any video with their name on it or any advertisement from them. If anyone can direct me, I'd be very happy to see it. I don't think it exists as such. Other forms of sponsorship maybe.
- Videos : I think I remember a poster saying that, in Australia, BIG goes into a neighborhood and films all businesses there at once. The businesses then decide whether they want to take up a subscription or not. The spreadsheet attached confirms that. BIG sales team probably follows up to try to sell, upsell, etc.
From my very short research of just a few days of videos, different categories emerge :
- Businesses with very few views on BIG youtube channel (<150) but nothing on their own online websites / social media pages {probably not YET paid for}
- Businesses with very few views on BIG youtube channel (<150) but with many views on social media pages (>3000)
- Businesses with many views both on BIG youtube channel (>800) connected with their website / social media pages
- Business that are repeat customers with many views all round.
The last 3 categories are probably videos paid for.
There are also other categories (corporate, NFP, TV shows...) not included here but this is the bread and butter of BIG for now.
If you look distinctively at videos outside Australia I think you'll notice that the pattern of filming without charging in the first place doesn't apply. It seems most of overseas customers pay for those videos, which is consistent with what we've been told. The spreadsheet is too limited to see this but if you look at videos on the YouTube channel that are a month old you'll find a number of views consistent with use by the businesses for promotion.
It is quite obvious that BIG growth has been staged in Australia. But it is really difficult to know exactly how many businesses are actually paying given that there are so many ways for them to use the videos. Some videos on BIG channel get thousands of views but are nowhere to be found on websites, FB, Instagrams, so they must use other medias.
The Finstro financing deal is just adding to the complexity of this.
BIG's strategy has been to push very hard very fast to be the first to cover as many businesses as possible. I believe they want to replicate that strategy in the US (given what they said in the latest announcement regarding the US) but the current turmoil might get in the way.
IMO, two questions remain :
- Is BIG really getting millions of dollars of revenue from its customers or from a finance company that has a GSA on its assets. If it is from FCC, can it be profitable without it ?
- Can the US part of the business grow fast without shady financing schemes like in Australia.
BIG executives obviously have a BIG goal and they have executed their strategy with surgical precision. But corporate governance is the one thing that might get in their way.
If you think about it : Uber is trying to cover as many cities as possible in a minimum of time. They have seen hyperbolic growth, but ended up with a $4,5 billion loss for 2017. Because they're not listed, they don't face the same constraints that BIG does. BIG's aim isn't to make a profit in Australia. It's way bigger than that. To get there, it seems they are taking some dangerous shortcuts.
Now before you start shooting at me @Murphyslore : I am just a novice investor so my research is probably filled with mistakes, gaps and misinterpretations. So no need for insults. Just tell me where to look. I'm here to learn. Painfully so.
Thanks.
BIG Price at posting:
$2.22 Sentiment: Hold Disclosure: Held
