Welcome to BBTV's fiscal first quarter 2021 conference call. I'm Nancy Glaister, General Counsel for the company.

During the course of this call, we will be providing forward-looking information and making forward-looking statements within the meaning of applicable securities laws, which are statements regarding the company's current expectations, goals and beliefs about future events. Any financial or other goals discussed are goals only, and are not meant to be taken as future-oriented financial information or guarantees of future results or performance.

All of our forward-looking statements are necessarily based on a number of assumptions and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, including the risk that our assumptions may not be accurate. Other risks are also included in our press release and MD&A issue today.

We undertake no obligation to update these forward-looking statements except as required by law. You can read more about these assumptions, risks and uncertainties in our press release and MD&A issued earlier today, as well as in our filings with Canadian Securities Regulators on SEDAR.

I now turn the call over to BBTV's Chair and Chief Executive Officer, Shahrzad Rafati.

Thank you and thank you to everyone on the line for joining us today to review our first quarter 2021 results. Joining me today is Todd Tappin, CFO of BBTV, who will review our financials and will also participate with me on the Q&A session after our prepared remarks.

My remarks will begin with an overview of the creator economy and a reminder of the opportunities that we're working to exploit; and then I will review our progress towards our KPIs. Todd will review the financials and then I will close with a general outlook prior to taking analyst questions.

BBTV is a global creator monetization company that helps creators make more money from their content. From individual to global media companies, creators rely on BBTV to generate meaningful revenue for them, while they focus on their core competency - content Creation.

BBTV helps thousands of creators around the world generate an income while entertaining and informing 600 million monthly unique viewers. Investors may ask why do creators matter?

And why is BBTV a uniquely positioned stock to generate returns from the creator economy. More than 15 million people around the world consider themselves to be content creators, and this is growing rapidly.

More than 2 million of these creators consider content creation to be their profession. And there's a massive and fast-growing economy that is building.

Let's put the 2 million into perspective. There are about 1.2 million eCommerce retailers in the U.S., fueling the CAD500 billion segment of the CAD4 trillion U.S.

retail economy by 2022, rising almost at 50% from 2018. Digital video advertising, which is just one corner of the creator economy is expected to more than double in the same timeframe to CAD82 billion and is expected to grow to CAD185 billion by 2025 at a 40% CAGR.

The creator economy as a whole is poised to rise at an even faster pace than the early days of eCommerce. This is important because the world entertainment is anyone's game now and the creators have the tools they need to create content right in their pocket and connect with their audiences authentically.

Gamers on YouTube, beauty gurus on Instagram or musicians and comedians on TikTok are seeing similar reach as major sports leagues and film studios, as digital has levelled the playing field. And the creator economy is a powerful driver for digital revenue, as Millennials and Gen Z's are driving this shift.

Advertisers trying to reach new generations are spending more in digital video, as millennials have the highest buying power amongst generations with an expected CAD15 trillion in spending by 2022. Each of the platforms in the creator economy has billions of users, and the vast majority of which are in this digital media generation who are virtually inaccessible to traditional advertising.

Creators content play a big role in viral behavior as well, as more than half of social media and video users leverage social platforms to research products and nearly 75% of them are more likely to purchase products and services based on content creators recommendations. So what happens when one part of an economy booms, such as advertising?

New revenue streams rise and flourish. That's what we're seeing in the creator economy now.

The number of creators that are making six figures or more on YouTube alone has increased by 40% year-over-year, and consumers spent CAD22 billion on mobile games in the first quarter of 2021, up 25% from Q1 2020. This is a testament to BBTV's existing revenue streams from advertising to mobile gaming apps.

At the same time, non-fungible tokens, featuring sports moments, are selling for hundreds of thousands of dollars each, and thousands of creators are making five figures or more annually through social commerce platforms. Advertising is often the first to follow consumer behavior as new technologies have time and time again changed how we consume content in the areas of print, radio, TV, and the internet.

Following advertising, just like we were seeing in the digital video space, merchandise, video games, trading cards, monthly subscriptions and more have all stemmed from these new mediums. And for the first time in history, the playing field has been levelled in the entertainment industry.

This is just the tip of the iceberg. And the two pillars of making money in the creator economy are reach and engagement.

BBTV is a global leader for both, with 600 million monthly unique viewers and over 50 billion minutes of watch time every month. We've worked with thousands of content creators and we give them tools they need to reach further and make more money.

BBTV has 500 creators making CAD100,000 or more and 100 creators making more than CAD0.5 million annually. On top of that, we have the rights and the infrastructure to simply turn on new revenue streams, from advertising and mobile games like we do today, to emerging streams like NFT's, which we announced last week.

The shift in entertainment has already happened and the money is starting to flow with BBTV at the center of it all. This is not a future economy.

This is a 2021 industry, and the ship is setting sail. BBTV is the boat that you want to be on.

And the technology plays a key role in what makes us appealing in the market, from potential M&A targets to the creators themselves. Here's a small example of how our technology, data analytics and processes work together to make creators more money.

Video titles, tags and descriptions, which seem innocuous at first are key to discovery and engagement of content. Our technology continuously analyses more than 2.5 billion video assets, learning in real time exactly which words and trends attract the most viewers.

Our tech automatically recommends these terms to the creators when they post the videos, which in turn translates to higher views and higher revenues. This is just one part of how we help creators make more money.

And it's one of the hundreds of ways we use our data and algorithms to power success for creators. As you saw last Thursday, we made our first announcement regarding NFT's and our emerging NFV strategies.

Investors should expect more announcement related to NFT's in the future, along with additional potential revenue streams, as we help creators make more money from the content they produce. For fiscal 2021, we have added two non-IFRS KPIs to our MD&A.

One of the two non-IFRS metrics that we have added is BBTV's share of revenue. BBTV operates on a revenue share model, whereby we allocate revenue to creators and we keep a portion of it.

BBTV share of revenue is a better reflection of our operations, especially as we extend revenue streams. For our Base Solutions, which is programmatic, we keep between 8% and 10%, depending on the Creator.

Our Plus Solutions are so directly targeted and configured to generate ads at the value that is more than 5x greater to advertisers compared to programmatic ads for our Base Solutions. As a result, we generate more revenue per ads and we keep the largest share of available revenue.

Advertising sales via Direct are incremental to Base Solutions ad sales. Moreover, the customers and the ad units are also different.

Base is sold programmatically, while Direct is sold on a reserved basis directly to agencies and brands. For every dollar sold on a Direct basis, gross profits for these sales are greater than 15x more profitable.

Base provides the lion's share of bottom line contribution today, and we expect it will continue to provide half or more of our contribution as both our Base and Plus Solutions grow in revenue and margin. BBTV share of revenue is a KPI that we monitor closely for operating effectiveness, and we expect to grow at a faster pace than our top line revenue.

Our second and related non-IFRS measurement is adjusted gross margin. This is simply our gross profit divided by the BBTV share.

We still anticipate the adjusted gross margin should be maintained over 90%. Fluctuations will be impacted by solution mix over time.

With respect to our operational KPIs, views grew to 115 billion for Q1, up 4% from 111 billion views in Q1 2020. RPMs or revenue per 1,000 views grew 12% to CAD0.86, up from CAD0.70 in the previous year quarter.

The views growth was lower this quarter as the year-over-year comparison is against the first quarter of COVID we saw spikes in viewership due to the global lock downs. Although views increased modestly over the last year, RPM growth was solid.

Our churn rate is low amongst creators on the BBTV platform. We continue to have views retention rates greater than 95% amongst the creator base.

This is similar to customer retention as views times RPMs equals revenue, which gives us a great line of sight to our future revenues. This split in total revenue for the quarter was 99 million for Base Solutions, and 8 million for Plus Solutions.

Performance in Base category was ahead of our expectations. And Plus performance was in line with our expectations.

Q1 2021 and 2020 had the same headcount in sales personnel across Plus Solutions. All in, both of our top line and gross margin were ahead of a consensus, as published by Bloomberg.

During the quarter, we announced some key operational development, which generates additional confidence in our outlook. First, some commercial milestones.

In January, we announced expanded solutions with both Instagram and TikTok to monetize creators across these platforms. This allows us to add more creators from those platforms and allows us to extend monetization of current BBTV creators to those platforms.

We're just starting the programs now, and we expect this to impact future quarters. We announced multiple new creator agreements during the quarter, adding nearly 715 million monthly views to the BBTV platform across multiple segments, including sports, gaming, lifestyle and entertainment.

This adds further to our scale. We highlighted renewed partnerships with Univision and Just for Laughs for an additional term, and we also renewed our NBA Playmakers partnership with the NBA.

At the end of the quarter, we continued our global expansion with our move into India and Thailand, bringing our global reach to 30 countries and 12 languages. Now, key operational milestones.

At the end of February, we announced our cross-listing on OTCQX us under the symbol BBTVF, and we acquired our DTC eligibility. We did this to fulfil demand from U.S.-based investors.

To lead a disciplined M&A strategy, in March, we hired a VP of Corp Dev, Blake Corbet, who's already immersed in actively developing and expanding target lists. We have also expanded our operations in Brazil, leading to further operational efficiencies for Plus Solutions.

Now I would like to turn over the call to our CFO, Todd Tappin, to review the financial metrics for the quarter.

Thank you, Shahrzad. In accordance with our recent Initial Public Offering and acquisition of RTL share of BBTV, which occurred during the fourth quarter into December 31 2020, we're providing Q1 2020 results on a pro forma basis, which are included in the MD&A.

The pro forma basis includes the operations of Broadband TV Corp., the main operating entity, and BBTV Holdings for both Q1 2021 and Q1 2020. The statutory financial statements include BBTV Holdings only.

It does not include the main Broadband TV operating entity for Q1 of 2020, but does for Q1 2021. One notable presentation item for Q1 2021 and going forward is the amortization assets recorded as part of the purchase price allocation or PPA associated BBT Holdings acquiring Broadband TV Corp., in conjunction with the buyout of RTL's share and the company's IPO.

The purchase price allocation total assets recorded in intangible assets and goodwill was CAD368.6 million. Amortization associated with PPA in the amount of CAD5.8 million was recorded in the cost of revenue for Q1 2021 as the primary assets included in the company's technology and content library and agreements.

It should be noted that this amortization associated with PPA recorded in cost of revenue is a non-recurring transaction, and the amortization is non cash. Accordingly, we will provide commentary on the company's gross profit and gross margin as per the statutory filings without the purchase price amortization and - as introduced last quarter - the metrics of BBTV share and adjusted gross margin.

Overall, for the first quarter of 2021, compared to the first quarter of 2020, we note the following highlights: revenue increased 16% in the same period last year, attaining CAD106.5 million. This was led by a 12% increase in RPMs, attaining CAD0.86, and gross margin, excluding amortization associated with the PPA was 9% comparable to the same period last year.

BBTV share, which is revenue, less third-party platform fees, and creator share, for the first quarter of 2021 was CAD10 million compared to CAD8.8 million for the same period last year. And adjusted gross margin for Q1 '21 was 96% compared 93% for Q1 '20.

As noted, revenue was CAD106.5 million for the first quarter 2021, an increase of 16% over the same period last year. This was led by a 12% increase in RPMs, which were CAD0.86 compared to CAD0.77 for the first quarter last year.

Views were 115 billion, up 4% compared to the same period last year of CAD111 million. Trailing 12 months revenue was CAD472.5 million, an increase of 24% over the same period last year.

Gross profit, including amortization, were CAD3.8 million compared CAD0.9 million over the same period last year. Gross profit was CAD9.6 million excluding the PPA amortization, and increase of 17% over the same period last year, which was CAD8.2 million, representing a gross margin of approximately 9% for both periods.

Excluding PPA amortization, gross margins were 9% and 8.9% for Q1 '21 and Q1 '20, respectively, which was up from Q4 '20 of 7.6%, primarily due to more favorable revenue mix of higher margin creators during this quarter. BBTV's share was CAD10 million for the first quarter of 2021 compared to CAD8.8 million in the same period last year, an increase of 13% and adjusted gross margin was 96% compared to 93% last year.

The adjusted gross margin for Q1 2021 was disproportionately higher than gross margin when compared to the same period last year, primarily due to the higher proportional revenue from Base Solutions in comparison the Plus Solutions, which carry amortization associated with app development and content production costs recorded in cost of revenue. Operating expenses were CAD14.7 million for the quarter, an increase of CAD2.3 million compared to the same period last year, primarily due to an increase in content creator promotions as well as permanent infrastructure costs, not yet in place in Q1 2020, incurred to support public company requirements.

The net loss for the quarter was CAD9.1 million, including the PPA amortization, which is an improvement over the same period last year, to which net loss was CAD13.5 million and included a foreign exchange loss of CAD4 million. EPS for the first quarter of 2021 was a negative CAD0.44 based on weighted average outstanding shares of CAD20.5 million.

Adjusted EBITDA was a loss of CAD2.5 million compared to a loss of CAD2.4 million in the same period last year. In terms of the balance sheet, we ended the quarter with CAD11.3 million in cash, and currently have CAD14 million untapped of our CAD15 million line of credit.

And available debt balance was CAD49 million as of March 31, 2021. We are currently evaluating options to refinance this debt for which there's no prepayment penalty.

I will now turn it back to Shahrzad.

Thank you, Todd. As I stressed in my opening remarks, the creator economy is emerging as a key category for online spending by brands and advertisers globally.

BBTV is exceptionally well positioned within the creator economy and we're actively investing to exploit the opportunities as they emerge. Our Base Solutions, which currently represent a vast portion of the revenue streams, provide efficient contribution after revenue is shared with the creators.

Ad revenue is highly programmatic, and our technology allows us to scale revenue efficiently with minimal effort. We also generate significantly more revenue for creators and stronger earnings leverage for BBTV by extending our revenue streams to include direct advertising, content management, mobile gaming apps and other emerging revenue streams, such as NFT's that we've announced last week.

During 2020, we began initial investments in direct sales, which yielded positive results. In our Q4 conference call, we revealed that we were increasing investment in direct sales.

There is a ramp up period associated with this, and the impact of those investments will show up in the latter quarters. So what does this mean for our KPIs?

we will continue to see solid top line growth in our Base Solutions, because we continue to sign up new creators, attract views and see expansion of RPMs like we did this quarter. These dynamics helped us to get to our goal of CAD1.4 billion of top line revenues, CAD300 million of BBTV share of revenue, with mid-teen levels of adjusted EBITDA margins by 2025.

Over that timeframe, top line grows by 2.5x and BBTV share grows by 7.5x, which is a direct result of growth across both Base and Plus Solutions. At these levels, Plus Solutions would represent 30% to 40% of our overall revenue, meaning that Base Solutions will continue to be a key and important driver of long-term growth and profitable economics.

We're building an extra list of targets that will allow us to both add more creators and add more quality revenue stream opportunities over time. With respect to adjusted EBITDA earnings, the investments that we're making now will temporary compress EBITDA margins in the short term, but will also accelerate the timeframe to full year positive EBITDA as early as next year.

So why BBTV? BBTV is essential to thousands of creators around the world.

We have a massive platform for monetization. We operate a very efficient business.

BBTV is trading at an 85% discount to the medium of our peers, which makes it a great investment opportunity. We have a strong pipeline of M&A opportunities to further empower our growth and accelerate our margins.

Now that we're a public company, we have the ability to allocate capital strategically and leverage our data and relationships to further enhance our revenues and margins. I want to close by reminding investors that we're essential to the livelihood of thousands of creators around the world.

We're proud that BBTV has supported these entrepreneurs and thousands of their employees across the world to make money for the content that they enjoy creating. Operator, we're ready to take analyst questions.

I had a question for you first, just on the gross margin. Todd, I think you'd mentioned that the gross margin went up from 7.6% to 9%.

And part of that was due to a better mix of higher margin creators. Can you elaborate on that?

Certainly. When you have the large mix of creators that we have, over 5,000, obviously, they have different terms.

So when you have a mix of those whereby BBTV has a greater share of revenue, generating higher revenue in proportion to the others, naturally, you're going to have a margin increase.

And so how do we think - like, are those types of creators where they vantage top and be signed to types of advertising - sorry types of content that seem to be resonating better in Q1 and Q4? And I guess, how do you think about that margin profile going forward over the coming quarters?

There are a variety of factors. One could be that there are more in those particular verticals that are generating more views and higher RPMs.

But by and large, it also depends very much just on the content itself, what is it that people are actually viewing? So it's a little bit difficult to draw a direct correlation between anything specific, more vertical category or even a geographic category.

So I think that would be a little bit of short to say, but I think it's going to be more content-driven. So with respect to how do we view it over the coming quarters; we, as we've talked about, do expect our gross margin to be increasing.

And the increase is from two factors. One is that as our content creators agreements start to mature, most of them are a one year basis, we do expect to be able to increase our share of that take.

Now that will take some time naturally, because they are one year in length and getting to 5,000 plus and signing new creators all the time, that will take some time. But we do expect that decrease over time.

And then the other is, of course, the higher mix the Plus Solutions, which carry a higher margin, 3x to 5x depending on which category is that Plus Solution. And so as Plus Solutions increase in revenue and increase in the mix, that will be another factor that will continue to ramp up our gross margins.

Maybe more of the macro type question to both of you. There's been a lot of industry changes in digital advertising of late with respect to privacy and consumer tracking.

And I know that doesn't necessarily impact you directly, but I'm curious that some of the market uncertainty may actually benefit you in direct sales, like, I'm guessing, are marketers thinking, "Hey, I've got less visibility and certainty now on audiences, on open Internet buys. I can get that audience by going direct to a publisher, you know, maybe thinking like a private deal approach, private marketplace approach."

I'm wondering how you think about your direct ad sales business? And is that something that you're seeing with marketers to showing more interest?

Certainly, and I would say, by way, on your previous question, exactly what Todd said. And want to also add that our M&A efforts are also focus on higher margin solutions that would actually further obviously improve our margins over time.

In terms of the market trends, Kevin, thank you for your question. In terms of on a macro level, when you're looking at macro creator economy, we know that video advertising has doubled from 2018 to 2022.

And that's a growth from CAD37 billion to CAD82 billion. And this is expected to grow to CAD185 billion by 2025, which is a 40% CAGR that we mentioned earlier during our presentation.

And that really speaks to two factors. One is the fact that consumption, as you look at the pandemic, the pandemic has really accelerated some of those pre-pandemic trends, which is really the consumption of content, specifically with respect to our target demographic, Millennials and Gen Z.

And as a result of it, you're seeing ad dollars are obviously following that trend, which is more ad dollars towards digital. And within digital, you're looking at really the most interactive format, which is digital video, where you can actually really capture more attention of that Millennial and the Gen Z audience.

The second is really, when you're looking at the performance marketers. We are seeing more and more ad dollars that are being poured from brand dollars to performance dollars, simply because of the fact that you can measure results and you would double down on actually what is really working for you as a brand and a marketer.

And we're very well positioned to benefit from that, because as you look at it with BBTV, not only we're actually able to target audiences and geographies, devices, but you're also making it so the actual ads are more relevant with respect to the content that they're being placed against. And because of that contextual relevancy and the fact that the actual content is also premium and brand safe, we actually have higher click through rates than the actual what you're seeing across industry benchmark.

And we've seen that time and time again, where that has helped us with our specifically close rates, when you're looking at the ad sales team and the performance of the ad sales team, as well as, of course, our campaign results. And we continue to see that as a trend moving forward.

Any other thoughts there on the direct sales? I know your staff was similar year-over-year, q1-q1.

Where are you at right now? Can you remind us on headcount and what your targets are still for by the end of this year?

Of course, as we mentioned, we are expecting our ad sales team - doubling the size of the team over H1, and we'll continue to actually grow the sales presence in the East Central and the Western markets in the U.S. And that team expansion is really expected to also allow us to help accelerate the key market penetrations by our core verticals, which is really gaming, entertainment, music, kids, and sports.

And also as it relates to categories that we're targeting, we're looking at CPG, auto, financial services, as well as the big box, retail, food and beverage, travel and PR, which is really, as the economy recovers from COVID. And this is all - if you look at, again, the target demographic that we're reaching with our core advertising solutions, include delivering very much so unique content programming, as what you said, deliver a highly targeted Millennial and Gen Z audiences across mobile devices, and also the connected TV space.

And we really offer guaranteed access to these audiences in a variety of buying solutions, while assuring that we're providing a unique opportunity to authentically reach audiences on multiple platforms.

Just back to the Plus revenue and how we should think about the growth for the rest of the year. What - is direct ads going to be, you think, the biggest driver of that?

Because I think you guys said that they will start to see some growth in the latter part of the year. So direct ads the biggest driver or are there others that we should think about?

And then the bigger picture question perhaps related to the announcement last week for Shahrzad and the team is; related to NFT, so from a strategic positioning standpoint for BBTV, do you see the company playing a big rule compared to what we've seen with your YouTube business and the creators that you have developed and marketed over the last decade or so? That's kind of the first part of that question.

And maybe anything to compare and contrast how that opportunity compares to what you've experienced on the YouTube and video side?

Thank you, Jeff. Todd, if I can address the Base versus Plus and if you can drop in with any additional comments, that would be great.

And we can then attack other question on NFT. And those are both very good questions.

When it comes to our Plus breakdown, as we talked about, we have three solutions on Plus: direct advertising, content management and mobile gaming apps. And currently, Plus represents about 10%, less than 10% of the revenues.

And when we look at the growth of Plus Solutions, it's across all the three pillars. Of course, with direct advertising, the activation of the direct advertising is a matter of course.

But increasing the sales force, that would then leverage our technology tools, our content library, scale, and reach in providing those unique packages to advertisers and brands. But as well as content management, this is a Plus revenue stream that we've activated earlier than ad sales, and is also a large contributor to our Plus solutions, where we work with content partners like the Univision, Just for Laughs and the NBA and Sony Pictures.

And we're very happy that we renewed our partnership with Univision and Just for Laughs, as we actually indicated in our press release. So we certainly have three very strong pillars, Jeff, within our Plus Solutions that will contribute to the growth of the actual Plus Solutions moving forward.

I'll stop right there to make sure - Todd, if you have any additional comments on that portion of the question, please go ahead. And I can then address the questions on NFT.

I think you've covered it well, Shahrzad. The only thing to emphasize is, as you mentioned, there's a very nice distribution of revenue across the three streams.

Of the three, we do think that direct sales as we start to ramp it, will experience higher growth rates. But again, there's quite a bit of balance or revenue between the three.

In terms of the NFTs, Jeff, a very - really good question. And we're very much excited about this announcement.

As you know, NFT's are really emerging as a popular new way for creators and artists globally to monetize their intellectual property. And we now offer that as another Plus revenue stream and a method to further diversify and expand monetization for the thousands of creators that we're working with.

And as you know, we've worked with some of the world's prominent creators. And we're very much so uniquely positioned to market these NFT's to our creator network, which at the end of the day, it comes down to you not only having an extension for that IP, but being able to properly market that and get that in front of the right audience.

And really this combination of the creator economy, the crypto movement, and really that proof of ownership has created this massive monetization ecosystem. And as we look at the role of BBTV in this ecosystem, obviously the very much so short-term goal, which is what we have activated, is the launch of these NFT's in terms of working with the creators and specifically, matching the right creator to the right format and the platforms and extending the monetization to fan engagement and revenue opportunity for us and the creators.

But we think that as the ecosystem is evolving, we will be playing even a greater role in that. I do want to highlight that when you look at the revenue model for NFT's, we do actually share revenues with the content creators that are after our expenses.

And our margins are very much so aligned with BBTV's existing Plus Solutions. And we will actually prioritize and activate, of course, this across the creators that we're working with.

But we will prioritize the ones that have the highest engagement, but we plan on working with many.

Now maybe just a follow-up to Jeff's question in NFT's. Shahrzad, to what extent are you involved with the NBA and some of the enterprise partners on NFT's?

Or is it purely independent content creators?

As it relates to specifically our strategy when it comes to NFT's and you look at the future of the NFT's - look, cryptocurrency, obviously, continues gaining widespread adoption. And we're talking about the real business here, which is, kind of how you actually monetize and specifically engage with the fans.

We're going to be working with all the partners, regardless - whether if they're independent or enterprise. Because it's just another method and a natural extension of how you can actually monetize IP.

And this is why we've actually kind of launched the NFT division. It was simply to be able to actually help our content creators of any size - enterprise or non-enterprise - to basically reach their audiences.

So we definitely will not limit it to independent content creators.

Okay, great. Just going back to the enterprise market, good to see the renewals with the NBA and Univision and Just for Laughs.

In terms of the trend of connecting these big enterprise brands with fans, seems like a big opportunity. How much of the North American market for enterprise is greenfield?

And how much is already penetrated by BBTV and its competitors? What does the landscape look like?

So Deepak, when we're looking at the actual content creators that we work with, we prioritize - as you know, we have our tech has already scanned more than 2.5 billion video assets, where we have actually captured real time data on the actual content in terms of what is trending, where the consumption is occurring. And we would be prioritizing content creators that have the most amount of engagement.

And currently today, as you know, when it comes to viewership and revenue penetration for BBTV is in low single digits. So in terms of market penetration opportunity, it's that.

And also the other part of it that you have to - actually we need to highlight is that we're also in a market that is growing very rapidly. The creator economy is a very much a rapidly growing and evolving landscape that we're very much so well positioned in terms of benefiting from that.

Todd, do you have any further comments on that?

No, I think you've covered. It's just an enormously large TAM.

And I think Shahrzad covered a lot of those metrics on that addressable market in her opening remarks, which I think are relevant as well.

Okay, great. And so I think in the opening remarks she said there was about CAD80 million or CAD84 million in expected digital advertising spend, 2022.

Out of the 50 million content creators that you've identified, what's their capture of this CAD80 million today? And do you have a sense of how much that influencer base can capture of the growing pie in digital advertising spend?

I mean, if you look at it, we talked about how - Deepak, the 50 million people around the world, they actually consider themselves to be content creators, right? And this is growing very much so rapidly.

Because 2 million of these creators are, specifically, consider them - consider to be a full-time profession and wherever they're generating revenue, and it's their full time job. But you will see more and more of transition of that.

Because you not only are limited to - advertising isn't my main source of revenues, but you have all of these other incremental revenue sources in terms of that would actually further help with this shift of specific addressable market. We currently today, we work with only 5,000 content creators.

So the opportunity is in twofold. One, adding more creators; two, basically extending monetization for existing creators.

If you think about, every 5,000 creators, we're generating more than CAD450 million revenue, and we're generating CAD40 million in BBTV share. So as we expand our revenue streams across more Plus Solutions, the impact on gross profit is 15x.

And also as we add more specifically content creators, your - again, that is driving your bottom line. Because as you know, base is a profitable engine that is very much cost effective, that is contributing to a great share of our actual bottom line today and will continue to contribute to the ratio of the actual bottom line in the future as well.

So we see that as again, it's a market that is very much so growing, and we're just at the tip of the iceberg.

That's, that's very helpful. And then my last question, if I may, and I guess it's a bit of a follow-up to Kevin's earlier question.

When we think of specifically of third-party cookies and restrictions on those that are expected to come, how does that overall change in the digital advertising landscape affects your business?

When it comes to cookies, I mean, look, what is so great about BBTV is that we have that access to data. We know the content creators.

We have so much information on the content, where you can actually specifically create these contextually relevant packages for the advertisers. So then you're actually making those campaigns to be more effective.

And then therefore, you actually have better results in comparison to, let's say, the platforms that don't have that access, that don't have that great understanding of the content, the content creators, that now also don't have the ability to leverage cookies. With VB TV, the way we actually kind of target our audiences are a lot of it is mainly driven based on content packages, vertical packages, creator packages, where you're drawing other parallels in terms of audience extensions, to be able to actually deliver very much so targeted effective campaigns.

So I think that definitely will have no impact on BBTV as it relates to our ability to be able to sell campaigns effectively to brands and advertisers. Because our ad units and the way we sell them is very different than programmatic ads that are sold by the platform's.

And so for those platforms that don't have the access to that data, and when those third-party cookies go away, the - I guess it would make sense that that -

It would mean that companies like BBTV, we have a greater ability to pick up the greater lion's share of the ad spending digitally for video for concentrators. That's what that means.

Because you have more data, you have more specific information on the content itself, and the creators.

Perfect. Looking forward to that gain in market share.

Shahrzad, with respect to your efforts on the direct sales front, when you think about the conversations you're having with advertisers, are the conversations more around sort of integrated brand advertising, I mean, where you basically take those brands and kind of integrate it into the content itself? Or is it more, sort of, I think what you guys call the reach type direct ad sales?

I wanted to get a sense of where the conversations are headed as you look to ramp up that line item. And then a quick follow up for Todd, if I may, on the gross margins.

I mean, you provided some good clarity on that, on the reasons for the uptick from Q4 to Q1. I mean, it seems to have an element of seasonality when we look at last year as well.

So in that backdrop, when we think about forecasting Q2, Q3, Q4, should we kind of go back to sort of the year-over-year outlook rather than build out of Q1? Just wanted to get some clarity on that as well.

So in terms of direct sales and how we actually kind of productize obviously our content, we obviously leverage our tools with a variety of amazing content creators and in terms of developing really highly targeted and unique content-first product offerings that really enable marketers to align their messaging with content that delivers both, of course, reach and scale as well as brand safety. And when you're looking at the actual format, it is rich media and we do actually kind of specifically, many times have that combined with branded entertainment campaigns.

And as you know, with respect to the efficiency and results, many times, you have campaigns where you have a combination of both, but mainly, I would say it's coming from rich media, and there's a component that is allocated to branded entertainment. And we'll see that actually continuing to grow, because if you look at new ways in how you can actually make the branded entertainment and those brand integrations, again, scalable and - in some ways - available to more brands and agencies, obviously, we will see a pickup there too.

But certainly, it will actually make those campaigns to be more authentic and therefore, generate great results.

And Aravinda, your question with regard to gross margin and seasonality, it's a good question. Frankly, seasonality has more of an impact on the RPM metric than it does anything else and, of course, viewership with respect to the types of things that people might be viewing during a particular period of time, whether that be seasonal sports or holiday period or whatever that is.

Frankly, the key driver in gross margin is really more around our own execution. It is more about us being able to use our size, our scale, our capabilities, the breadth of our offering, to improve our margins on the Base Solutions and the expansion of our Plus Solutions, which as they gain a higher mix of revenue also contributes to higher margins.

Great. And if I may, just quick follow-up on some of the comments you're making Shahrzad about the size of the market.

I mean, given that you're talking about having 5,000 content partners; if the market is that large, and - which means there are obviously a lot of much smaller entities that you can service. Is there a case for you to consider a more basic, low touch self-serve product that you might even have to offer at a fee, but be very incremental to your revenues with very little cost?

I mean, is that a consideration when you consider the size of the market?

So Aravinda, I think when you're looking at particularly the longtail and the independent content creators, we certainly think that that is one way of monetizing them. The reason why we like the revenue sharing model is because you're actually sharing in the success of the content creators.

And as our solutions generate results and drive results, we're obviously sharing the success of the content creators rather than having a cap on, specifically the fees that you can charge them. That said, if you actually are within a certain size, we can certainly look at a model where we actually charge them on a fee basis.

But currently, as you know, when content creators leverage our platform and our solutions, they would actually benefit from a lift of 19%, in terms of the average take home for them annually. And that is, as Todd mentioned earlier, the average length of contract with the content creators are one year and they auto renew.

So the overall impact on the content creators are much greater than 19%. And for us to be able to actually share in that success, obviously, is great upside.

But certainly, Aravinda, there's a case to be made for self-serve for smaller creators.

Shahrzad, you mentioned serving ads across all devices. Can you tell us your desktop versus mobile mix right now?

How are you thinking about Apple's new tracking transparency feature in terms of the base program ad business?

So sorry, Chris, my apologies. I couldn't hear your question clearly.

Would you be able to repeat your question again?

I'll pick up the line. Yes.

You mentioned serving ads across all devices. What's your device - your desktop versus mobile mix right now?

And how are you thinking about Apple's new app tracking transparency feature in terms of the base program ad business?

As far as when it comes to the devices and the format, as you all know, majority of the consumption is occurring on mobile devices. And this is a metric that is publicly available by many platforms, where you have, obviously, for example, platforms like Instagram, they're mobile-only, whereas other platforms like YouTube and TikTok and Facebook and others have both a mobile and, obviously web version.

What we're seeing is obviously, the mobile consumption is the main driver of consumption across the board, where you're looking at 60%, 70% plus percentage of their consumption. But we have seen during COVID, also an increase in terms of consumption across connected TV devices.

As far as our team, we are focused on selling obviously where - ads against our content where consumption takes place, which is mainly mobile devices. And we're also getting into selling products to devices across multiple platforms.

As far as platforms offering, new solutions, specifically on Apple, I can't really comment on that. Because, again, these are new products and you need to - I think as you have access to more data, you have access to more formats, you have access to more visibility in terms of targeting audiences, it obviously would help you better in terms of reaching that audience.

And we've seen this across the board with respect to products that have been launched by Google, Apple, of course, Facebook, Instagram, and ByteDance with TikTok. This allows us to measure more effectively.

Understood. And maybe just back to the Plus revenue.

It's around 7% of total revenue today, and you have aspirations to get north of 30% by 2025. But if we just look a little bit closer to maybe the year end, what would be kind of base or optimistic case for the percentage of your total revenue in the Plus category?

Yes, Chris, I don't think we want to make really specific projections on that since we're not giving that kind of guidance. But obviously, as we have talked about, we do think that exiting the year, we'll start to see some of that growth in ramp from our direct sales business.

And we will also see some of the execution that we have throughout the entire course of 2021. So as we exit the year, we think that we'll start to see some improvement in those margins.

But I think we would shy away from giving you specifics there.

Okay, fair enough. And Todd, while I have you, just on the gross margins, are you able to quantify the percent of content or views that's rolling off the penetration pricing this quarter and throughout the year?

And also how you're thinking about any possible churn in that content as the contracts renew?

Well, we certainly expect to maintain our very, very high retention rates north of 95%. We've not seen anything that indicates anything but great continued reoccurring revenue from our existing content owners, as well as continuing to sign new content owners.

So we'll certainly be cycling through those agreements. And as we look to improve not only those terms, but also adding new content creators, not just in North America, but in new territories.

And so as we continue to enter new markets, in the same similar fashion, we think we'll be able to enter those territories also with more improved margins as well.

Shahrzad, my first question is for you. Can you touch on actually touch on a little bit of what you're seeing in prospective content consumption trends?

And how they're evolving as you start to lap COVID-19 on the core platforms? And beyond that, what new channels or categories do you see opportunity to participate in, like socially, like social commerce?

For sure. The first part of your question before categories, I want to make sure I heard that correctly.

Your question was on consumption around - it was verticals. And what was the other piece of the question?

Was on the channels - well, really want to get a better sense of you how some of the content consumption trends you're seeing today on your core platforms? And then really, where you see opportunity to participate in kind of newer channels or newer categories that has like social commerce?

For sure. So when we look at actually content verticals, obviously, consumption has increased across all verticals, as we talked about the pandemic has definitely increased the pre-pandemic shift.

And we're seeing that across all content verticals, within music, gaming, kids, sports, across lifestyle, entertainment, all the verticals that we offer at BBTC. And certainly, there's great opportunity as you're looking at vertical expansion, particularly I would actually say even within sports, we mainly have tackled basketball - basketball culture as a key vertical.

We see great opportunity in further expanding that as well as really looking at new and emerging verticals. And this is obviously different across different geographies.

Currently, as you know, today, we operate across 30 countries and 12 languages. So we certainly - that's part of the roadmap.

As we look at growth, we look at not only growth across platforms, and of course, territories, but we would be looking at growth across verticals as well on. But we have seen consumption trends across verticals growing very much so rapidly in all verticals.

When it comes to revenue streams and expansion across revenue streams, you mentioned social commerce. Look, we're very much so laser focused on the three pillars of Plus Solutions, which is direct advertising, content management, and mobile apps.

There's massive opportunity with respect to all those three pillars. We're very much so excited about the launch of the NFT division, and we believe that that would further allow us to actually help monetize IP, and extend IP for us and our content creators beyond what we're doing today.

But certainly, as you look into the future, and we've seen this across social commerce, we talked about how 755 of the people that are actually watching content online, they actually get to buy a specific product that is recommended by a content creator and an influencer. So we definitely, and this is why we believe that we're really at the tip of the iceberg when it comes to this monetization ecosystem around creator economy.

And given our reach and scale and the fact that viewership and engagement are the two key most important metrics that matter in this industry, I think we're very, very well positioned to benefit from these revenue streams.

Next, I wanted to touch on competitive landscape and get your thoughts on how are you seeing the kind of backdrop of the walls? Kind of wondering are you seeing any new competition from new entrants?

Or are you seeing an existing point solutions get more competitive by maybe broadening and expand the capabilities? Just kind of curious on your thoughts there and what you're seeing.

Very good question. When - and Todd touched on the retention rates.

We have north of 95% retention rate, which is very, very, kind of above industry average. And this really speaks to how our solutions are effective, and that they're generating results and that the customers are happy.

And as you continue to actually keep on building on our solutions and when you looking at the content creators, what we do offer them is a one stop shop solution without the need to have to juggle multiple vendors. And these solutions are generating results.

And this is why you're seeing that our retention metrics - you're seeing that in our retention rates. Because at the end of the day, we are generating great results, and the customers are happy.

And we're going to keep on seeing that as we actually add more solutions, as we actually grow and scale across our both Base and Plus Solutions, it would make it more challenging, obviously, for others to compete with us. And that goes also to actually the solutions that we built with respect to our technology.

I touched on how we've built solutions where we've analyzed more than 2.5 billion video assets. And we are providing solutions forum content discovery to collaboration, to monetization to our content creators.

And this again, it's going to become very difficult for others to create competing solutions, because you're having this end-to-end solution that helps content creators without the need to juggle multiple vendors.

Thank you so much, everyone, for joining us today. And kind of again, we're obviously always available if you have any follow up questions.

We're very excited about the growth of the business, our results. And again, I do want to remind all of you that we're very much so essential to the livelihood of thousands of content creators around the world.

And we're very proud that we supported these entrepreneurs and thousands of their employees across the world to actually make money from their content that they enjoy creating. And we appreciate your time and continued support and look forward to connecting in the future.

Toddy, any final thoughts?

Nothing else from me. Thank you very much.

Thank you, everyone.