IDW Media Holdings, Inc.

Davidi, I've been going back and forth about earnings. [indiscernible] report.

[indiscernible] the loss because of the whole Diamond situation and retaining, and I wonder if you could, again, talk about -- in the e-mail a day about how IDW selling on GlobalComix to help stem the alleviate -- not alleviate but help how offset losses from the whole situation?

Understood. Thank you for the question, [ Damian ].

The -- I mean, I just want to clarify, I heard in the introduction that Andrew is the VP of Finance, Andrews is our Chief Financial Officer. It's probably an old script.

In terms of Diamond, Diamond accounts for -- I mean, accounted, they no longer are a customer through Penguin Random House. Diamond account is for about, I don't know, let's call it, between 15% and 30% of IDW's business roughly between the comic and the book market -- between the direct market and the book market.

The entire digital suite of companies that we sell through Apple, Google, Kindle and a whole bunch of other digital platforms collectively account for probably about 5% to 7% of our annual revenue. So in terms of the notion that we'd be able to sell on GlobalComix, which we're already selling on GlobalComix or on other platforms and it would be able to meaningfully mitigate the loss of revenue from Diamond is sort of fanciful.

Not to say that we're not going to do it because we want to grow the ability for customers to be able to access IDW content and for us to have additional potential revenue streams. But it's not as though we see 1 as being able to offset the other.

I think that the Diamond -- what's more likely is that Diamond leaving the market as a wholesaler means that comic shops are going to have to buy directly through Penguin Random House. So comic shops that had deals with Diamond that maybe gave them better pricing, better credit terms.

Diamond is no longer in the marketplace and they want to buy the content that Penguin Random House exclusively distributing like Marvel, like IDW, like Boom, like Dark Horse. They're going to have to set up accounts at Penguin Random House.

We do expect there will be some diffusion where some of those customers are not going to set up accounts at Penguin Random House. Some of them might not really be comic shops.

Some of them might be sort of comic buying collectives where I don't think PRH will set them up as customers. But we do think that the majority of customers will ultimately set up account at Penguin Random House.

So we expect there will be time frame, maybe it's going to be 2 to 4 months, while retailers transition over from being Diamond customers to being Penguin Random House customers, then we do expect during that time frame that our sales will be diminished, but we're finding creative ways to sort of reinvite those audiences that may be missed out on some of our offerings during that time frame to try and go back to them and make sure that, that content that they missed during that time period is available to them. And to be realistic about our projections that we do think for a period of time, our projections will be substantially lower because of the diamond drop-off.

And overall, we think our overall projections year-over-year would be down even if everybody moved over or all those that were capable of moving over from Diamond did move over to PRH, we still expect that we'll be down year-over-year because some of those customers, like I said, will not be able to become Penguin Random House customers in our estimation, but we do think we'll have a much more stable marketplace. We do think the customers that will be able to buy from Penguin Random House and being able to buy being able to see PRH as kind of the final selling point, not going through a wholesaler that was perennially behind on its payment terms.

We think that, that will be a healthier marketplace that will be more stable for those comic shops and for customers ultimately. So we do think there will be some flux.

There will be a little bit of crunch. But ultimately, we do think it will be a more stable marketplace for the industry.

And Davidi, if I may, just add to that. For those on this call, you've I've heard from us over the last 2-plus years, the steps we've taken to make the company more efficient.

And I think that is reflected in the numbers. If you look at our 6 months ended April, yes, we are showing the $1.7 million loss.

But remember, $750,000 of that is the direct impact from Diamond. So -- of course, it happened but without Diamond, we'd actually be in a better position, bottom line on $2 million less of revenue than we were at this time last year.

So while we didn't know that Diamond would go bankrupt, we didn't know that, that specific thing would happen. We have been doing what we can over these past 2 years to make sure the company is in the best position possible to absorb potential bad news when something like Diamond does come along.

All right. Can you also talk about the item original slide again?

I gave you a lot of ideas. I know that [indiscernible] iteration about that stuff?

I guess I don't want to overload -- I know we both want the same thing, to see IDW exceed and grow and be in a better place than right now. I was wondering if you can really like -- really try this idea that has support in some type of way.

Maybe not talent the hunt, as I suggested, but maybe more kickstarters, probably try to go around starter areas? That will also help us.

I mean look, in terms of IDW historically, has essentially had 3 different -- let's call it, content buckets. There was the licensed bucket, which was Teenage Mutant Ninja Turtles, and at other points in time, Transformers or Ghostbusters, et cetera, right?

So we still -- that's still a meaningful part of our company, I'd say that accounts for the bulk of the revenue, NinjaTurtle, Sonic, Godzilla, Star Trek, et cetera. And then there was the creator owned bucket, which was like Locke & Key and Wynonna Earp.

And there were opportunities from time to time to leverage that content to create media, to create TV shows, movies, et cetera. And then the third bucket, which is sort of adjacent to the creator owned bucket was the top shelf in print, which also had a lot of creator owned content.

It's just of a slightly different flavor than IDW where a top shelf is more literary and IDW traditionally primarily was releasing its titled through issues and then through trade. So we're continuing to do all 3 of those buckets.

We're just being more selective in that middle bucket of IDW originals, where when IDW originals launched, there was a pretty robust catalog of titles and the spending, I would say, was substantial, certainly relative to the value that was being generated for shareholders. And so we cut back meaningfully on the IDW Originals program, especially on the ones that were substantially costly.

Some of those moved over to top shelf. So we're continuing to pursue some of those, but we did have to cut back on a lot of titles, but we are continuing to do some IDW originals that are creator owned?

And then the other thing that we noticed about IDW Originals is that they were pretty fragmented in terms of what you would be able to expect from an IDW Original because 1 month, you might pick up a horror title from Scott Snyder, and then the next month might be a kids title about cooking with monster. And it was like hard to tell what's the true line of reading an IDW Original?

How do I know that I'm going to get a certain level of quality or a certain content funnel. And so what we've decided to do is to move away from sort of IDW Originals as an overarching umbrella and move into what we're calling IDW imprint.

And the imprints will be much more targeted and specified. So IDW dark is the first of our IDW imprint that's focused on IDW horror.

I turn off the light, dark, and there, you'll see titles like, Beneath the Trees Where Nobody Sees, 30 Days of Night and other titles that we'll announce in the future as well as licensed titles that are that fit into that genre. So screen -- sorry, Smile.

A Quiet Place. Twilight Zone, Sleepy Hollow, Event Horizon, and other titles that we expect we'll announce on the license side of IDW dark.

And then there are our other IDW imprints that we'll be announcing in the coming months. I'm not sure if it's a quarter or 2 quarters, but I expect that we'll be making announcements about our other IDW inference.

The thing that we're doing in addition to spending up to segmenting so that it's easier for audiences to find the titles that they're interested in. So an IDW dark reader might be interested in IDW dark, but they might not be interested in the different imprint that might be totally different content might not be hard in content.

The other thing we're doing is we're creating a fourth bucket, aside from -- so we have our license, we have our creator on IDW. We have our creator on top shelf.

And then the fourth bucket that we have, which we're creating now is our company-owned content, where IDW is going to be generating content internally that we are going to own and control completely. We'll be making sure that it's -- there's remuneration and upside for the creative partners that we work with on it, but it's not like a creator own project where the underlying IP is owned by the creator, rather it's going to be owned by the company and the people that participate in the creation will have the ability to participate in the upside that will be, to me, that's a fundamental shift for IDW, and that's where, I believe, a lot of our value lies in the future.

We want to own our own Mickey Mouse or our own universe, our own characters, what I say that the likelihood of success is very high or guaranteed. No.

I mean this is the content game. We have to we have to try and find our audience.

We need to create exciting and compelling stories and characters and universes, but the upside potential is tremendous and we believe we'll be able to mitigate the risk and manage the cost. So we are continuing with, I believe what you're referring to as originals.

We're just turning it into imprint and diversifying into company-owned. And when it comes to the type of things that you've suggested, ever in terms of competitions and trying to find creators through sort of online portals.

We just found that those are time intensive and costly and we have enough -- we have a strong enough content funnel from trusted, creative partners that we believe that we'll be able to bring compelling content to the market without having to go search too broadly, which will take away from the efficiency that Andrew mentioned earlier.

As that -- since you mentioned the endpoint, I also did mention about [ Anthology ] series. Could that look into this thing?

Now like [ Anthologyembolies ] has for either you IDW showcase a series...

I'm not understanding what series did you say you'd want us to look at?

An Anthology series like doing series collection, yes...

Anthology theories are a possibility. I think -- I mean, look, the thing about anthology series, they are exactly what they found like where you're kind of getting a bit of a taste, but not really getting a full story.

So I think that, that anthology series are potentially an effective -- an effective way to test the audience. At the same time, we want to believe in the stories that we're telling.

So I'm not saying that we won't do anthology series, but I think our first instinct is it to tell complete whole stories that we believe will resonate in the market.

John, this is David. Are we still waiting doe Keith.

Hello?

Yes, I hear you. I just didn't hear anyone else.