With sole focus on digital, theScore enters a new era
July 26, 2013 | Chris Powell | Comments
Having shed its broadcast assets in a 2012 deal with Rogers Communications, theScore is thriving as a pure-play digital company, says chairman and CEO John Levy.
Levy said that the Toronto-based media company is essentially back in “start-up mode” again after selling the Score Television Network – which was recently rebranded Sportsnet 360 – to Rogers for $167 million in August.
“We’re excited as hell in terms of how we’re performing,” said Levy after the release of theScore’s third quarter results on Thursday. “Sometimes the most successful operations are the simplest ones.”
TheScore reported revenues of $1.37 million for the three months ended May 31, a 19% increase over the corresponding year-earlier period. Losses for the quarter were $2.35 million, up from $2.07 million the previous year – which the company attributed in part to an increased investment in personnel related to the development of its mobile apps.
TheScore has increased the size of its developer staff by 40-50% in the past four months, said Levy, and continues to attract some of the best developers in the city. There is also an emphasis on building the content team, which Levy boasted is unlike any that exists in Toronto.
While acknowledging that theScore will remain in “loss mode” for the foreseeable future as it builds its user base, Levy said that continued adoption of its mobile platforms bodes well for the company’s future business. “This migration of usage from traditional mode to online and now to mobile is positioning us very well for our future growth,” he said.
TheScore’s active monthly user base increased 25% to 4.5 million in the quarter, with about 65% of its user base coming from the U.S. While North America remains theScore’s primary focus, Levy hinted that international markets would ultimately become part of its growth strategy.
Levy said the company also remains committed to integrating new features into its mobile app. In May, the company recorded more than one million subscribers to its Breaking News Alerts on iOS and Android platforms. According to Levy, use of the push alerts explodes between 7 p.m. and 2 a.m., when most of North America’s pro sports leagues are in action.
In May, theScore closed on $16 million in private placement financing that Levy said would go towards the development and the marketing of its mobile apps.
Levy said the company could have waited to raise the financing, but he didn’t want to have to divert resources to raising capital 6-8 months down the road. The fact that theScore’s product and the mobile environment are also, in Levy’s words, “hot” also made it an ideal time to approach investors, he said.
“We were able to raise the money and extend the runway, and now we’re well armed to do all the exciting things we want to do. There’s really nothing stopping us now.”
Levy said that the company is only “scratching the surface” in terms of advertiser adoption of its products. Its primary advertiser product is banner advertising at the bottom of the sports pages, although it is experimenting with adding more creative elements – such as a trivia contest it ran in partnership with Molson during the NHL playoffs.
“We just want to be ahead of that, because there are agencies and clients that are coming up to speed, and then there are ad networks that are buying space on mobile networks en masse, and that’s a huge growth area both here and in the U.S.
“The more we refine our product, the more information we can provide them and the more personalization, the higher the CPMs become,” he added. “It’s a growing percentage of our business and I think we’re doing better than most because we’re in early and we get in.”