Zoo Digital Share Discussion Threads

[tkamp] 19/9/2019 12:26

Great post Gerihatrick, thanks for sharing.

You say "As far as take over is concerned they are always receiving nibbles of interest". This was said to you by someone who works at Zoo or where does this come from?

[gerihatrick] 19/9/2019 11:04

As they said in their AGM statement yesterday morning they are carrying out a "de facto" contract at the moment for a major content producer. Recognising that Disney is going solo from Netflix in November my guess is...but they are not allowed to divulge. The other major players are undergoing major internal re-organisations and have not yet finalised their new preferred provider lists for the next 3 years. As they said this is significant work and they continue dialogue with the others. I am sure they will issue an RNS should they get preferred provider status from any of the others.

The major transition that has happened in the industry is that it has moved from "hard" product-DVDs etc to "streaming". It has taken 10 years to happen. It is still happening. The next transition is the move from using Netflix as the source of supply to going solo. Hence Disney has bought Fox and Hulu and is going solo from November -they will have content more than any other player. I think Netflix is a "short" as a result! Over the last 2 years ZOO has become an "ad hoc" vendor as the majors trial other providers to package their content. The next step is to become a preferred provider. The majors will have 3-5 providers and will never use one exclusively-and there is too much work. Dubbing is 10 times the cost of subtitles! ZOO is unique in that it does the job remotely/in the cloud -without a studio-and can maintain the quality.

The new concept they have introduced is now referred to as "ZOO studio". This is a template for all the requirements needed in the process for subtitles and dubbing. They are providing this free to the studios and the other parties, all on the basis that they are one of the preferred providers. They also include in this package what they refer to as a "session" test which ensures that all the components to ensure the quality is in place. This was demonstrated-brilliant. Traditionally, the studios simply sold the content around the world and left all this to the country concerned-that has all changed. They will now handle it centrally for over 50 countries and languages and what better way to do it is there than to use the ZOO technology-they are starting from scratch! While the discussions are ongoing I spent time with the key man based in California who has been there 20 years and clearly has all the "contacts" as well as 116 staff out there. He describes the discussions as being "favourable". They are being rightly cautious as one never knows what is likely to unfold but the chances look good to me and this new function is impressive! AS far as take over is concerned they are always receiving nibbles of interest but £2 would do me fine! Gaining formal preferred provider status would increase the value so if anyone is serious about buying the company now would be a good moment imo.

Progressive Research analyst was present and he has done an excellent summary and projections, which is based on winning preferred provider status. Cannaccord was also represented and they hold 9%; Oppenheimer still hold 14% and Herald Investment Trust also have a major holding.

[martina pescatore] 18/9/2019 15:51

I think the statement is very encouraging as a shareholder. The outlook is positive and the comment on ...”Since August ZOO has been operating as a de facto preferred vendor for a major content producer to support the launch of its direct-to-consumer streaming video-on-demand service, and whilst longer-term contractual arrangements have not yet been finalised, a significant number of revenue-generating projects for this client are already underway with visibility extending throughout our second half....”

This just has to be Disney IMO, who previously stated that they would be beta testing around September 2019 and launching Disney+ in November 2019, and would use three main preferred vendors, who would, I understand, then either localise in-house or subcontract the work to third parties. It would be great news for Zoo when / if announced and I am not so sure that the share price is up with such events if they happen this way.

NIA and DYOR

[uknighted] 18/9/2019 09:28

ZOO Digital Group plc (AIM:ZOO), the provider of cloud-based localisation and digital distribution services for the global entertainment industry, will hold its Annual General Meeting (AGM) at 4.00pm today. At the meeting, Gillian Wilmot, Chairman, will make the following statement:

“This is my first AGM as chairman of ZOO and I am pleased to provide a positive update as we approach the end of the first half of our financial year. Our vision is to be a leading next-generation media localisation business that offers a unique combination of software and customer service to the film and TV industry’s leading players, and I believe we are making good progress.

“We anticipate revenue for the first half to be in line with our expectations and remain confident in our full year expectations. The on-going changes in our industry have affected our sales mix, with a positive impact on margins in this half, and so we anticipate adjusted EBITDA for this period to be ahead of our expectations with revenues broadly in line with the same period in the previous year.

“This result is against a backdrop of considerable industry change, which remains characterised by ongoing and well-publicised transformation across the supply chain. Many major industry participants have been progressing plans for streaming video services, other participants have not yet settled internal reorganisations and there has been notable M&A activity. These were factors in the softening of our localisation sales that we reported in the second half of the prior year and which continued into the first months of the current period.

“Since August ZOO has been operating as a de facto preferred vendor for a major content producer to support the launch of its direct-to-consumer streaming video-on-demand service, and whilst longer-term contractual arrangements have not yet been finalised, a significant number of revenue-generating projects for this client are already underway with visibility extending throughout our second half. With both new original content and back catalogue titles needing to be digitally packaged and localised for multiple territories to support this new service, this is providing us with a significant pipeline of work. We also continue to be in dialogue with a number of large media companies regarding their selection of preferred vendors for localisation and digital packaging services.

“The decline in demand for traditional DVD and Blu-ray digital packaging work has accelerated further. It is however pleasing that the lost revenues from this service line have been matched by strong growth in demand for equivalent services for contemporary Over-the-Top (“OTT”) streaming video platforms, and we expect this demand to continue.

“The market continues to expand through the launch of a number of new direct-to-consumer services over the next 12 months, the growth in production of original programming and the enlarged number of languages into which content is being localised. We expect that these factors will contribute to further growth in both our localisation and OTT digital packaging segments.

“I am confident that recent commercial developments and our enhanced technological proposition leave us well positioned for long term growth.”

Presentation slides that will accompany an investor update following the AGM will be available on the Company’s website later today.

The Company intends to announce its interim financial results for the six months to 30 September 2019 on 4 November 2019.

[gerihatrick] 18/9/2019 08:17

as the "de facto" preferred provider for a major content provider for direct to consumer streaming-significant work-that just has to be Disney who go live solo in November-leaving the Netflix stable... and to include a large backlog-buckets of work. While at the same time they continue dialogue with the others. Many languages; lots of dubbing all positives. While they continue dialogue with the others...my only concern is ..can they cope!

[tkamp] 18/9/2019 07:48

Yes. Zoo will be releasing a presentation later today on its website, so that will be interesting.

I was told that the work they are doing for Disney also includes dubbing btw. They're not just selected as a preferred vendor in subs.

[amt] 18/9/2019 07:45

I expect it will come out in AGM if dubbing is beginning to succeed. I expect share price is well up with events though and they cannot afford any dissapointment in H2.

[tkamp] 18/9/2019 07:30

@amt

Well it may be somewhat implied by the message on 'positive mix for margins'. I wouldn't read into the lack of info on dubbing too much. After all this is a short trading-update where they purposely are not adding a whole lot of detail.

While I don't love that revenue growth hasn't come through in H1, they do clearly imply that it will come through in H2. They namely need ~40% YoY (and ~30% vs. H1)growth in revenues in H2 to meet FY expectations, which they say they are optimistic they will meet. So it sounds like much of the Disney work will come through in H2.

I'm also very happy to see that margins are actually improving. My secondary worry besides growth for Zoo was that margins wouldn't recover sufficiently. It's now apparently showing that margins are improving, and that's even before scale-effects kick in. If Zoo actually grow strongly in H2 and keep their overhead cost base largely fixed + the positive sales mix effect continues then FY margins could actually surprise significantly to the upside. In my own model I had only 8% EBITDA margins penciled in for this year, and broker has 7% I believe. There may be scope to go above 10% already this year.

[amt] 18/9/2019 07:22

No mention of dubbing which is a bit odd. Otherwise encouraging.

[amt] 07/9/2019 07:39

Nicyts Where is the evidence that the ticker has picked. Seems to have slowed in the last couple of weeks to 125k per day. Was going at 160k per day a while back.

[tkamp] 06/9/2019 09:15

Hard to imagine Zoo would be expanding its footprint in an expensive location like London (Soho in particular) if they weren't very confident they would win some of the bigger RFPs. No need to expand capacity it the growth rate wouldn't have picked up materially from where it was a year ago. So I take this as a positive signal.

[nicyts] 06/9/2019 08:30

Zoo news on website. Opened a new hub in London.Also ticker. Seems to be moving at a pace.Anyone have any news about Disney?

[2350220] 03/9/2019 09:36

Nah.
They've well made me my subscription, many times over with their Blue Prism trip 😊

[eggbaconandbubble] 02/9/2019 12:48

235, have you challenged them about that?

At least demand a refund on your sub if you have one!!! :-)

[2350220] 02/9/2019 10:48

Seems to be a lot happier these last few months.
What used to be
Penny Share Letter, which changed to Technology Profits Confidential issued a note to close our position in ZOO a couple of months back, at 66p.
I'm glad I ignored that note now, as I would have lost a few grand.
John

[harleymaxwell] 30/8/2019 08:24

Moving up nicely under the radar

[aphzombie] 24/8/2019 16:40

All the press I've seen has Disney+ to be released on November 12th … don't know where that Slator article got September from. I know that way back it was originally slated for September release but that was changed back in the spring to the Nov 12th.

[tokyojoe007] 24/8/2019 14:14

One might wonder why Zoo bothered to put page 7 into their last financial results presentation, introducing a 3 tiered buying model, not just adhoc or preferred supplier (as per Netflix and their Preferred Fullfilment partners) but also adding a 3rd, ‘Prinary supplier of the PReferred list’. Maybe they think they will be the primary winner of the Disney RFP. The relationship is v long standing back to DVD authoring. One might also wonder why almost all twitter/newsfeed articles have somehow mentioned a title or former hire from Walt’s old company. DYOR and NIA, we can live in hope, Disney want to release their streaming service in Sept, so would think they need to announce their localisation RFP results shortly.

[martina pescatore] 23/8/2019 15:52

Could explain the apparent increase in vacancies recently if Zoo are preparing for such a contract win?

NIA and DYOR

[mediatech100] 23/8/2019 14:00

An unsuccessful bidder

[she-ra] 23/8/2019 13:54

mediatech100 - Who were you told by?

[mediatech100] 23/8/2019 12:57

The other two are SDI Media and Deluxe

[tkamp] 22/8/2019 21:00

Told by whom? Industry insiders?

[martina pescatore] 22/8/2019 18:17

If Zoo are one of the three selected then it will be great news imo. Even if Zoo are one of the localisation companies in the frame then it shows how far the company has come over the last few years.

Disney+ announcement expected September 2019, Warner Bros announcement some time in 2020.

NIA and DYOR

[mediatech100] 22/8/2019 16:03

Re the slator article I'm told Zoo is one of the 3 for Disney +