Curiosity Inc. CEO Clint Stinchcomb On the Pivot to AI Licensing

Streaming, an expanding, fascinating, but highly, highly competitive sector. So today, we talked to Curiosity Inc. to find out how one streamer is pivoting to protect and diversify [music] its revenue. With a foundation anchored in its Curiosity Stream platform, a factual entertainment company built on documentaries about science and history. The company is nevertheless now banking [music] not just on subscribers, but in growth in content licensing to train AI. My guest today is [music] Clint Stinchcom, president and CEO. He took the company from a 2018 private placement through a 2020 spa merger and has [music] continued to build out Curiosity while public into a content portfolio that now reaches more than 175 countries. And in parallel alongside that since 2024 [music] that allimportant move into AI licensing. Today we discuss that change in business with Clint, how his investors are reacting, and [music] the role that the company plays with some of the biggest players in the AI game. Let's get into it. Clint Stitch, CO, president and chief executive officer of Curiosity, Inc., I'm thrilled to sit down with you because your business is, you know, on the outside in looking as though it's in exactly the right place at exactly the right time and that is in the world of finding content and materials with which the AI giants are hungry to train their models. Talk to me if you don't mind and just lay out in simple terms for our listeners the different pillars of Curiosity Inc.'s business model. >> Thank you for asking Anna. It's terrific to be with you today. So, our business at Curiosity really is is two things. It's we have a subscription business. Anyone with a broadband connection around the world can subscribe to Curiosity Stream for $5.99 a month. Um, anyone can subscribe through our partners Amazon, Roku, Apple, Comcast, you know, Zigg all over the world uh to get our service. And then we have a licensing business. Um, up until sort of the end of 2024, our licensing business was primarily licensing traditional content to uh traditional media companies ranging from, you know, Netflix to HBO to Fox Nation to Alazer to, you know, RTL like public broadcasters all over the world. Um, in the in the middle of 2024, early 2024, we read about this deal that uh Reddit did with Google and it was the $200 million licensing deal. And >> as I was reading it, I really didn't even completely understand what I was reading. And so, you know, interesting, you know, sort of filed it away and then I started to read about more deals. You know, Condonast did a deal and the Atlantic did a deal and Reuters did a deal, NAP did a deal. So, you have all of these digital publishers um doing these deals. And as I'm as I'm reading it and starting to understand it a little bit better, I thought, huh, having been around the media business for a long long time that there's got to, you know, video has to follow this. There has to be um there's there's not I don't believe that they can just that the technology providers can continue to just scrape video from the internet for a variety of reasons. And so, I think there'll be a video market that follows this. So um I said to our people like let's kind of let's take [clears throat] a small group and let's really throw ourselves into this because we even though we have relationships with the the hyperscalers on the traditional video side we didn't have relationships as it related to uh AI training and so we sort of threw ourselves into this you know just met with everybody that we could talked to everybody that we could and um through [clears throat] you know through the grace of God and sheer will at the end of 2024 we did our first meaningful agreement. And from that, we learned really four things. And the and the first was, okay, you know, we've got the legal chops because there's all kinds of noise in the marketplace around um what you can do, what you can't do with video and and all of the uh concerns therein. So, we learned, okay, you know, we have terrific uh general counsel who's also trained IP attorney. >> We've got the legal chops, one. Number two, um they didn't require exclusivity. So as we talk to people like I we can do non-exclusive agreements which is good because then you can license similar content over and over >> and who's who's the day in that [clears throat] >> meaning the uh companies that need to license AI trading data meaning everyone from the hyperscalers and today you know there's 50 60 70 80 you know additional companies who need to license data as well and and so we believe that's an it's obviously concentrated with the you know frontier model developers but um lots of other developers as well. There's translation companies and we believe um you know over the not too distant future there'll be a lot of enterprise companies who license data directly and you know part of that is as we get into this uh what [clears throat] some of the engineers refer to as uh open source in tune. So I think it was open source models become more readily available. You'll see companies use those for maybe 80% of what they want to create and then you know they 20% additional will be fine-tuning and they'll need you know specific video for that. So uh [clears throat] anyway we we the fourth thing I think that we learned which was two additional things. One was um they're interested in raw video and the reason that's interesting is you can't scrape that from the internet. So for us historically we make factual entertainment and typically you might shoot 50 hours to make a 1-hour documentary. >> Oh interesting. So the out takes Yeah. >> Yeah. You got it. And so everything that goes into that is interesting. Fourth thing that we learned which was I think pretty critical as well was okay. Um, I think there's an opportunity here, but what we're going to be we're going to be paid a fraction of a fraction of what we're typically paid for licensing video to, you know, the HBO's of the world or the Netflixes of the world. So, if we're going to make a business out of this, um, we need ultra high volume. And so then it becomes all right how can you kind of aggregate uh and assemble you know a corpus that is you 3 four million hours of really diverse content that runs across you know sports instructional traditional factual HDR you know synchronized video multicam etc. How can you how can you create that corpus um you know in the right in [clears throat] the you know ethically sourced you know completely buttoned up rights way. um how can you how can you put [clears throat] that together and not spend and so I think just as a result of having been in the business for a long time and you know done a whole variety of licensing deals over the years for better or worse you kind of knew how to do that and you have relationships with people who have large libraries and so our proposition was okay you [clears throat] know let us include your content in our corpus right and >> as we go out and license it we will you'll share in that revenue >> well there's a lot in there's a lot in there Clint I want to make sure that I'm keeping up with you and everyone's keeping up with you. So, first of all, if you don't mind, just paint a bit more of a picture of the kind of content we're talking about. I cheated a little bit. I went on your website. I checked out um streaming some of your content. I was caught. What caught my eye was the nature and wildlife documentaries. I've just come back from Safari, so I saw David Atenburgh documentaries, Jane Good documentaries as part of your platform. give us some other specific examples and specific content creators the names of whom might be familiar to our audience just to bring to life what we're talking about here. >> Yeah. So for our subscription services that are you know our our our [clears throat] mission is to help satisfy the world's curiosity through premium non-fiction video that inspires, informs, and entertains. And it's a lot of natural history as you mentioned and uh you know we've worked with David Atenboroough in the past. You know many of us at Curiosity Stream certainly the founder of Curiosity Stream John Hendricks who founded Discovery Channel back in the 80s you know had a bit of a relationship uh with David. So and you know we work with Jane as well and so we've got relationships in that area you know directly and then through also through producers who work with them over the years. So natural history wildlife is part of it which is also sort of uniquely good for for training models and then in addition to what we offer in the subscription services across the factual category it's science it's technology it's travel it's food cooking lifestyle you know one way to think about it is it's a little bit like uh discovery before it went kind of into reality kind >> there got it got it so so that's But but >> that's one piece of the jigsaw puzzle. So we've got a sense now of the content and the kinds of content creators we're talking about. Paint a more detailed picture for us if you don't mind Clint. On the other side of this, >> you know, when you said you've got maybe 60 plus clients, most people think about the models of a handful of major players, OpenAI, Anthropic, um Google's Gemini. >> Can I ask the specific question? Do you have partnerships with all of those? Well, as is probably no surprise, like we have to be very careful about who we talk about specifically having partnerships with. So, I think that um you know what what we've shared publicly is that uh >> uh we anticipate that the majority of our business will continue to come from the top 10, >> okay, >> model developers who are pretty obvious. And then I don't I don't want to just to be clear like we don't have 60 commercial relationships today. We believe that we will you know in the not too distant future but um you know we've done probably you know in the range of sort of 30 distinct fulfillments of uh content for AI training both video and audio primarily video then >> so when we take that and then we talk about your ethical sourcing of content >> what exactly do you mean by that Clint if you're a David Atenburgh and and the production team >> in what way would they say that you have ethically sourced their content. >> Yeah. >> For the licensing. >> Yeah, it's a great question and I think this is something that you know that that we welcome and I think that it helps to distinguish Curiosity Corpus as compared to other people is just it's chain of title basically. It's just having the having the rights all along the way. And so um in our case uh if we if we created a piece of content in the past uh and you know we we engaged a production company on like largely a workforire basis and we maintained you know um all [clears throat] rights all territories all platforms sort of in perpetuity to that piece of content then um you know it's likely that we're going to have the uh the AI rights there in certain cases like if um you know people may have a fraction of that or a part of that and then they need to go back and talk to the talent and get the additional rights. One of the nice things around factual entertainment is you don't have the same talent issues, you know, that you have um with high-end films as an example. And so I think part of the reason that you don't see companies like Warner Brothers or uh NBC Universal or Paramount in this business is there's just there's too many things to work through uh with the guilds with the talent and then you know for those guys is the juice really worth the squeeze? Like we do an eight figure agreement that's a lot for us. That's a meaningful agreement for us. they do it's really not going to move the needle that much but and so I think that is one of the dynamics that uh provides us a bit of a moat and enables us to be a leader in the space >> with a team of banking experts specializing in your industry key bank is always ready to take your call and what's better they relish [music] a good challenge a business challenge a complex challenge the kind that seems to change all the time the kind that's so nuanced no one else could possibly understand says bring it on and They go even further by staying ahead of trends. Keybank has answers before you even know you need them. Business challenge accepted. Learn more at key.com/b2b. [music] That's key.com/b2b. So then let's talk about the sharing of the economics here. You get an 8 figureure agreement as an example. >> You referenced that the Reddit agreement with Google >> opened your mind and your eyes to the odd of the possible. >> That agreement was not without controversy. uh users of Reddit raised their hand and said, "We're not particularly comfortable with the idea that our user generated content is being monetized by Reddit in this agreement with Google, but we the user don't get a cut of that. We don't see any return." >> In your model, how does the creator participate in the economics specifically? >> Yeah. Well, so in our in our model, we're typically paying to the rights holder of that content to the the person, the organization, the company who who controls those rights. We're going to pay them somewhere between somewhere in the in the range of 50%. >> Okay, >> that's the you know, maybe a little bit more, maybe a little bit less with some people depending on the volume of content that that uh that they provide to us, but that's the that's the basic construct. It's not wildly dissimilar to what you see in like the fast space as an example. Um, so that's that's a that's a fairly tried and true kind of uh revshare construct in the media business and everybody kind of understands that and you know having had we have you know hundreds of partners and having had a lot of conversations around this I think lots of people are um you know not surprisingly um slightly uh concerned or you know really want to know more as you get into these conversations. ations around around what this means and um I think as people begin to understand it better uh everybody tends to embrace it more and my feeling is like you know to to use a trit example like you can't resist the tide you cannot resist the tide and and this is the tide and so better to have a seat at the table and be compensated than I think to you know stick your head in the sand and and uh yeah have no idea what's going to happen Next, >> well, as the tides are changing, let's talk about how that business mix actually affects uh Curiosity Inc. and and in turn your share price. Licensing revenue has been growing, you know, close to 50% year-over-year and is expected to surpass the subscription piece of your revenue uh in terms of composition by the end of this year. So, we can see that shift happening. To your point, tides are times are changing. What's interesting though is the composition of that revenue has a different flavor in the eyes of the market and equity investors. Typically equity investors love subscription businesses. It's recurring, it's sticky, it's visible. Licensing revenue tends to be lumpy and it's contract contingent, sometimes transient. Talk to me about how you manage that shift in business risk. >> Yeah, that's a that's a it's a a great point and a great question. And as you can imagine, you're not the first person to ask me that. Not a creative original question, but an important one. >> It's it's the it's it's the core of the issue. If you look at our business, you know what I tell people is just look at our public filings. We have a subscription business that is a reliable, predictable, recurring. You that's 35 to $40 million a year. Um, and we believe that, you know, depending on our marketing spend, you know, that will be flat to sort of, you know, low single percentage growth over the next several years. On the licensing side, um our licensing revenue will exceed our subscription revenue this year. Uh without a doubt. Um and you know through first half of the year it already has. Um there is, you know, incredible opportunity on the licensing side when you just sort of look at the, you know, historic time that we're in, the budgets that these companies have for training, what they're putting toward CAPEX. And so, you know, our approach is, you know, let's build great let's build great relationships with um the companies [clears throat] who need a lot of training data. And then uh often times like whenever you get into something new you don't have um you know lots of existing standards. You're you're kind of you know it's it's wild west and so to a certain extent like you're both kind of making assumptions and sort of making a few things up along the way. Um historically in the licensing business you my approach has been to um let's let's optimize for um kind of long-term relationship um where ne you know certain times as public company you you know you need to see them you need to seize the money. So you may do some things in the near term that you wouldn't do if you weren't um you know if [clears throat] you had a a longer term horizon, but that tends to balance out that tends to balance out over time. So on the licensing side, part of the reason that you can grow that business so fast is because of the revenue recognition rules that exist today. Essentially, if we license a piece of content to someone, >> they pay us a dollar for that. we could license that to them for a five-year term, but provided we've delivered the content to them, they've accepted it, and the term has started, we recognize that dollar upfront right away. And so that's kind of that's so so those rules enable you to grow this pretty quickly. Now we I would argue that um we have sort of de facto recurring revenue in that we have certain partners that we've done anywhere from you know five to 10 uh distinct fulfillment with. >> So let me ask you a question. How much are you seeing sort of independent creators or artists come to you saying work with me to help me monetize my content in a new way? I'm not talking about someone like a Taylor Swift who can frankly pick up the phone to any, you know, to pretty much anyone to try and cut a deal. But, you know, someone between the scale of no social presence or content presence and and the Taylor Swifts of the world. I've got to imagine that there's a meaningful size of creators, right? The creator economy, this idea of independent creators looking to um license their shows to news outlets, for example. How much are people calling you from that kind of population saying, "Help me out. >> Let's work together. monetize me. >> Yeah. Well, thankfully a lot more now. And so, >> as I was telling the story like in, you know, mid to late 2024 when we were first reaching out to people, um, you know, I I had enough close relationships with certain people that I knew I could get, um, certain content and certain commitments. But for people who we, you know, we didn't have necessarily a long-term relationship with, they would say, "Hey, tell you what, Clint, you know, come back to me in six months. We're going to try to do this ourselves." And invariably what would happen is, >> you know, because it is it's just hard. It takes a long time and there's a lot of back and forth and there's a lot of evaluation and not something that I think people in the media business are typically accustomed to. >> We had a number of people who came back six, eight months after that and said, "Okay, take it." Like we tried to do this. It um >> not only did we not get anything done, but it took us away from our core business, which you know, so it had uh had negative impact on us. just take it and send us a check. And you look, our proposition is we do two deals. You're going to make as much money as you would do doing one deal by yourself basically, which is always a good, you know, always a good approach. And so we have a number of people who who come to us and and then we have uh we have a number of partners as well who are essentially distributors who represent, you know, multiple production companies, multiple creators. And, you know, there's no better way to make a friend, I think, than to make them money. So as you you know as you deliver for people they're going to they're going to they want [clears throat] to bring us more. So supply is is not an issue for us at all. We don't anticipate that ever being an issue. >> So I have one last very quick question on the content itself before I want to dig in a little bit more into the financials and the life as a public company. And the content question is you mentioned something about the demand the hunger for raw data and you made uh a comment as you were speaking about how things like documentaries on natural history have a lot of outtakes and that that those outtakes are as interesting to your clients your licensing partners as the finished product is. >> Why is that? What is that? What specifically makes it so interesting? Is is there some sort of funnel where the models want to try to understand what makes the final cut and why? I mean what what's the magic there? >> Well that so that is one use case. Yeah absolutely that that is absolutely use case and so in that scenario then you know they want to look at at scripts and um they want to look at series bibles and understand kind of the process >> uh a toz at the same time um within within the raw data uh we've organized around like certain types of products there. So, as an example, um HDR content, high dynamic range video. And so within that, like why is that more valuable? Well, it's more valuable because it preserves more information about the physical scene uh than the conventional, you know, standard dynamic range. And um it just gives you detail in, you know, really super clear uh format. Um, and it's not that it just looks prettier, but when properly captured and preserved, it just contains a lot more information. I think a, you know, one good example is like an elephant bringing up natural history. So, it's, you know, the models need to understand more than just like what does an elephant look like? You want to know, okay, increasingly need to learn like what does an elephant look like at noon, right? So what does it look like at sunset? What does it look like in the shadow? What does it look like against a bright sky? What does it look like sort of partially oluded? You know, moving between light and darkness and from different camera positions. So, you know, at the end of the day, if you want to be able to provide, you know, products to the world and I'm talking about the you know, Gentai companies who are offering products like you need, you need that. I mean, and uh consumers will demand that as these models get incrementally better. Well, let's talk about how this is translating into numbers for you, Clint. You know, your full year 2026 guidance revenue of 75 to $82 million. Uh, a big positive of your business model and all licensing is those juicy margins. So, we're talking about adjusted EBIT DAR here of 16 to$22 million in your guidance. So, you are still a relatively small business for one that is out there in the public eye. You listed on the NASDAQ. um you you'd fall under the sort of micro cap territory with a market cap of of about $160 million as of at the time of recording, but you know, your your background is impressive. You're CEO of this business. You've made a number of big gun hires recently, a new chief commercial officer earlier this year in February coming from uh NBC Universal and Hulu. Uh you have a new CFO joining uh you who's joined actually early this month in September. It feels to me outside in, but I'm not going to lead the witness that you're gearing up to do bigger things. So, talk to me. Are we talking about M&A in your future? Are we talking about taking the cash from those great margins and aggressively investing behind growth? What are you going to do with the A team you're putting together? >> Well, I appreciate you recognizing that. And, you know, in today's world, I think more than ever, um, a few A players can make a really big difference. Sure. Right. as as we sit here today like if you run a company kind of at any level um one of your obligations is to say like okay you know based on the marketplace based on the AI productivity tools available to us like how do we either you know how do we leverage those to make our existing people three four five times more effective or if you can't do that then um you know do much you got it change the team how do you do a lot more with a lot more with less um >> you know I think it was interesting. I um I'm in LA. I talked to uh uh Luca Ferrari, the Bending Spoon CEO yesterday about just this. And uh I'm a business guy. I'm a media ops guy. You know, I've done a lot of different things. I'm not that kind of uh you know, cerebral sort of >> you know, just incredibly attuned um algorithmic uh data guy as he is. And it's fun to talk to him about how, you know, all of the things that they do to essentially bring out the most in people, which is, you know, exciting. Anyway, I didn't didn't mean to to to dig to digress there, but um when you get into when you more of your business is around enterprise sales, I think that having a few key really good people makes a lot of difference. Obviously, people with relationships um make a difference. And then you know what we have said publicly is that um we think we have a really strong business now. We you know when we first went public we were really small. I mean we're barely you know our revenue was in the teens. You know I mean really really small and put our foot on the gas. We were all gas, no break, you know, spent a lot of money and our strategy was like grow topline revenue, grow subscribers and if you need to raise more money, go back to the public markets and do that, which is okay until, as you know, until you can't, right? And so we did a hard reset kind of the early 24 and said like we're going to become a company that actually um where our receivables exceed our payables, you know, we're we're going to make money and um >> and we're going to grow in a in a unique way. obviously understanding that, you know, the media business is a it's a it's it's a big boy and girl business. It's it's not a business for um super [clears throat] long term if you're small or midsize. So, you know, our intent is to continue to to grow in a really meaningful way. Like we're you know, we we believe that being a company that generates $100 million a year and you know, something north of $25 million in IBIDA is is within our grasp here in the near term. I think people look at a company like that a little bit differently and so we're doing that and um you know we think when when we're in that place we'll do anything and everything that is in our shareholders best interest. >> So I'm going to ask a cheeky question. So so buckle up. Um, okay. >> Because you raised bending spoons and it's funny when I was researching and prepping for our conversation, Clint, I couldn't help but think of Bending Spoons, which just for context for folks is a now public company um which uh takes long-standing old quote digital assets and has breathed new life into monetizing them often by using them for data mining and for AI training. Has Bending Spoons not just knocked on your door to buy you? I mean, they can certainly No, no, not at all. No, but they should know. Not at all. Yeah. No, I I just I've just I've been enamored of um what those guys have done. Yeah. You know, just becoming exposed to them a little bit in the last year. I think they have this, you know, their [clears throat] state admission is to be sort of the Bergkshire Hathaway of >> of media. And you know what they've created is almost like this um it's just kind of an operating system that they can drop underperforming companies or or companies that have you know that would be be you know who might be >> um just not not achieving their um you know what's >> their prime is what I would say. Pass their peak. >> Yeah. Past their peak. you know, I mean, we're living it. It's an I mean, it's I I I'm so thankful that uh I get to live and work in the environment that we're in today because it is extraordinary. I mean, it is just utterly amazing. You know, it every day is is more interesting than the next. Now, what comes with that is like if you're running a company and you know, that's that's not a that's not a transition that everybody can make. And so, you know, it's I think we're, you know, state the obvious. It's it's not wildly dissimilar. I'll date myself here as to when you had tools like, you know, Excel and Word, you know, and email come into the marketplace. Not not everybody adjusted to those. And so, I think that um, you know, today there's just I mean, information's never been easier to get. Um, we've all it's it's never been more small D democratized. Uh, and it's really it's really extraordinary. And so we're focused on, you know, uh, [clears throat] on building a great business, uh, working hard and, um, wherever that leads us is is wherever that leads us. But for the most part, you know, I'm an operator. Our our people are operators. We say like everybody carries a bag. You know, we don't have any just managers. Everybody works. Everybody everybody creates and and produces. And so, um, we just want to, uh, continue to continue to grow, continue to do the right things day in day out that make us a a solid uh recurring, reliable, durable company. >> So, my last question for you, Clint, and we'll wrap with this one, is about what it is like to do this as a public company because you're not you're not in a turnaround, but you're in a pivot and those are notoriously difficult to do when public. Look, you're in your IPO is in 20 you went public in 2020 via spa >> and you and many companies like yours in that vintage of the go-go days of spa acquisitions have struggled to get your share prices back up to where they were. You're you're over 70 70% down since the spa merger. as you have the benefit of hindsight now, would you have chosen to stay private for longer, which by the way many tech businesses have chosen to do? >> Yeah, I mean with with the benefit of hindsight, of course. Um, >> of course. Okay. >> Well, with with the with the benefit of with the benefit of hindsight. Now, that said, um, >> uh, you know, there are that said, like we don't want to be private now. like we think we run a pretty good, you know, uh, public company and, you know, look, our our share price, you know, climbed to $7 last year and it came back and, you know, I I would say and investors would tell me not for any operational reasons, you know, for reasons outside of operational uh, performance. So, you know, our belief is that if we continue to uh perform from an operational standpoint, like we're going to get that back and uh and you and well, we just we just believe that we will get that back. At the end of the day, if we, you know, uh for a long time continue to improve operationally, post good numbers, and can't get that back, then, you know, that's a problem. >> That's a different story. Well, there's a lot going on. you know, you're you're doing something creative with your corpus of content. You're striking creative um >> uh new partnerships and look, this is hard to do. I often say these things you read about in people's filings and their presentations. Translating the words into day-to-day blocking and tackling is no easy feat. So, Clint Stitchco, president and CEO of Curiosity, Inc., come back because I'm very curious um to understand how it's all panning out over the next six months or so. There's a lot going on in this peak AI training season. Thanks for joining us. >> Thank you so much for having me, Ann. It's just it's a delightful time to be uh alive and operating. >> Thank you, Clint. I'm Anne Bry. Thanks for tuning in to After Earnings, the show that brings you up close and personal with the executives behind the world's most interesting publicly traded companies. If you learned something today, don't forget to [music] like, subscribe, and share with your friends. We'll see you next time.