TKO Group Holdings Inc (TKO) 2006 Q1 法說會逐字稿

Welcome to today's teleconference. (Operator Instructions). Please note, this call may be recorded. (Operator Instructions). I would now like to turn the call over to Mr. Michael Weitz. Mr. Weitz, you may begin.

Thank you. Welcome to World Wrestling Entertainment's first-quarter conference call. My name is Michael Weitz, Vice President of Investor Relations and Financial Planning at WWE. Here with me today are Linda McMahon, our CEO, and Michael Sileck, our CFO. We issued our earnings release earlier this morning and will be referencing our presentation as part of our discussion. These are available on our corporate website at Corporate.WWE.com.

We will be making several forward-looking statements today as part of our discussion. These statements are based on management's estimates. Actual results may differ due to numerous factors as called out on page 1 of the presentation and in our earnings release.

Today, we will review our operating highlights and first-quarter results followed by a Q&A session. As a reminder, in June, we announced our Board's decision to change the Company's fiscal year-end to a calendar basis beginning of calendar year 2007. This change resulted in an eight-month period through December, which we refer to as our 2006 transition period. At this time, I would like to turn it over to Linda.

Thank you. Good morning, everyone. We appreciate your joining us today. This is an exciting time for the Company, and we are encouraged by how the year has started. During our last earnings call, we highlighted management's focus on investing and positioning the Company for long-term growth. At the same time, we underscored the importance of managing our businesses to achieve strong near-term results. As the year begins, we have made important progress on both of these goals. We delivered solid results in the first quarter that put us on track to meet our transition period financial expectations, while we successfully relaunched our ECW brand. In addition, we introduced a new WWE Magazine, which early indicators suggest has been embraced by our fans, and we continue to invest in our digital media businesses.

Before discussing our progress on ECW and other strategic initiatives however, let me start by sharing some perspective on our current results. We posted earnings, which are in line, with an outstanding first quarter last year where we delivered 46% growth in net income. The current quarter's solid performance was led by the robust growth of our home video business. It also drew strength from the favorable trends underlying our domestic live events and expansion of our television platform with the launch of ECW. Growth in these areas offset the anticipated absence of domestic television ad sales that resulted from our deal with USA Network.

Our home video business delivered one of the best quarters in its history. For the first time, the business shipped more than 1.1 million units in a quarter, representing a 55% increase over last year. Further home video increased revenue over 70% from the strong performance in the year-ago quarter, while again raising its profit margin by several percentage points. Our WrestleMania 22 DVD, which was released in the current quarter, shipped more than 345,000 units and became the best-selling DVD in WWE history. In addition, the sales of titles from our catalog increased by almost 300,000 units. These results reflect successful efforts to monetize our video library and to expand our distribution both domestically and internationally.

Our domestic live event business also contributed both revenue growth and increased profitability to the quarter's results. Average attendance at our North American live events increased on a year-over-year basis for the sixth consecutive quarter with a 15% increase to 5,300 in the current quarter. Average attendance at our televised live events reached 7,300 for the quarter, the highest level since the first quarter of 2003. As a result, we increased the profit margin of our North American live events by almost 5 percentage points. We believe that our zone strategy for routing live events will continue to sustain higher attendance and to improve operating efficiencies.

It should be noted that the overall performance of our live event business in the first quarter was impacted by the timing of our international events. This quarter, we held two events, both in emerging markets in Latin America, the Dominican Republic and Panama, compared to seven events last year in more established markets, namely the UK, Ireland and Japan. Looking forward, we expect to accelerate our international touring, focusing on established markets as well as territories where we continue to strengthen our television platform, such as Spain and Mexico. These feature events include a recently-completed August tour in Australia that attracted almost 33,000 fans, three events and a 16-event tour in Europe planned for November. Overall, we are pleased with our results in the first quarter.

Now, let's turn back to our long-term growth initiatives. During the quarter, our management successfully executed an ambitious campaign to relaunch ECW as a new brand. The launch of this brand included an ECW branded pay-per-view event, a live event tour and a 12-week summer run on the SCI FI Channel. The premiere episode of ECW brought 1.8 million new viewers to the SCI FI Channel. Since it began airing in mid June, the Tuesday night program has attracted an average 2.8 million viewers each week and has consistently been the top-rated regularly-scheduled program on the SCI FI Channel. We are delighted that based on its popularity, the SCI FI Channel will continue to broadcast ECW television programs through December of 2007.

In addition, we held seven non-televised ECW live events this quarter with attendance tracking essentially in line with our expectations. Our experience to date reinforces our belief that there is strong consumer demand for this unique form of entertainment. Over time, the new ECW franchise should provide a vehicle to further utilize and develop new superstar talent to increase our international touring capabilities and to enhance revenue for this brand through additional pay-per-view events, home video, and other consumer products. We continue to expect this new venture will achieve at least breakeven results this calendar year and should build value over the long-term.

Now, let's turn to an update on our digital media initiatives. Coming into this year, we laid out two overarching goals for this business segment, namely to increase revenue from our website and to develop a wireless platform for our content. Over the past 12 months, revenue generated by our e-commerce business, WWE Shop, has grown by more than 140% as traffic to our website has increased by about 75%. Our success in monetizing the high level of traffic to our website reflects in part the short sales cycle in this business. By selecting merchandise carefully and by targeting promotions at our core customers, we have been able to grow our merchandise orders significantly and quickly. During the quarter, for example, we generated 69,000 merchandise orders, which represented an increase of 68% over the prior year. Moreover, by executing smartly, we have been able to sustain a relatively constant proportion of buyers as traffic has increased. As a result, revenue growth for this business has exceeded our expectations.

While our e-commerce activity has surged, the development of our online advertising business is ongoing. Unlike our e-commerce business, the sale of online advertising is characterized by a much longer sales cycle. The good news is that traffic to our website, measured by unique users and video downloads is strong. Looking forward, our aim is to enhance our selling efforts and to partner with new advertisers. We expect this will enable us to take part in the strong growth trends in online advertising.

Finally, regarding our wireless platform, we made significant progress during the quarter. Working with new partners, we completed much of the back-end infrastructure to support this emerging technology. Further, we have recently completed several agreements to provide video and other content to wireless partners in Europe and Asia. Our recently-completed Diva Search Contest recorded several hundred thousand votes from our fans via mobile phone. The Company generated net revenue of approximately $0.50 per vote over our six-week competition. We believe this response demonstrates some of the potential for this business.

Overall, we continue to view digital medium as a significant opportunity for the Company and we are committed to realizing the value of these businesses. In conclusion, I would emphasize we're off to a great start in this transition period. We are working hard to position the Company for the long-term, so we expect to maintain and sharpen our focus on successful execution as we go forward.

Now, let me turn it over to Mike Sileck, our CFO, who will put a little more context around my general overview.

Thank you, Linda. As Linda has mentioned, our results for the first quarter were solid. Revenue and operating income matched the strong first quarter last year, reaching 93 million and 15 million respectively. Growth from our home video and e-commerce businesses offset anticipated declines in domestic TV advertising and pay-per-view revenue. As we have previously discussed, the quarter reflected the anticipated absence of domestic television ad sales as a result of our deal with the USA Network. The impact of this deal in the quarter was an $8 million reduction to revenue and a $5 million reduction to income. Excluding this impact, revenue and gross profits increased about 10%.

Page 5 of our presentation lists the revenue and profit contribution by business unit as compared to the prior year. Revenues from live events, including merchandise sales at these events, increased by about $1 million, led by our North American events. Gains in average attendance and the addition of 14 events more than offset the timing of our international events and the ECW's impact on probability. During the quarter, we held seven ECW events in smaller venues, which provided our fans with a unique experience. These ECW events attracted an average attendance of approximately 1,000 and an average ticket price of $26, essentially in line with our launch plan. Overall, the profit contribution for live events was virtually flat to last year at about $5 million. For the remainder of the year, our plan calls for 30 to 35 international events compared to 25 events in the comparable period last year.

Turning to our pay-per-view business, revenues for the quarter declined 1.7 million or 8% from last year. This decline reflects the impact of airing one less event in the quarter as we produced four pay-per-view events in the current quarter compared to five events last year. The additional event backlash generated 4.3 million of revenue and $2.1 million of profit in the first quarter last year. Excluding the impact of this event, revenues increased 15%, reflecting a 4% increase in buys and a $5 domestic price increase that was initiated during the quarter with our ECW One Night Stand pay-per-view. This represents our first pay-per-view price increase in more than four years. Reflecting the enhancement of our television platform overseas, international buys in the quarter comprised 40% of the current period total as compared to 28% in the prior year.

In our consumer products segment, our home video business continued to deliver strong results. Home video revenue increased 71%, reflecting a 55% increase in gross units shipped of approximately 400,000. Sales were led by the release of our WrestleMania 22 DVD, which has shipped over 345,000 units to date. The quarter produced a record level of shipments, which drew strength from both new releases and catalog titles. We believe the growth generated by this segment over the past year is due in part to the development of strong relationships with our retail partners that will have ongoing value.

Revenues from our licensing activities decreased 25% to 5.6 million, primarily due to lower royalties earned from our video game and novelty products. Sales of our WrestleMania 21 video game generated 1.5 million in incremental licensing revenue in the first quarter of last year, while no new games have been released in the current quarter. The next release of WWE licensed video games is expected in November with the release of SmackDown! vs. RAW 2007 for the PS2, PSP, and Xbox 360 platforms. The decrease in the novelty category was driven by lower international sales, particularly in Italy, which had previously experienced an exceptional level of activity. The international decline was offset in part by increased domestic sales across various categories.

Our digital media segment, comprised of online advertising, e-commerce and mobile businesses delivered revenue growth of 51% compared to the year-ago quarter. Revenues from the sale of merchandise on our Internet-based storefront, WWE Shop, increased 83% compared to the prior year with orders processed increasing by 68% to 69,000 orders. Along with the large volume increase, the average sales per order also increased by approximately $5 up to $47.

Revenues from our other digital media businesses increased 24% to 2.1 million, reflecting growth from both our online advertising and mobile businesses. We continue to build our online ad sales infrastructure and to monetize our high level of Internet traffic. For the quarter, we averaged 15.8 million unique visitors and 44 million video streams per month compared to approximately 9 million unique visitors and 23 million video streams per month in the first quarter of last year.

Our profit contribution margin for the quarter was 43% compared to 44% in the prior year. The 1 percentage point decrease versus last year primarily reflects the absence of high-margin domestic TV ad sales. This was offset in part by the increased profit contribution from our home video business.

SG&A expenses were $22.5 million in the current quarter, down slightly to the first quarter last year. Operating income for the quarter was about 16 million, essentially even with the prior year. Page 14 of our presentation compares the year-over-year results and provides a summary of changes by business. Page 15 of the presentation contains our balance sheet, which remains strong. On July 28, we held $264 million in cash and short-term investments with virtually no debt. During the quarter, we spent nearly $13 million on the production of our third feature film, The Condemned. To date, we have recorded 49 million in feature film production assets. As we have stated in past calls, these assets will be amortized on a pro rata basis as revenues are recognized in accordance with generally accepted accounting principles.

Our first feature film, See No Evil, was released on May 19 and generated approximately $15 million in gross domestic box office receipts. The film is currently being distributed in international theatrical markets by our partner, Lions Gate. A domestic DVD release is expected in November. We do not anticipate realizing any revenues from See No Evil, from our other films until calendar year 2007.

For the quarter, we generated a free cash flow deficit of about $1 million compared to a positive free cash flow of 21 million in the first quarter last year. The change reflects our increased feature films investment as well as changes in our working capital.

Looking at the transition period outlook, as mentioned in our last earnings call, we're changing the Company's fiscal year-end to a calendar basis beginning with the 2007 calendar year. The business outlook for our eight-month transition period through December 31, 2006 and key underlying assumptions are outlined on page 16 of our presentation. We continue to expect modest revenue growth from the 248 million in the comparable 2005 period. In addition, we anticipate bottom-line results approximately even with the $30 million of net income and $0.43 of earnings per share in the comparable period last year.

That concludes this portion of our call, and I will now turn it back to Michael Weitz.

Operator, we are ready now. Please open the line for questions.

(Operator Instructions). Robert Routh, Jefferies & Company.

Good quarter, guys. A few quick questions. First, I believe you commented a little bit on your Sony distribution deal and as far as when that comes up for renewal because I believe it comes up fairly soon and whether or not you think that given the success of your home video product, you can possibly get a better deal than what you currently have.

And second, I was wondering if you'd comment a little bit on sports programming because what we found is retailers are now looking for more sports programming because it's not seeing the decline that the live-action animated DVDs are seeing from the retailers' point of view and they are asking distributors to get more of that. I would think that that would impact you guys very positively going forward. So if you can give us just a sense as whether you are seeing the same thing and how much of your catalog you still have yet to put on DVD and look to monetize.

Robert, that was a long question. Let me start first by saying that yes, we are in talks with Sony. We are continuing right now with our deal with Sony. Actually, the expiration date has arrived on that deal, but we are continuing our negotiations with them on this current deal. We're talking to others as well. So I think we will have an announcement for you pretty soon on that. We've been well pleased with the relationship we have with Sony. They have clearly learned our business. They are working very well with our retail partners; a big one of which is Wal-Mart. I think we've got that system down pat pretty well. And as we are moving for our distribution throughout the mass market areas, Sony is doing a very good job for us. So I think that's all moving in very positive directions. I am very pleased with that.

Relative to what part of our catalog is still available, we've only just used a very small part -- well, of our total library -- of our catalog, which continues to build because now we are through sort of a down period that we had as a result of the ongoing litigation we have with the Worldwide Fund for Nature. And we had a great part of our catalog impacted at that point. It's taken us a while to rebuild it. We are there now and continuing to add to it and are seeing the results, not only domestically but internationally as well. So I think that's all -- it all bodes very well for our continuing DVD business.

Pretty typically I think -- I don't really know how the industry has done overall relative to sports. But I think that our business does see positive impact from retailers wanting to look more at sports titles. But we've been pretty consistent in the retail marketplace. I believe that it's through our efforts of marketing promotion and delivering the right titles that is making our business grow. It just shows that we are repurposing either video that we've already paid for, we're utilizing more of those libraries that we have purchased and we continue to have a really good outflow for our DVD product.

Just two quick other questions. The first -- and I understand if you can't comment on -- if you could give us any update on the JAKKS Pacific/THQ situation and second if you could just hit on the video-on-demand homes that you have now and how they have been performing with WWE 24/7.

I really can't comment much on the JAKKS/THQ litigation except it's what we're putting out in our public statements, which suggests that the litigation is ongoing. But as I've stated in our other calls, we do continue to do good business with JAKKS/THQ because we're both obligated under contracts to continue to do that business. So it's -- the working relationship can be a little bit strange at times. But I think given all of that, we are clearly delivering good product into the marketplace. And it just continues to move at this point though slowly.

Relative to the video-on-demand subscriber base, with the addition of Comcast, that has increased our overall penetration to about -- to a little over 50% of the available universe. By our calculations, the available universe is somewhere around 30 million homes; that's a little bit of a round number. And we are in more than 50% of those homes at this point. All right?

Great. Thank you very much.

Michael Kelman, Susquehanna.

I have two questions. One, can you talk a little bit about the home video pipeline for the remainder of the calendar year? And then the second question is on pay-per-view gross margins. They look to be pretty strong in this quarter, I think somewhere around 60, closer to 70%. And that's obviously a big improvement over the fiscal fourth quarter. Can you talk a little bit about where gross margins should trend in that business?

Sure. Relative to the slate of home videos kind of coming up, we talked about that -- the big ones coming up are Mr. McMahon, which is just hitting the street now. We have high aspirations and expectations for that. In addition to that, we have Hulk Hogan coming up later in the year. We also have the history of the WWE championship coming up. In addition to that, we have our usual release of our pay-per-view titles, including SummerSlam, Great American Bash and Unforgiven. So we feel very good about the momentum that we have. WrestleMania 22 was huge for us and it continues to sell. But we also think we have some real bench strength that is coming online now in this quarter and the rest. The other thing that we have added is something to take advantage of the large popularity of generation -- the DX. We're also getting a DVD out on that later this year as well. So we feel good about that.

I think your other question had to do with margins regarding pay-per-view. There was a significant amount of investment in marketing, particularly international marketing, in the fourth quarter of last year. And the timing is such that we have not had that high of investment in the current quarter. So I think that explains the margin difference. Okay?

One other quick follow-up. With regards to the live event attendance number that you give, the average of 5,300 domestically, does that include from ECW or is that calculated separately?

That does include ECW.

So actually if you looked on an apples-to-apples basis, your domestic attendance would actually be even better?

That's correct.

That's correct.

Alan Gould, Bleichroeder.

I've got a number of questions. If I could just follow-up on Michael's last one, do you have the comp, the apples-to-apples comp, excluding ECW on North American events?

It was approximately 5,700.

Approximately 5,700.

Right. Just do the math. There were seven events and we averaged roughly 1,000 per event.

And also, Linda, the guidance has not changed since prior to the quarter this quarter -- beat, as you said, your own expectations, the Street's expectations. I believe this was the last full quarter of the tough comp with the ad revenue. Are you just being conservative or are there certain investments planned in the digital media space that we should be taking into consideration?

I think we are being pretty realistic in our outlook for the balance of this transition period. We try not to be overly conservative, though we are a conservative company by nature. We are continuing to make investments in our digital media business, both in content as well as overhead as well as infrastructure to support the sales. But I do think that we are holding steady, which I think is a good number for us for the balance of this quarter -- for this transition year.

I would just add to that that when you look at the comps kind of for the second quarter and then the two-month period that we will have that will get us through December 31, there's some tougher comps in the quarter coming up, particularly related to we'll still have the absence of the domestic television advertising. But also, there was some legal settlements that were in the year-ago quarter -- over $3 million worth -- that will not be there of course in this upcoming quarter. So, that kind of helps balance it a bit. Okay?

Then also, the digital media -- it was a great quarter -- but the digital media, you had the streams were down versus the last two quarters and the dotcom revenue was down. Anything going on there?

I can tell you why the streams were down. We actually made a concerted effort when we really looked at the cost of streaming and what the benefits of those streams were, and we actually made fewer streams available during the quarter because of the cost of streaming. We were not yet turning and monetizing those streams as we will be doing at a greater degree later in this transition year. So it was a conscious decision on our part to reduce the number of streams that were there. But we continue to increase our unique visitors to our website as well as just our overall page views.

So our digital business is really growing. It's lagging longer than I had hoped to get those sales revenues up. But, you know, we are pushing it. We've done a lot to our content folks by -- we added ECW, so we created a whole site there. We created a whole site for our diva, so we've added a lot of content enrichment to the site. And so, we're catching up to monetize those new content areas.

That makes sense. My last question is in the film area. Can you tell us where your current strategy is? Are you going to wait to see how The Marine does before you decide whether to commit for more films after The Condemned or where does the Company stand on that?

We have other projects in development. We have two other scripts in development. We're not going forward just yet with those. We're polishing those scripts. Our strategy has not changed with our film deployment. I think we have been consistent and strong. We've kept our budgets low. We've had distributors in line before we started production. That was the same as in the case with The Condemned. The Condemned principal photography now has been completed. We did that in Australia. We're in postproduction now with that in L.A. to deliver to Lions Gate I believe it's March of '07. So, we will look to them to decide the proper release date, which we expect probably summer or fall of '07.

We don't want to just sit and not have things in the pipeline. We do want to plan for success, but we are conservative being flexible enough also to react to not as positive a response as we expect. I think See No Evil did exactly what we had thought it would do on its release domestically. We had the DVD coming out pretty much for the end of November. We have had what Lions Gate felt was good success in what we're doing so far, launching internationally. And so we are pleased with all of that. It seems to be going in the direction that we want.

The Marine will be coming out October 13, and we've really gotten good buzz, good response from our trailers. The tracking that's in place so far, Fox has indicated is good and strong. And they are planning from what we have been told to a wide release for The Marine.

So all those indicators are very positive, but our philosophy of our strategy has not changed. We keep the budgets low. We right now have projects in development. We're not going into production with our next one until we feel all the t's are crossed and the i's are dotted. We're still looking to produce made-for-television movies as well as direct to DV (sic). And we do have projects in development and pretty much almost final scripts for a couple of those areas now. So we are on target I think with our strategy and our development of our film projects.

[Michael Safransky], Harbridge Capital.

I wonder if you could comment a little bit about the video-on-demand, what you're strategy is there and whether or not it would cannibalize your existing DVD sales?

We certainly don't expect it to cannibalize our DVD sales. Our products that we're putting on 24/7, some original, some are repurposed to video that we already have. Our strategy has been all along that we replenish and give fresh content on a monthly basis for our 24/7. We're continuing to press for the rollout with the MSOs. Comcast was a major MSO to bring onboard, and we're very pleased about that.

What we are finding in the marketplace is that our churn rate -- even with churn rate, we continue to add new subscribers. We're hearing feedback from the MSOs that from all of the content that they are posting on 24/7, we clearly have the largest downtake in that. They are very pleased with our refreshment programs, and they are using those to drive sales of also their boxes. So all of those are very good indicators to us that our strategy is working really fine for 24/7. We were in the marketplace a little ahead of the curve because the MSOs really weren't ready for their launch, and their launch had been delayed in some areas which have put us back a little bit. But we are pleased with the product we've put out and the reception it has gotten.

But what is the business model? How are you making money then with the MSOs that way? Is it--?

It's a revenue share.

It's a revenue share.

Right.

(Operator Instructions). James Clement, Sidoti.

A couple of questions. The October quarter, is there going to be a Taboo Tuesday event this year?

Yes.

Will that be in the October quarter or will that be a November -- a month of--?

Actually, let me back up. It's changed though. It's not called Taboo Tuesday. It's called Cyber Sunday, putting that pay-per-view on a Sunday instead of having it on a Tuesday because we think that is more in keeping with our -- did I misspeak? Is it--?

No, you're correct.

It's more in keeping with our other pay-per-view business of driving viewership on Sunday. So we think we'll have broader audience for it on Sunday.

Will that be an October quarter event, or will that (multiple speakers)?

That's a November event.

So you will have three pay-per-view events this current quarter, which is the same as last year. You will have SummerSlam, Unforgiven, No Mercy, right?

Correct. And that's where we have four in the two months -- November/December period, we'll have four pay-per-views.

Regarding the announcement of the 24/7 deal with Comcast, the revenue splits that you are getting -- and you don't have to speak specifically about Comcast but just overall -- are you getting a better revenue split than some other VOD type of arrangements that are out there in the market because of your unique content or is it somewhat similar to what other industries or other forms of entertainment are seeing?

We're not privy to other deals that are in the marketplace, but I would have to say probably in general we're pretty much in line.

The last question, Linda, by historical standards -- and obviously, there have been channel switches and night switches and that kind of thing -- SmackDown's television ratings are not what they once were. Yet still, your SmackDown-oriented pay-per-view events still do very well. I don't know; is that a little bit of a surprise to you? I guess the more meaningful question that I would like to ask is, do you feel that SmackDown is maybe not being utilized optimally? Do you feel that there are maybe some steps that you can take to kind of build that brand even a little bit beyond where it already is?

It's a very good question. We are seeing -- there has been some decline in the ratings and as you said and as you mentioned, the switch to Friday nights. But in the switch to Friday night in a lot of markets also means we are preempted with a replay on Saturday because of the heavy baseball schedule. As we relaunch on CW starting at the end of this month, we will have fewer preemptions with sporting schedules. So we think we have an opportunity to continue to build Friday night. But as I maintain with all of the public that we deal with, clearly -- and our investment that we talk to, the success of any brand is really built around the creativity -- those superstar talents, their attractiveness in the marketplace, how we build them, how we promote them. We've had some switches and some changes on SmackDown, and we are rebuilding that. That's part of what ECW helps us do. It's part of what our development territories help us do. So I think yes, we are working to increase those ratings clearly for us and our partners. But we are also looking forward to the relaunch on CW, which gives us less jumping around on Friday nights.

Excuse me and just to add one other thing too -- in some markets, being on CW is going to give us a better penetration that we have better stations in markets, even though the coverage has probably been about the same but there is better station penetration. So we are really looking forward to that and have real good marketing promotion meetings so far with our CW folks, who will be part of their primary launch party on September 18. So all of those are good indicators for us.

Operator, we will take one more question.

Robert Routh, Jefferies & Company.

Just one quick follow-up. Based on the growth you've seen in the Internet and what we've heard from other companies we look at like Marta Stewart and what they see as the potential for that, obviously it is a low base but it seems based on what you're doing that could be more than a material growth driver going forward. I'm wondering if you could give us any sense as to internally what you guys are thinking in terms of percentage growth over the next several years you could see out of that particular distribution medium because it does access both the international and domestic markets if everything goes according to the plan that you've laid out.

I would be taking such a wild guess. Mike, do you have more context around that?

What we would say is our goals and our hopes are to grow that area 50 to 100% on an annual basis over time. That's comparable with what you see other Internet properties grow at. We have to ramp up to that kind of growth obviously. And as you mentioned, the base currently is relatively small. But it's those kind of growth rates -- are what we hope to be able to achieve over the coming years.

Thanks, everyone. We appreciate you listening to the call today.

Thank you. Have a good day.

This does conclude your teleconference for today. Thank you for your participation. You may disconnect at this time and have a great day.