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Fireside Chat with COO James Colquhoun

Gaia is a subscription video on demand (SVOD) company, but COO James Colquhoun told us that Gaia sees itself more as a Software-as-a-Service (SaaS) company, providing its members with not just entertainment like most SVOD companies, but rather “edutainment”. Members come to Gaia to help deal with many life challenges, such as anxiety and stress, often linked to mental or physical health. Gaia’s programming provides hope, inspiration, and sometimes a second opinion regarding specific challenges. This report contains a transcript of the fireside chat from October 17, 2023, which can be accessed on demand per the link in our full report below. This type of content has a much longer productive life than most entertainment offerings. While typical entertainment offerings often see big drops in revenue after the first year, Gaia’s titles have much longer productive lives. Gaia’s programming is also much more predictable in its performance, unlike entertainment programming, which tends to be either boom or bust. Gaia groups its offering in three major categories: (1) yoga, meditation, and natural healing; (2) transformation, personal growth, and spiritual growth; and (3) alternative history, seeking truth, and the unexplained. Users of the first and third categories tend to focus their usage in these specific categories, while users of the second category are more likely to venture and try other programming. Gaia’s production plans are primarily data-driven, focusing on a specific content’s completion rates (do members watch the whole episode), ability to attract new members, and retention rates associated with members watching that particular content. Added to these data-driven factors are Gaia’s experience and ability to anticipate the emergence of longer-term trends. Gaia’s international revenues are about 35% of total revenues, compared with 55-60% for more mature SVOD platforms. Gaia believes it should reach that mix within about five years. An important external factor that is helping the growth of the business in 2023 is a reduction in online advertising pricing, leading to a drop in member acquisition costs. It appears that many heavy online advertisers have had to reduce their marketing spend (often companies with cash flow-negative business models) and Gaia has been a beneficiary of this development. This favorable development has also allowed Gaia to focus on acquiring members with higher expected retention rates. Internally, Gaia is focused on ARPU growth and rising gross profit per employee metrics. ARPU growth should be helped by increased sales of premium memberships and by the launch of the Gaia Marketplace. Gross profit per employee metrics should continue to improve as Gaia believes its revenue growth can greatly outpace its G&A growth.