Good day, and thank you for standing by. Welcome to the Chicken Soup for the Soul Entertainment fourth quarter 2022 earnings call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. I would now like to hand the conference over to your speaker today, Zaia Lawandow, Head of Investor Relations. Please go ahead.
Thank you, Kevin. Good morning, and thank you all for joining us. We'll begin with opening remarks from our Chairman and Chief Executive Officer, William J. Rouhana, followed by remarks from our CFO, Jason Meier. After their remarks, we'll open the call for questions. The matters discussed on this call include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors. This includes the factors set forth in Chicken Soup for the Soul Entertainment's most recent annual report on Form 10-K and in our most recent recently filed quarterly report on Form 10-Q. The company undertakes no obligation to update any forward-looking statement.
Please refer to the earnings release under the News and Events tab in the investor relations section of the company's website for a discussion of certain non-GAAP forward-looking measures discussed on this call. With that, I'll turn the call over to William Rouhana, Chairman and CEO. Will, please go ahead.
Well, thank you, Zaia, welcome everyone. Thank you for being flexible as we had to adjust the timing of the call in order to take advantage of the opportunity to raise a bit of capital, as you saw in our filing this morning, and I'll discuss that in greater detail in a moment. First, let me talk a little bit about the past year. 2022 was a year of transformation, not only for our industry but for our company as well. Total annual revenue for the company was $253 million, up 129% over last year, and Adjusted EBITDA was $33.5 million, up 53% in the same period.
We hit our revenue run rate of $500 million in revenue and $100 million-$150 million of adjusted EBITDA as we planned. When we started the year, we had about 170 employees. Seemingly overnight, we found ourselves with over 1,300 when we acquired Redbox. Integrating a company several times larger than us was no easy feat, particularly one dependent on the return of theatrical releases. Despite the challenges we faced, we were able to position ourselves successfully for continued growth in 2023. As we look forward, there are many opportunities for us to scale our business further and continue growing, all driven by three pillars. One, the Redbox integration and the kiosk rebound that is currently underway. Two, our position as a premier advertising sales platform for the broader AVOD industry.
Three, sufficient working capital that supports the growth we expect in 2023 and beyond. As I'll discuss in a moment, the return of theatrical titles is firmly underway. This return, however, began in earnest months later than we had anticipated when we acquired Redbox. When looking at 2022, there was only a small trickle of big budget wide release hits that broke the year-long theatrical drought. Films like Top Gun: Maverick, Black Adam, and Black Panther: Wakanda Forever. The frequency of the releases was sporadic and very slow. We were still seeing extended weeks with no major releases. To give you some context, that's only three major event films from August through February. As you all know, the kiosks depend equally on the frequency of major releases as they do on the volume of those releases. The frequency of major releases is finally here.
After waiting for years, big movies are back in the theaters every week. Beginning in February this year with the theatrical release of Ant-Man and the Wasp: Quantumania, we expect at least one new major wide release every weekend for the rest of the year. It's like the floodgates have opened, and the studios are rushing to release as many films as possible on available weekends. In fact, the 2023 theatrical slate is one of the most impressive in terms of content and volume in years. Some of the highest grossing film franchises of all time are slated to release their latest installments this year, including films like Indiana Jones and the Dial of Destiny, Fast X, Transformers: Rise of the Beasts, and Mission Impossible: Dead Reckoning. There are many others.
We already see the positive impact on rentals as these films move from theaters to kiosks and TVOD. The average weekly rentals at the kiosks in March are nearly twice those in the month of February. Rentals per kiosk per day, our version of same store sales, also jumped in March and are now over 40% of 2019's level. We expect that to continue to grow. In line with our expectations, we expect to see the early impact of the theatrical rebound begin in Q2 as those films arrive in the home video window following a 4-6-week theatrical run. For those doubting the pent-up demand for audiences to watch these films in the theater, all you have to do is look at the theatrical performance of recent releases like Creed III, Scream VI, and John Wick: Chapter 4.
All of these films set franchise record-breaking opening weekends. Creed III had the biggest opening weekend of any sports film in history. Even when looking at the Super Bowl ads this year, with 11 film trailers shown, nearly double the amount during last year's Super Bowl, you could see the evidence that the theatrical business is back. As studios spend millions on P&A marketing these films, we stand to benefit from consumer awareness as the films leave the theatrical window and enter the home video window. By the way, it's important to highlight the value of the home video window. We are a dominant player in that window, which includes rentals and sales of physical DVDs and digital TVOD. An industry study recently showed that studios generated about $7 billion a year from the home video window.
Even during the pandemic, studios generated $5 billion a year, underscoring the window's resiliency. As we all know, studios are obligated to maximize the value of their films for stakeholders, including talent and producers, and can no longer justify skipping such a valuable window. As they realize this, we stand to benefit because we are an important participant in that window, both in physical DVDs and TVOD. As a reminder, we operate one of the largest TVOD platforms in the industry. The second pillar of growth for the year comes from our premier ad sales platform, through which we are cementing our leading position in the broader advertising ecosystem. You might have seen a press release yesterday from the IAB announcing this year's lineup at the NewFronts, and it would have included a name you might not have heard before, Crackle Connex.
I'm happy to announce that we just launched Crackle Connex, a unique and fully scaled in-house media company that represents not only our own ad inventory, but also that of third-party clients. What we used to call Ad Rep Partners . Led by our Chief Revenue Officer, Philippe Guelton, and President of Ad Sales, Darren Olive, Crackle Connex will connect brands with consumers. We also announced today a significant milestone as we accelerate our growth across the advertising ecosystem. Crackle Connex now represents 20 Ad Rep Partners . By the way, that's up from two last year. Together, they reach 80 million monthly active viewers, 60 million of which come from our owned and operated platforms, which is up from 40 million. 20 million come from our Ad Rep Partners. We're excited to capitalize on the growth we've seen over the year representing our AVOD partners in the ad ecosystem.
We look forward to sharing more on Crackle Connex in the coming weeks, leading to our presentation at NewFronts in May. During the quarter, we saw strong growth across our owned and operated AVOD platforms. In December, we saw a Redbox AVOD usage hit an all-time high, driven by the highly curated content slate, including The Expendables film series, which accounted for the best title performance on Redbox ever. Holiday content was also a huge hit, with our Screen Media-owned film, Elliot: The Littlest Reindeer, it's one of my favorites, maintaining its position as a top-performing title on Redbox AVOD and Crackle AVOD. Crackle MAU growth was driven by our ongoing strategy of meeting consumers where they are across connected TVs in Crackle and Redbox branded remotes.
Finally, the Chicken Soup for the Soul AVOD continues to be our fastest-growing AVOD, with growth reflecting the launch of FAST channels and new apps, which I'm pleased to announce just launched on Roku. Overall, direct CPMs were up modestly year-over-year, and fill rates remain in the 80%-90% range. December was about 29% over the prior December, consistent with the results we saw in Q3. As more viewers and brands converge on AVOD, we are well-positioned to continue capturing that growth this year. Our FAST networks continue to perform very well, including our owned and operated channels, which are syndicated to third parties like Roku and Samsung.
We recently expanded our offering of third-party content by partnering with industry-leading media outlets, including QVC and Allen Media Weather Channel, bringing a Local Now, bringing our total number of FAST channels to over 160. having one of the largest numbers of FAST channels on any service. Our TVOD business is already benefiting from the return of theatrical titles. In fact, this past Tuesday was our biggest day in TVOD ever, driven by the release of Avatar: The Way of Water. TVOD orders in the fourth quarter were up 6% year-over-year and up 13% sequentially from the third quarter. We continue to refine our strategy on our TVOD offering as we do with our kiosks to merchandise previous titles in a franchise around the release of the latest installments.
We did this when we merchandised the kiosk, the kiosk on TVOD with Knives Out around Netflix's release of Glass Onion. We also did it with Scream, and it's a meaningful way to capture audience demand around new releases. In fact, just recently, John Wick chapters one and three were our top two catalog titles in kiosks over the past two weeks, coinciding with the theatrical release of John Wick: Chapter 4. Turning finally to the third pillar. We have adapted our approach to take into account the challenging macro financial environment we're living in, with rising rates, inflation, bank problems, among other challenges. We've attacked these issues head on, first by achieving the synergies we identified when we entered the Redbox transaction, but we did not stop there.
We continued by looking at all of the commitments Redbox made to make sure that they were things we thought made sense for the business. If we found they weren't, we changed them. We made further cost cuts than we initially anticipated and deferred further expenses such as executive bonuses, to tie them more closely to our expectations for free cash flow. We recently licensed content that we weren't fully utilizing to the tune of $8 million. We have begun the integration of our ad rep business, O&O networks, and SaaS platforms to generate contribution margin that we use to invest in the growth of our owned and operated networks. This should allow us to continue to grow that integrated business with less capital needs. Finally, yesterday, we did a small public offering to begin the process of strengthening our balance sheet.
We raised $10.8 million from investors, including our parent company, and worked out an arrangement with our parent company to reduce future cash payments starting January 1st, relating to the management of license agreements through a stock purchase commitment. We're looking at certain assets that are not strategic to our go-forward strategy, which we intend to sell. We believe that this will help us reduce debt more quickly than anticipated, of course, we plan to finalize our working capital loan with our accounts receivable in the near future. In closing, if 2022 was a year of transformation, 2023 has the potential to be a year of execution and growth. The rebound in theatrical releases is already driving rentals higher. The integration of our ad-supported businesses is already well underway. Our TVOD business is continuing to grow.
Our short-term actions are focused on addressing the macro environment we're all living in, but our long-term mission remains to build the leading premium entertainment company for value-conscious consumers. With that, I'll turn it over to Jason.
Thank you, Will. Good morning, everybody. We ended the year on a strong note with fourth quarter revenue of $113.6 million, up 216% year-over-year, and adjusted EBITDA of $14.7 million, up 59% year-over-year. Sequentially, revenue was up 57% from the third quarter. The strong performance in the quarter reflects the continued strength of our multi-platform strategy, including library monetization and digital performance across both our owned and operated platforms as well as our ad representation business. The performance in the fourth quarter is driven by the strength in distribution, licensing, and Screen Media, reflecting the demand for our premium content library, which more than offset the impact of a limited number of theatrical releases at the kiosks and on TVOD.
As Will discussed earlier, the frequency of those releases was sporadic and inconsistent, unlike what we are expecting for the remainder of 2023. Despite the limited number of title releases in the fourth quarter, TVOD revenues were up year-over-year, driven by an increase in orders reflecting the strength of Top Gun: Maverick, which was the top ordered new release title from October through December, demonstrating an impressive consistency unusual for a title prior to its release on the SVOD window. The other driver titles on TVOD were Black Adam and Black Panther. As the theatrical slate rebounds in 2023, we expect to see continued growth in both TVOD revenues and orders. As Will mentioned, we're already seeing the positive impact of the return on big theatrical titles to our kiosks in March.
Black Panther: Wakanda Forever drove week-over-week rentals up 30% and on transacting customers up 23%, followed by Puss in Boots: The Last Wish a week later that drove rentals up 12% and new transacting customers up 19%. We ended the quarter with about 32,000 kiosks nationwide. As previously mentioned, we are constantly optimizing our kiosk footprint, which includes expanding relationships with our most profitable retail partners. We recently announced an expanded partnership with a leading national value-conscious retailer, where we'll be adding 1,000 new kiosks to their stores this year and an additional 500 next year, bringing their total kiosk count to over 5,000. As always, we will continue to identify ways to drive greater profitability and customer reach.
As an example, in Q1 of 2023, we began rolling out the ability for Redbox kiosk customers to utilize their loyalty rewards on our TVOD platform, driving further digital engagement with the Redbox customer base. I'd like to take a moment to provide some context around kiosk rentals and the assumptions that underpin our expectations for the remainder of 2023. Based on the early rebound in rentals we're seeing in March, along with the size and scale of the theatrical slate from now through the end of the year, our expectations assume rentals return to approximately 30% of 2019 levels pre-pandemic. Along with this, we're seeing the conversion rates at our kiosks beginning to rise towards the 45% level that they were in 2019.
As the steady flow of films returns to kiosks, we expect conversion rates to rebound. In fact, over the past two weeks, we've seen conversion rates jump to their highest level since we acquired Redbox. Let me turn to the fourth quarter. In the fourth quarter, gross profit before film library amortization expense and related costs and after Redbox product cost was $76.6 million or 68% of net revenue as compared to $23.1 million in the prior-year quarter or 64% of net revenue. On a comparable basis, CSSE standalone gross profits with 30% of net revenue in the quarter, up from 22% in the third quarter of 2022 and 32% in the prior-year quarter.
When combined with Redbox's standalone gross profit margin after product cost of approximately 58%, the combined business had a blended gross profit margin of 43%. Our reported operating margin in the fourth quarter on a comparable basis to Q3, adjusted for a non-recurring impairment charge, was 200 basis points higher or 19%. Our operating loss for the fourth quarter was $47.1 million, compared to an operating loss of $19.1 million in the prior-year.
This variance is driven by increased compensation expense related to over the 1,000 additional heads, and other non-recurring charges, as well as higher amortization expense and management fees, all driven by the acquisitions of Redbox and 1091 Pictures. Our adjusted EBITDA for the fourth quarter was $14.7 million compared to $9.3 million the same quarter in 2021, representing an increase of $5.4 million or 59%. Sequentially, from the third quarter, adjusted EBITDA was up 53%. In the quarter, we continued to realize synergies related to Screen Media's original content at the Redbox kiosks on the Redbox TV platform, as well as savings related to leveraging Crackle's ad sales force on Redbox's AVOD platform and distribution. I should say Screen Media's distribution of Redbox's content, just to name a few.
Turning to our balance sheet. As of December 31st, 2022, the company had $18.7 million of cash on hand. As Will previously discussed in his remarks, we're focused on increasing recurring free cash flow through enhancing working capital by reducing content spend, realization of synergies, and are expecting an amplified working capital improvement as the kiosk rentals rebound in 2023. With that, I'll turn it over to the operator.
Thanks, Kevin. Can we open the line for questions, please?
Sure thing. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered or you wish to move yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Thomas Forte with D.A. Davidson. Your line is open.
Great, thanks. I think I'll ask one question and get back into the queue. Will, basically, your results were pretty much as expected. Your outlook for the year was good as expected, including for the first quarter. You talked about the capital raise and you talked about that you may talk more about capital raises in general. Can you talk about, I guess, your current capital structure and how investors should think about your capital needs over the next 12 months, especially given the favorable performance both in the fourth quarter, the expectations for the first quarter and full-year. Thanks.
Good morning, Tom. I wanted to give you the context of the entire approach we're taking to addressing capital, working capital, you know, those kinds of things. I mean, it's a moment in time for everybody in our industry where people are attacking the questions of costs and the questions of content spend and questions of working capital and questions of capital on the balance sheet as a combined effort. I think that's the way we need to look at what we're doing. We're not just doing one thing, we're doing many things, all of which are designed to drive cash flow faster and to improve the overall capital of the business. You know, I'll repeat some of the things I said earlier because they're important.
We took a look at commitments that had been made, that were made by Redbox, made sure they made sense. You know, we combined tech commitments where we could in order to reduce costs. If we found something we didn't like, we changed it. We deferred bonuses, the way I said earlier. We've to tie them more closely to what will be growing cash flow in the second, third and fourth quarters. We've been licensing content in order to make sure that we tap what I used to call our savings account. It still is. That very large library we have is a generator of cash for us in the last few weeks alone, $8 million.
We've looked at our ad rep business and put our ad rep business and our FAST platform and on our O&O networks together and are running them with the contribution margin that's coming from the ad rep business and the contribution margin that's coming from the FAST platform to fund the O&O networks. That means less capital is needed for the AVOD business. We didn't mention that for the 2023 year, we're anticipating only about $19 million of net content costs.
If you looked at the $100 million of EBITDA on the low end of the range that we have for the year and subtracted $15 million of interest we have to pay on our notes and our preferreds and $19 million of cash content and throw $15 million in there for working capital ups and downs, you'd have $50 million of free cash flow this year on the low end of our range. It's a combined effort of things. The public offering we did yesterday is the beginning of just beefing up the balance sheet. As you know, we've been working for a while and getting our working capital loan against our $110 million of accounts receivable. That's going okay.
It's all of these things together, plus the deferral of the management fee so that there's more cash flow for the company that are the right way to be thinking about the business in these times. Things are different. You know, we understand that our rates have risen and we need to compensate for that. We understand that, you know, the macro environment is different than it was, but we're not alone in that. Every one of our competitors and even the big media companies are going through the exact same things as we all kind of right size our businesses, our capital structure. It's not just capital structure, it's also the way we run the business. Those two things together are the important thing to bear in mind.
Just one more thought, and I know this is a long answer, but it's a very important question, Tom. The business itself, separate from this working capital structure is really doing well. The AVOD business, that combination of ad sales, FAST and the O&O businesses, that business is doing incredibly well. There was no slowdown in CPMs. There was no slowdown in fill rate. That business is continuing to grow dramatically, and we're in a very good spot there. The kiosks have turned. March was a much better month than February. I think what we'll try to do is introduce this metric of rentals per day per kiosk so that everyone can do a comparative back to 2019.
If you look at our plan for the year, that $500 million of revenue comes from us achieving 30% of what Redbox did in 2019. With 55 major event movies coming, one every weekend. We're saying all we're gonna do is get back to 30% of 2019. If we do that, we get $500 million of revenue at $100 million of adjusted EBITDA. I think it's the overall plan, Tom, that people need to understand, not just one piece of it.
Great. Thanks. I'll get back in the queue.
Thanks. Okay, Tom.
One moment before our next question. Our next question comes from Eric Wold with B. Riley. Your line is open.
Thanks. Good morning. Will, I just wanna hit on that last comment you made, kind of follow up with a couple of questions around the rental trends on Redbox. Getting back to 30% of 2019 levels, kind of on a full-year basis this year, what would you expect kind of exit the year on? Since you kind of give us a run rate for the business kind of exiting last year, kind of what would you expect?
Yeah.
that run rate to be kind of exiting next year, so you can get a sense of the exiting this year to get a sense of the trajectory heading into next year? Two, on apples-to-apples basis, what is kind of the pricing on the average transaction value you're seeing now versus 19? I know you took the price increase late last year when Top Gun: Maverick came out. What do we think about that, and kind of how sensitive are consumers right now to price increases such that, you know, how much could you take it further if you needed to?
I didn't hear the last thing that you said, Eric. Could you just repeat that?
Just how sensitive are customers right now, do you think? If you needed to take price or want to take price further, you know, what is your ability to do so?
Yeah. I think, it's hard to tell. We didn't see any noticeable change from the price rise that we did, but it was really it was $0.25. Even though it was 11%, it didn't seem to have much of an impact. I think we'll have a way better sense of that as we go into this next few weeks and months, and we have this really steady flow of great stuff. If somehow it doesn't materialize, I have to say, I think it's gonna be above what we have planned, but if it doesn't, then maybe one of the factors could have been the price rise for all I know. I don't think we'll do another price increase for a bit, you know, maybe next year sometime. It depends.
I think it depends overall, Eric, on inflation in general. You know, if inflation drops, you know, and sort of calms down as I know all of us are hoping for on a macro level, then, you know, it's less likely. If it continues at a fast pace, then we should keep up, you know. We really should keep our, you know, keep our share where it is. The question you asked about leaving the year. We've modeled, as I said, the business so that it will achieve 30% of 2019 by the end of the year. What we would think would happen in 2024 would be we'd rise to 50%.
That's where we think the business will end up being, around 50% of that level. At the 50% level, the EBITDA from the kiosks alone will approach $150 million a year, plus the EBITDA that we're generating across the rest of the company, which as you know, has been considerable. You know, we've never thought the business would go all the way back to where it was in 2019. What's interesting to me is when I look at the same-store sales numbers, as I said in my, in my part of the talk, these same-store sales numbers are already starting to approach 40% of 2000 and more of 2019.
Maybe, you know, maybe we understated it a bit. It's hard to tell. You know, if you went into a Redbox kiosk over the last six months, you would have seen a few movies you recognized. You know, Top Gun, Black Panther, Black Adam, one or two others. You would have seen 30 other movies on the homepage that you never heard of. That's a very different environment for our consumers than when they walk into a Redbox and they see only movies they've heard of. All these franchise movies that are coming and so many more will all end up on that front page over the next few months.
That should drive, as Jason said in his talk, a rebound in conversion rate from the 20% to the 45% level that it was in the past. It should drive an increase in the basket size. We've seen a couple of upticks in basket size over the last few weeks as particular releases have come out, but it's not yet consistently moving towards this 2.5 x. It's somewhere between where it was and the 2.5 x that it used to be. If you did the math and you go from 20% conversion rate to 45% conversion rate, and you go from 1.5 Discs in a basket to 2.5. What you would realize is the business should more than triple from where it is today.
3.3x is actually the number, without any new customers coming back. Yet we've only modeled it to double from where it is today. In looking at the 2023 plan, there are a lot of reasons to believe we could even do better than that. I hope that helps, Eric, but there's a. I know I threw a lot of things out there, but I think they're all important statistics.
No, very helpful. Thanks, Will.
One moment for our next question. Our next question comes from Daniel Kurnos with The Benchmark Company. Your line is open.
Thanks. Good morning, Will. Maybe just start on the AVOD FAST side. you know, we've heard some commentary around potential green shoots and open web programmatic. you know, I think there's been sort of an uneven recovery. Q1 still isn't great for DTV or OTT in general, but it sounds like things are still getting better, although everybody's kind of holding their breath for the back half of the year. I know you gave some good color around CPMs and fill rates, but just now that you've kind of fixed some of the distribution and app issues, you know, we know what's kind of embedded in the guidance, but just any color you could give just on the marketplace, what you're seeing sort of in March and then heading into summer on that front would be a helpful start. Thanks.
Okay. Yeah. I do know that everybody's worried, but, you know, everybody about the advertising environment, but I would point out that everybody's worried about the banks, everybody's worried about inflation, everybody seems to be worried about everything right now. I don't see a lot of signs in the ad market of the kind of slowdown in connected television that may be occurring in broadcast and cable. There's been really... January is a little bit weak, but it's always a little bit weak. It's the worst month of the year, generally. February was better, March was better yet, and we're back to exceeding year-over-year numbers.
I think from our perspective, Dan, it's a slightly different analysis that I do, which is with the growing footprint that we have, the increase in FAST channels, the really great success of the Chicken Soup for the Soul AVOD, which will now be amplified meaningfully by its, by its arrival, on Roku, finally. The, you know, that amplification of growth, in the O&O networks. Then the going from 2- 20 Ad Rep Partners , I'm gonna have a hard time changing them to third-party clients in my vocabulary, but that's what the guys want me to do.
The combination of that growth, the growth of FAST, the growth of third-party clients, and the growth of the O&O businesses are really driving our increases more than the share of the marketplace that we're getting. Although I did see us, I did see a study yesterday that showed we were clearly number five as we've always thought in market share, not too far behind Freevee, actually, pretty close. I think we'll keep growing this year just because we keep expanding the footprint because we have more territory, because we have more assets. I'm little less worried about what that means for the year's numbers. If it's a stronger advertising environment, we'll probably do better.
I think what we're doing in the overall way we're running the business is the reason we're growing. It's not just the market itself that's growing with us. We're also taking market share and approaching the business differently than others have. I have to say this Crackle Connex, which is a name for our third-party client business is really poised to be a very profitable cash-generating business for us. I think the arrival of Netflix and Disney to the industry has helped us because it's forced some of the smaller AVODs to look for a way to sell their direct ads. None of the other top 5 companies will sell someone else's ads for them.
This gives us a pretty unique position, and it's why we've gone from 2 to 20 in such a short period of time. There actually are quite a few more of these companies that are in conversations with us about joining the club, so to speak. I hope that answers it, Dan, but it's a slightly different perspective than just about the market.
Well, no, I mean, I wanted to get into that because the dynamics of the market have obviously changed. You know, looks like SVOD's obviously, you know, kind of peaked and/or is slowing. AVOD is still growing. Over-the-air is growing faster yet than that. The conversation around FAST and rights management has obviously accelerated as well to the point where FAST rights and especially international, and I saw you guys do something with KC, right? I mean, you've kind of built a sort of an amalgamation of rights that you have, rights that you don't. I don't know where you sit on that. The large companies are now from a content perspective, scaling back on the number of products, and they're paying more for quality, because they all obviously have to right-size their own balance sheet.
They can only bleed billions of dollars for so long, Will. In that regard, I'm curious, you know, you talked about lower content spend. I just love to get an update from sort of a rights perspective and incremental distribution opportunity as well as on the content side, it sounds like sort of the base case for libraries content costs are actually coming down on the syndicated or legacy library side. So I'm just kind of curious how that factors into your viewpoint.
As you know, we accumulated library in a variety of ways over the last five years, building it up to over 21,000 films and TV shows that we have long-term rights or intellectual property ownership of. I always said to, I mean, to you and everyone else, I view this as a savings account. Someday it'll be, we may not continue to buy, but we'll actually license and harvest. What you're starting to see is signs of that in everything we're doing. The KC Global deal is a great example of it. Thank you for mentioning it. KC Global is a fantastic company across Asia, and they needed certain rights in order to launch a new channel. They came to us. We were able to enter into an agreement with them.
It's probably the first step towards a broader partnership with them. We're getting revenue we didn't get before. The Keshet deal was an early example of that. By the way, Locomotive, which is a slightly different approach to international, is also generating revenue. Rana Naidu, which is the show that Locomotive made for Netflix in India, is a big hit. I expect it's gonna be renewed for season 2 shortly. We're monetizing content in lots of ways, but we've always said that that was what we wanted to do. Specifically in the FAST space, this is a really interesting development in the way it's evolving.
You are right, the bigger companies are starting to look at their libraries and go, "Well, wait a minute, I don't need exclusivity on everything." This is something we've been saying for how many years? We're better off monetizing the content we have and in as many ways as possible. That is what they're starting to do. That's always been our strategy. If you go back to the way we control cost of revenue on our networks, and our own owned networks have the lowest cost of revenue of any of the big ones. We do it by making sure that we monetize the rights we don't need to use on our own networks and getting capital, getting money back against that, which reduces the net cost we have in the content.
When we put it on our networks, it means most of it's going to be profit. These strategies that you're seeing the bigger companies adopt are really things we've done from the beginning. Now, I would say we've done them from the beginning 'cause we're small and scrappy and we needed to, but it's also what we believed was right. That's what we're seeing.
All right. Thanks, Will. I appreciate it.
Thanks, Dan. I think we only have time for one really short question, operator.
Sure.
We've gotta wrap up.
One moment. Our next question comes from Mike Grondahl with Northland Securities. Your line is open.
Hey, Will, it's Mike. Three really short ones.
Hi, Mike.
For fourth quarter, can you break out revenues between Redbox and Chicken Soup Legacy? I don't think I saw it. You guys had, I believe, like, a $40 million cost synergy goal with the acquisition. Kinda specifically, where are you towards that goal? I'll leave it at those two.
Okay. We'll break out the numbers for you in our separate one-on-one because I'm already over time, the quick answer to your question on the synergy are that they're achieved. I expect them ultimately to be higher. The one that was the most important was pulling back the rights to sell the ads for Redbox AVOD and Redbox FAST, giving that to our own sales force, saving 35%, increasing CPMs and accuracy fill rates. The combination of those three things is a very important number towards the $41 million we identified. I know it's 9:30 A.M., the market's gonna open, I wanna thank you all for attending today and look forward to speaking with you all soon. Thanks, everybody.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.