Genius Brands International Inc (GNUS)

[rickn23]

We can look at the transcript:

Mr. Joseph Delahoussaye: Okay, well that’s good to hear.

My second question had to do with I guess the licensing and royalties, specifically as it relates to Space Pop. Around the holiday season I recognized that I guess the holiday season we received royalties like one quarter in arrears so you know the March quarter should have been paying, I guess, most if not all of the holiday royalties from Space Pop merchandising. And just looking at the 10Q I see licensing for the March quarter was one $153,000 for this year versus last year at $148,000. Can you just maybe, I guess, elaborate on those figures and maybe why if this is the first full season of Space Pop merchandise, maybe why those numbers are pretty similar on a year over year case?


Mr. Andy Heyward: Yeah. Well first of all Space Pop is an entertainment property and you can't recognize revenue until the property is delivered and available for broadcast. We had 108 episodes that we are producing in Space Pop. We haven't even delivered the 108 yet. We've delivered what, 80-ish of them. Until those are fully delivered we can’t recognize the revenues on Space Pop. So what we have is some advances and the advances are earning out from the first year. The important thing is that the product is all on shelves still and it's selling and it's continuing to sell.

The brand is growing and most new brands that launch that doesn't happen. Most new brands don't succeed. The fact that Space Pop is now going into its second year it's going to have much more, as I said, it's going to have additional skews. It's going to have additional licensees and it's going to have additional distribution at retail. All of that is going to bode very, very strongly for its performance this year.

It's not a water faucet. You don't just turn it on and all of a sudden everything is flying off the shelf. It doesn't work that way. Retailers are very conservative with the amount of products that they put on shelf in season and it's basically a vehicle from which to grow the brand into its next year.


Mr. Joseph Delahoussaye: Well, maybe I wasn't clear on my question or maybe I'm misunderstanding something, but any merchandise sales, license arrangements, that tie to retail merchandise or would be included in the licensing and royalties line on the income statement correct?


Mr. Andy Heyward: I believe so. I'm going to have to double check that. I’ll put you in touch with our CFO and she can, you know, tell you precisely how all of those are handled.


Mr. Joseph Delahoussaye: Okay. I’ll look forward to touching base with her.

It looks like Andy says that revenue can't be recognized until the product is delivered, but, some of the advances are earning out.

I'm not sure what that mean, Spacepop is on Youtube not a network. I thought revenue was advertising and licensing, not broadcast rights. Ad revenue should be able to be recognized immediately as well as licensing revenue.

Edit
Unless Youtube is paying GNUS for Spacepop.