Mirriad – helping the UK television industry to strike the right balance?
14th July 2022 |
More and longer advertisements are coming to television screens across the UK.
On 30 June 2022, UK broadcasting regulator Ofcom revealed it is seeking ways to increase the duration and frequency of television adverts, as part of a new rule review.
Changes in viewing habits and the rise of streaming services are putting a squeeze on revenues and cost bases for UK broadcasters. To compensate, longer advertising slots are being discussed to help them stay competitive.
The current rules mean that channels three to five (including ITV, Channel 4 and Channel 5) are limited to showing adverts for a maximum of seven minutes per hour of broadcasting during daytime hours. Between 18:00 and 23:00, advertising breaks can run for eight minutes per hour.
However, potential increases in advertising frequency and duration provides a conundrum for Ofcom.
Increasing the number of adverts could alienate viewers, and lead to a drop in viewing figures. According to Ofcom, younger TV audiences are already “frustrated” with the number of adverts, making this a real possibility.
However, not taking action could jeopardise the future of several UK-based broadcasters feeling the strain.
In fact, Ofcom has explained the importance of “striking the right balance”.
We believe Mirriad Advertising (LSE: MIRI) could provide a viable solution to the problems faced by the UK’s broadcasting industry.
Mirriad’s in-content advertising solution can be subtly inserted into pre-recorded footage without disrupting viewership, reducing the need for conventional adverts. Mirriad’s technology makes it possible to place, say, beer with brand A in a scene in a programme that is broadcast in one part of the country, and beer with brand B in the same scene when the programme is aired somewhere else.
What’s interesting is that Mirriad already has an ongoing partnership with Channel 4. In 2021, Mirriad deployed its advertising solution to Channel 4 via its daytime Rightmove programme, which you can learn more about here.
So, we believe Mirriad’s solution could receive renewed interest from UK broadcasters.
In addition, you may recall that in our 2 June 2022 update, we spoke of many large-cap streaming services weighing up the possibility of incorporating advertising into their platforms. This included technology giant Netflix.
On 24 June 2022, Netflix confirmed it is incorporating ads into its services, to help provide additional revenue streams.
Streaming platform Disney+ is also exploring the possibility of introducing ads, as it adapts to a deteriorating macro outlook.
In our view, this could also bring Mirriad’s technology into focus. Its growing commercial expansion in the United States could give it exposure to larger tech players.
As a reminder, US-based revenues for the full year 2021 were up 182% on the previous year. In addition, on 23 June 2022, Mirriad appointed two non-executive directors to “boost North American expansion.”
We remain excited by Mirriad’s prospects as it continues to realise its growth potential in the UK and the United States.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
Buy list update
Argo Blockchain (LSE: ARB)
Argo is a miner of cryptocurrencies, namely bitcoin.
Like several other crypto-centric assets, the company’s valuation has plummeted in recent months, with overbearing “risk-off” sentiment weighing heavily on the crypto market.
At the time of writing, its share price is just 33GBp, which is a far cry from the all-time high of 282GBp it set in February 2021.
We don’t believe the drastic fall in share price is due to a systemic issue within the company. If it were, we would’ve exited the position a while ago.
In fact, Argo continues to mine bitcoin at an impressive rate.
In June this year, Argo mined 179 bitcoin, compared to 124 bitcoin in May 2022. According to Argo, the increase was due to an “increase hash rate capacity” and greater uptime at its new Helios mining facility in Texas.
According to Argo, the company remains on track to install 20,000 mining machines at Helios by October 2022. Once fully operational, Helios will be one of the world’s largest immersion-cooled mining facilities. In this instance, “immersion cooled” refers to high-speed mining in warmer climates.
As of 30 June 2022, Argo held 1,953 bitcoin. At current market value, its bitcoin holdings are worth in excess of $39 million. Argo’s current market capitalisation is £159.1 million ($188.2 million).
If bitcoin were to reach $100,000 for example, its bitcoin holdings would exceed $195 million. That’s assuming its bitcoin holdings stay fixed, which given its mining progress, is unlikely. In our view, this makes Argo’s shares look undervalued.
With its new mining facility almost operational, we believe that Argo has the credentials to become one of the world’s leading, publicly listed crypto miners. Also, the fact it uses renewable power in its mining processes gives it a stronger investment case in a world that is seeking ways to become greener.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
The Frontier Tech Investor “Top Three”
Sometimes it’s hard to decide on which stocks to invest in from our buy list.
Below is our Frontier Tech Investor “Top Three” section showing three stocks in open BUY positions. If you’re trying to figure out what to invest in next, these are three that we think are a great place to start.
This doesn’t mean our other stocks are no good: this is just a tool to help you spot the next Frontier Tech Investor stock that could be worthy of your consideration.
Pod Point Group (LSE: PODP) – The UK’s inadequate (for now) electric vehicle (EV) charging network is threatening to bring the EV transition to a halt. By 2032, the shortfall of EV charge points in the UK is estimated to reach 250,000. However, Pod Point’s innovative range of EV charging solutions could go a long way in ensuring this deficit is reduced. The company’s charging technology is fit for homes, public charging bays, lamp posts and commercial buildings, and can ensure that the EV transition reaches all areas of the UK. In our view, Pod Point can unlock the potential of the UK’s EV charging network. You can find the original recommendation here.
Team17 (LSE: TM17) – Team17 is a video game publisher. It has a large collection of games which contains some of the most popular games of the gaming world. One of these is Worms, the enthralling last-man-standing survival game born out of the 1990sgaming boom. Team17 is keeping up with the times and offers its games across a number of contemporary technology platforms. It has even flirted with the idea of non-fungible tokens (NFTs), a megatrend which could revolutionise the gaming industry. At a time where sceptics think online gaming will come off the boil following the ease of lockdown restrictions, Team17 keeps gamers coming back for more. You can find the original recommendation here.
AB Dynamics (LSE: ABDP) – AB Dynamics is a provider of automotive testing services. The automotive industry is undergoing rapid transformational change, heading for an electric and autonomous future. This brings an ever-changing regulatory landscape, with automotive manufacturers needing to ensure they adhere to the latest safety standards. AB Dynamics testing services are helping to make arduous, chaotic testing periods more seamless than ever before, ensuring that the vehicles of tomorrow are fit for our roads. You can find the original recommendation here.
Sam Volkering
Editor, Frontier Tech Investor
Elliott Playle
Analyst, Frontier Tech Investor
