Nexxen's Q1 2024 earnings call was a symphony of optimism. New partnerships, a robust data platform, and the promise of a political ad spending bonanza all painted a rosy picture for the future. Yet, lurking beneath this positive narrative is a curious detail that seems to have slipped past most analysts: Nexxen's Connected TV (CTV) revenue actually *decreased* by 11% year-over-year.

At first glance, this seems like a glaring weakness in a market where CTV is widely seen as the golden child of digital advertising. But what if this perceived weakness is actually a strategic masterstroke, a clever feint designed to position Nexxen for explosive long-term growth?

Here's why Wall Street might be misinterpreting the situation. Nexxen's management attributes the CTV slowdown to two factors: a conscious shift by cost-conscious customers towards lower-priced solutions like display and mobile video, and the growing trend of audiences streaming content on mobile devices. They argue that this is a temporary trend driven by macroeconomic uncertainty and evolving consumer behavior.

While this explanation is plausible, it could be masking a far bolder strategy. Nexxen might be intentionally downplaying its CTV ambitions in the short term to focus on building an unrivaled data advantage in the streaming space.

Remember, Nexxen holds exclusive rights to global ACR (Automatic Content Recognition) data from VIDAA, a rapidly growing CTV operating system powering millions of Hisense and Toshiba smart TVs. This data is a treasure trove of consumer insights, revealing what people are actually watching on their TVs.

Nexxen is already leveraging this data to power its TV Intelligence solution, a powerful tool that helps advertisers plan, target, and measure their campaigns across both linear and digital TV. But the real game-changer lies in licensing this data to other players in the ad tech ecosystem.

Imagine the possibilities. Demand-side platforms (DSPs) are constantly seeking accurate and granular data to improve their targeting capabilities. Measurement and planning providers need reliable data to track campaign performance and optimize ad spending. Nexxen, with its exclusive access to VIDAA's global ACR data, is uniquely positioned to become the go-to source for this valuable commodity.

This data licensing strategy could unlock a massive new revenue stream for Nexxen. It's a high-margin business with significant growth potential, particularly as the value of ACR data becomes increasingly apparent. Just look at Walmart's recent move to acquire Vizio, a major smart TV OEM with its own CTV operating system and ACR data. This acquisition clearly signals the strategic importance of this data in the evolving advertising landscape.

While Nexxen's management is understandably tight-lipped about the specific revenue potential of data licensing, the numbers could be eye-popping. VIDAA's reach already exceeds 26 million connected TVs, generating over 2 billion monthly streaming hours. With Hisense's aggressive growth plans and Toshiba's global footprint, this number is only going to explode in the coming years.

If Nexxen can successfully monetize even a fraction of this data through licensing agreements, the revenue impact could dwarf its current CTV advertising business. Moreover, this revenue would be recurring and highly profitable, significantly boosting Nexxen's overall profitability and valuation.

Nexxen's Revenue Breakdown (Q1 2024)

Reference: Nexxen International Ltd. (NASDAQ:NEXN) Q1 2024 Earnings Call Transcript

**Note:** Display, Mobile Video, and Other Revenue values are estimated based on information from the earnings call transcript and industry trends.

VIDAA's Growth Trajectory

Here's the key takeaway. While Wall Street is fixated on the short-term dip in Nexxen's CTV revenue, the company is quietly building a data empire that could redefine its future. This strategic focus on data, coupled with its robust end-to-end platform and expanding partnerships, sets the stage for explosive long-term growth that could leave competitors scrambling to catch up. The hidden goldmine in Nexxen's CTV weakness is its data advantage, and those who recognize it early stand to reap the rewards.

"**Fun Fact:** ACR data is so granular that it can tell advertisers not just what shows people are watching but even whether they're paying attention to the ads. This level of detail is invaluable for optimizing campaign performance and measuring true ad engagement."