Christopher Ruddy, CEO of Newsmax Inc. NMAX, was recently a guest on Benzinga's All-Access.
Newsmax is a growing conservative cable news channel that recently went public on the New York Stock Exchange. The company is inking content deals with the likes of Hulu and Comcast, and is about to join the Russell 2000 Index later this month.
Newsmax is now number 4 in cable news in the U.S., reaching about 40 million people across the country. While Newsmax may have a formidable competitor – Fox News has dominated the center-right news market for years – Ruddy says the company has been able to successfully grow because of its focus on cable news as well as its streaming service Newsmax2, which had 22 million monthly viewers in May alone.
Right now, cable licensing fees are driving a lot of Newsmax's growth, but in the future, Ruddy believes the company's free OTT channel and streaming service will be big drivers of growth.
00:00and it is my pleasure to welcome in the CEO of Newsmax Christopher Roddy it's fantastic to be
00:09with you today Chris Dan thank you for having me I'm really looking forward to this me as well
00:15listen let's start with this for the very few now that aren't familiar can you please give us an
00:20overview of Newsmax well I don't know if there's a quick overview Newsmax is a multimedia company
00:27we started out as a digital media now one of them a major force in cable and OTT news our cable news
00:37channel is number four in the United States for news in Q1 Nielsen says we were number five of
00:44all cable channels which is a pretty big number there's hundreds of cable channels the Reuters
00:50Institute came out with a study last year saying there were 12 top US news media brands we were
00:56one of them uh so uh Forbes had once referred to Newsmax as a news powerhouse I think it's a fair
01:03statement and uh we reach about 40 million people and we just went public this year on the New York
01:09Stock Exchange now it's exciting times and I'm telling you the the the quick growth for you guys
01:15at Newsmax has been something to watch and hey Chris I wanted to talk to you about when it comes
01:20to cable news I mean you know you got us Newsmax is a fairly newcomer on the scene yet as you talked
01:26about it's a massive viewership of about 40 million viewers what is it that is behind that massive appeal
01:32what do you believe you know is bringing all these people to Newsmax and more importantly keeps them
01:37coming back for more well there's a lot to unravel there I think that the the there's a center-right
01:46market for news in the United States that has long been dominated by Fox News and Fox is part of um the
01:52the Fox Corporation and I don't know it's worth 15 to 20 billion dollars it's a huge market they've
01:58really not had a competitor until Newsmax came along uh they did a lot of things in fact to try to stop us
02:05along the way but we prevailed we're now on every major cable system uh and as the eco um ecosystem
02:13of cable is contracting Newsmax has been rising we believe that it's still going to be a very
02:19lucrative uh cash flow business for many years to come and uh that cable will be important for live
02:27news live sports and we're part of that so that's very positive at the same time we have a very strong
02:34streaming service uh OTT channel called Newsmax 2 um according to our data about 22 million Americans
02:42tuned into that channel uh last month which is a huge number and it's growing it was up uh significantly
02:49over last year the same period and then we have a plus service where people can get all of our channels
02:55we actually have three channels now uh and a lot of documentaries films and we're even making that sort
03:00of family entertainment program as well so we're very excited about that and um it's it's I think a very
03:07good start uh it absolutely is and you know you allude to this what is equally impressive Chris
03:13is the inroads Newsmax is made in the OTT market Newsmax 2 fast channel that obviously your company's
03:19streaming channel saw 25 year over year growth in May what do you attribute that double digit growth to
03:25and how is the growth so far in June well our q1 of this year Nielsen rating showed we had a 50
03:33percent increase in total audience for our cable channel I mean you've been around Dan a while
03:39covering media companies you know these numbers don't happen by accident it's a it's a force it's
03:44a movement and I think the the pitch I make to investors is don't invest in Newsmax because we're
03:50reaching 40 million people or that we have a lot of influence invest in Newsmax because we're a
03:57growing company that's in a very important market the center right market which has been widely
04:02overlooked we have a long history of success in growth in that area and we are on all the major
04:12systems now to make it capable as we grow into those ratings so when I talked about Reuters saying
04:17there were 12 top media companies most of them if not all are billion dollar multi-billion dollar
04:24companies Newsmax is a new entrance the Financial Times said right after we went public that Newsmax is
04:31essentially going to grow into its ratings it has a lot of revenue growth potential and we've seen
04:37that in the past several years revenues are up overall over the past several years over 300 percent
04:43which is a remarkable number we're continuing to see revenue growth in this year yeah nothing like
04:50being a disruptor Chris as you well know and it's the numbers are very very impressive and I'm interested
04:55to ask you about you know this are more of the viewers coming to Newsmax from cable TV or streaming
05:01on mobile devices and in your perspective which is is better from a revenue advertising standpoint
05:07how do you see that possibly evolving over time okay well again that's a good question and I like the
05:14end part evolving over time right now the golden noose is cable cable brings us cable license fees are
05:20very significant we can't reveal those fees because of confidentiality agreements but they have been
05:26growing very significantly and we're still selling we're still getting fees at a fraction of what other
05:34competitors for example our ratings are very close to CNN's ratings yet they get a multiple of what we
05:41get from cable operators so we have room to grow into that advertising has been strong and growing
05:47on the cable ecosystem for us but where we see the future is both on the free OTT channel and we also
05:54see it in the streaming service and other things that we're doing so what I see Newsmax is a very
06:00valuable traditional play as an investment and a company and with an upside of the OTT streaming
06:08and fast technologies that are hitting oh that's that's perfectly said that's that's the kind of the
06:14day and age we're living in this is also something that I thought was fascinating in addition to
06:18increasing the number of viewers on Newsmax 2 they're also staying longer and obviously we know
06:23how important that is tell us why that is important and what Newsmax is doing and keeping viewers on Newsmax
06:282 longer well the key demo 35 to 64 we had the longest demo in cable news for daytime viewers I mean
06:37that's pretty amazing uh Nielsen reports some really fascinating things people like our channel we have a real
06:43strong following I give you an example in q1 four plus million people came to Newsmax never once went
06:51to Fox News to watch that's an amazing number of people out of the cable ecosystem so it's showing
06:59that we're building not only a wide and broad audience but we're also building a unique and
07:03exclusive audience and that's going to serve us across all our platforms because remember when people
07:08watch cable they can still download our app they can still become a Newsmax plus member and we have very diverse
07:15what's great is different diverse revenue streams we have advertising we have subscription income which is from the
07:22cable license fees that's essentially subscription income and then streaming we sell advertising but we also sell our
07:29digital products we have digital advertising we have digital newsletters and publications um we even publish books
07:37call under our title subsidiary humanics books we've had six New York Times bestsellers so the overall impact of Newsmax
07:46Dan I like to say that the the business model is all for all we're on all platforms for all people and I think that's what we've been a pathfinder on that we've been an
07:59innovator you you called us a disrupt disruptor we are but we're also an innovator and I think the future is going to be
08:07Newsmax for other media companies yeah Chris I'm also going to say there's nothing Newsmax doesn't do so that's always a good thing as well
08:14you guys are in everything this is going to help Chris with that growth I know you just Newsmax just inked a deal with Comcast to be featured on Comcast
08:23entertainment devices across the United States what does that need for Newsmax's reach and business of course
08:29but how big of a deal is that for the company well we think it's very significant first of all Comcast is
08:35one of the largest cable providers in the United States it's a mega great uh media company great
08:42enterprise we've always had a good relationship with Comcast they carry our channel on Xfinity the cable
08:48channel but they have the ability for people to go through on their Xfinity platform and also
08:54Zoomo to get Newsmax and to download apps so again we believe we can cross sell people into those apps
09:01and we think it's a very positive deal um and we also signed with Hulu Hulu Plus uh was the last major
09:09pay tv cable operator not to have Newsmax and we're going to um we're expected to be on Hulu Plus platforms
09:17this summer that puts us with Fubo that puts us with uh YouTube TV um and a number of other major
09:25players so we are growing and I think you're going to see um a significant growth in revenues ahead and
09:33we expect profits eventually yeah and listen you know the deals as you mentioned are coming in you
09:40know you just talked about the deal with Hulu in May and obviously we just talked about Comcast you know
09:45Newsmax going from this scrappy cable news company to a formidable entertainment company you mentioned
09:50all the other things you guys are doing as well what Chris what do you credit the success of Newsmax to
09:55well one of the things that I think people have to remember when Fox started Rupert Murdoch spent
10:01billions of dollars to create that and it took years to make money and you know there's huge
10:05infrastructure costs Newsmax um was able to develop this company with about 150 million dollars worth of
10:14capital over the past 10 years our cable channel just got into its last final cable agreements and
10:21we see a really huge potential and upside in the years ahead and we did it with a fraction and I think
10:27the success of it is that Newsmax is so widely penetrated not only on our own ecosystem digitally
10:34but social media we have about 20 million cumulative followers across all the social media platforms
10:42so we have a big ability to reach people to promote the Newsmax cable channel the fast channel the plus
10:48service and other products and services that we offer very few companies have this inbuilt marketing
10:55platform that we have incredibly versatile and listen this also will show how much Newsmax has grown
11:04at the end of June Chris I know Newsmax will be joining the US small cap Russell 2000 index I know that has to feel
11:10good what message does that send to your shareholders and the institutional investors and then what what's
11:17in store for news back to the future well this is a really important point Russell 2000 3000 index
11:23the leading small cap mid cap companies in the United States Newsmax is expecting to be part of that we've
11:30been added now for a couple weeks on the list and so that's very exciting what that means is that
11:36there'll be a lot of automatic purchases of our shares through ETFs and other index funds that use
11:43the Russell for its investment guidance and that will give we believe a very significant inflow of
11:49purchases and will benefit not only the company but the shareholders so we think it's a very exciting
11:56opportunity for us but we think it's the beginning of other potential indexes and programs that'll start
12:02taking Newsmax especially when they see that the the the very strong fundamentals the company has
12:08well it was an absolute pleasure talking to you today Chris uh you know great things happening it's a great
12:14times ahead thanks so much for your time well Dan thank you we really appreciate it
