Dolphin Entertainment sees Digital Dept. as growth engine for several years

Dolphin Entertainment issued a letter to shareholders from CEO Bill O’Dowd, which read in part, “The formation of our “Super Group” is now complete following the successful acquisition of Special Projects in Q4 2023. We are excited to enter the next phase in our company’s history. To that end, I am excited to provide significant updates on our strategic initiatives and upcoming catalysts that promise to shape the trajectory of Dolphin Entertainment for years to come. In our core businesses, we anticipate accelerated synergies and cross-selling, which we believe will spur top-line revenue growth and positively impact our bottom line. We expect this to include even more non-traditional entertainment clients that seek access to their consumers through pop culture. Our focus on expanding our client base and capitalizing on emerging market trends reflects the strategic decisions made over the past few quarters and positions us as a company capable of traversing the business landscape with confidence, providing for stability and creating opportunities for organic growth. The Digital Dept. is expected to be one of our growth engines for several years, fueled by continued expansion in the fast-growing influencer marketing segment. We plan to strategically scale into new verticals with significant potential, including the highly lucrative skin care/cosmetics/beauty vertical, which has a long history of branding and co-marketing partnerships with the entertainment industry. Additionally, broadening our talent pool across platforms like TikTok and YouTube will allow us to offer brand partners premium access to the coveted Young Adult segment. These are sizable addressable markets that add another dimension to our growth strategy. We believe they present promising avenues for further diversification and expansion. Receiving equity stakes in some of the assets we are marketing is the long-term strategy we have espoused from the very beginning – ever since we started the Super Group by bringing 42West into the family and uplisting to NASDAQ in 2017. It is the reason we put this group of market-leading agencies together. Dolphin was assembled to harness the power of earned media in culture — quite possibly the most powerful and cost-effective way to reach the U.S. consumer. The search for and evaluation of opportunities to receive equity stakes in assets we are marketing includes all three asset categories wherein entertainment marketing has traditionally influenced the success of the venture – content, consumer products and live events. We expect 2024 to witness: The premiere in theaters of the first of our content investments, the “Blue Angels” documentary in partnership with IMAX. The launch of the first product ideated by Dolphin that is in partnership with one of the A-list celebrities on our talent rosters. The announcement of the first of Dolphin’s owned or co-owned live events, to occur in late 2024 or in 2025. We believe each of these ventures provides great upside potential for Dolphin. We also believe that in time, and with some success, our company’s valuation will include the perceived value of our slate of these ownership stakes, the majority of which we believe will not require any cash investment by Dolphin. These ventures are integral to our broader strategy because they serve as upside catalysts for Dolphin. The “better mousetrap” we believe we have built comes from pairing our ability to source and select these upside opportunities with a self-sustaining core business that experiences steady growth in both the top and bottom lines through the ability to cross-sell services across market-leading agencies. We believe this combination provides the foundation for sustained long-term growth and increased shareholder value. Thus, Dolphin is at the next stage of its journey. We announced our intentions to assemble this group for this purpose seven years ago. We have built the first entertainment marketing Super Group of elite agencies in earned media.”