Ben Kohn: So — thanks, Jim. It’s Ben. So, when you look at the business, we take 20% of what the creator makes. We talked about our fixed costs. So, the run rate right now, assuming no growth is $15 million, right, with the 9% weekly CAGR, we are growing at. The fixed cost, call it, roughly $6 million for the year. And then the variable cost for that business are based on your credit card processing fees for the most part
Lance Barton: And hosting.
Ben Kohn: And hosting, but that doesn’t really increase substantially based on the deals we have. So, it really comes down to credit card fees that we believe that we’re in the process of reducing. And so if you get to, call it, a high single digits, very low double-digits business, you were breaking even to making money.
Jim Duffy: I’m sorry. I understand the high single digits to low double-digits. That’s the margin…
Ben Kohn: $8 million. So, if your fixed costs are $6 million, I don’t want to get into all the specifics of the credit card fees. But when you start to get to high single digit millions, right, you have $6 million of fixed costs. You put a variable cost on that. So, you get into the upper end of that–
Jim Duffy: You’re saying not GMV in the high single digits, you’re seeing revenue contribution. So, you’d be doing 5x the revenue contribution in GMV.
Ben Kohn: Correct. So, if you’re doing $15 million of GMV today with no growth moving forward, that generates $3 million of revenue. And so the business is growing at 9% weekly CAGR since September, 18% over the last four weeks. And so, when you start to extrapolate that out from a growth perspective moving forward, if you grew at 9%, you would do $135 million of GMV or $27 million of revenue for us, right? Then the business is very, very profitable. If you were doing $50 million of GMV, that’s $10 million of revenue to us. We are making money.
Jim Duffy: Okay. I follow you. What are the incremental areas for investment in that business this year? What’s — for instance, what’s the cost to relaunch the magazine? Are there any other platform expenses we should think about as components of the cost base?
Ben Kohn: No. Our costs are pretty much fixed at this point. It’s really the internal team that we have built and the engineers that we have hired. And so, outside of that, I don’t see any other costs. What we — and I don’t want to talk about the product roadmap because one technology product roadmaps always move. And if I put something out there, I will disappoint someone and then competitors. But what I will say is we have a very detailed product roadmap moving forward to continue to enhance the experience for the creators and for the users. And we launched a new profile that has been very well received with creators last week. We relaunched an enhanced discovery as what I would say is really step one in discovery with a lot more coming.
And then there’s a number of other product features as we look to consolidate what I would say is one-off or standalone other legacy products that we have into one ecosystem moving forward. But our fixed costs will not increase with that.
Jim Duffy: Okay. And then my next question, I wanted to ask about the business model change for Playboy D2C. What’s the timeframe in which you’d expect to execute on that? Understand number of different options.
