Bright Mountain Media Inc

This business description should be read in conjunction with our audited consolidated financial statements and accompanying notes thereto appearing elsewhere in this Annual Report on Form 10-K, which are incorporated herein by this reference.

Unless specifically set forth to the contrary, when used in this Annual Report on Form 10-K the terms “Bright Mountain,” the “Company,” “we,” “our,” “us,” and similar terms refers to Bright Mountain Media, Inc., a Florida corporation, and our subsidiaries.

Business Overview

Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) has an end-to-end digital media and advertising services platform that efficiently connects brands with targeted consumer demographics. We focus on digital publishing, advertising technology, consumer insights, creative and media services.

Our digital publishing division focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio consists of popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies. We use internal and external technologies to constantly improve the effectiveness and efficiency of the content we create. Our publishing division monetizes its audiences through both direct and programmatic advertising sales.

Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies. By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem. Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.

Our consumer insights division focuses on providing primary and secondary research, competitive intelligence, and expert insight to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics, artificial intelligence, and comprehensive market research, to uncover actionable insights that drive informed decision-making.

Our creative services division transforms data into award-winning campaigns. We are uniquely able to leverage insights teams with highly strategic media planning and buying teams to ensure brands not only position their advertising precisely, but also yield impactful business results. Our goal is to combine data-driven decisions with creativity fueled by a deep understanding of modern culture.

Our media services division focuses on advertisers and agencies by providing access to premium inventory, leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and ROI. Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us an indispensable partner in the success of our clients' advertising and marketing endeavors.

•serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns; and

•providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research.

Our Strategy

Leveraging technology, data and insights to power customers’ creative and media strategies.

We Are Built on Advertising Technology

Innovative advertising technology built for modern digital media audiences. Our mission is to transform programmatic advertising through more sophisticated technology—with simpler, more straight-forward integrations—and a culture of true partnership.

We are Powered by Our Data Driven Insights

Our global research and analytics division uncovering not just the ‘what’ but the ‘why’ behind customer behavior, supporting clients’ insights needs with agile tools, CX research, branding, product innovation, data analytics, and more. We go beyond research to deliver integrated expertise and products that fine tune your data strategies, drive bottom line growth, and differentiate in today’s marketplace. Through collaboration with your teams to uncover the human truths that help you activate insight and accelerate growth.

A powerhouse of Millennial, Gen Z and Gen Alpha research, our consumer insights division is the foremost authority on emerging trends, generational insights, and youth behavior empowering companies to see tomorrow.

We Are Creative in Love with Our Craft

A modern creative and media shop that positions brands to be lifted by their audiences with contextually crafted work in social, digital, and traditional channels. We aim to understand what is happening now in humanity and culture and getting prepared for what's next.

We Are The Authority On Moms And Motherhood

Our division offers massive global reach through our engaging content and multicultural audiences. We are here for mom throughout her motherhood journey. Helping families raise happy, kind and confident kids. Delivering diverse voices and perspectives on motherhood.

Market Challenge

According to eMarketer's report, "US Ad Spending 2023", published May 2023, digital ad spending in the US faces its slowest growth rate in over a decade, even though almost $20.0 billion more was anticipated to be spent in 2023 compared to 2022. Most of the new money is going to new channels, rather than those that were popular just a few years ago. Total ad spending for 2023 in the U.S. was expected to reach approximately $350.00 billion. Digital was expected to account for 74.6% of that total, or $263.89 billion. Total media ad spending was anticipated to increase by just 3.8% due to negative growth from traditional media. TV, radio, out-of-home (OOH), and print ad spending were anticipated to collectively contract by 6.3% in 2023, with the bulk of the loss coming from TV.

According to eMarketer, CTV ad spending was set to be the second-fastest growing major ad channel in 2023.

According to eMarketer's report, "Advertising Trends to Watch in 2024", published November 2023, after growing at a compound annual rate of 17.6% over the past 15 years, digital ad spending is expected to settle into year over year growth in the low double digits starting in 2024 and through at least 2027. This is a sign of a mature market that should top $270.0 billion in 2024 and account for over three-quarters of all ad spending.

Industry Outlook

Impact on the U.S. Market

In April 2023, a report was published by Interactive Advertising Bureau ("IAB") titled "Internet Advertising Revenue Report, Full-Year 2022 Results." The report reflected how the digital advertising industry showed resilience in the face of a strained economy. Internet advertising revenues grew 10.8% year-over year (YoY), totaling $209.7 billion. After seeing exponential growth coming out of the pandemic, the highest level of growth seen since 2006, a deceleration in advertising revenues was expected. High inflation rates and economic uncertainty throughout 2022 impacted marketing budgets.

The IAB report states that the programmatic growth trend continued in 2022 as it grew 10.5% year over year and increased its share of overall non-search ad revenue to 12.7% (from 10.8% in 2021).

The IAB report indicated that mobile advertising revenues continue to strengthen with 14.1% YoY growth and ad revenues reaching a record high of $154.1 billion. The continued evolution and expansion of digital environments, the increase in consumption of digital audio formats such as podcasts, plus the continued rollout of 5G and its beneficial impact on VR and AR advertising capabilities, were likely to continue to positively impact mobile ad revenues in 2023.

IAB indicated that they expected to see advertising budgets in 2023 continue to migrate to retail media networks as they offer advertisers access to first-party data for personalization and measurement in closed-loop environments.

Per the IAB report, regulatory uncertainty and continued economic challenges will likely threaten industry profit margins and reduce the rate of economic contributions. As user privacy concerns continue to rise and new state-level regulations are being introduced, it’s becoming increasingly evident that the industry needs to adapt and evolve beyond traditional methods.

Impact on the Worldwide Market

In January 2024, eMarketer published a report titled "Worldwide Digital Ad Spending Forecast 2024". The report stated that ad spending growth will accelerate across the board in 2024, and that digital media, traditional media, and total media ad spending will all grow faster worldwide this year than in 2023. After two years of relative malaise, the outlook is positive on a global scale and in every major region of the world. eMarketer indicated that digital advertising had a better 2023 than they originally predicted.

According to eMarketer's report, the US is expected to account for almost 40% of total worldwide ad spending and 44% of digital ad spending in 2024. In 2023, the US posted its slowest digital ad growth in 14 years of 9.7%, but the world's largest economy still produced $23.8 billion in new digital ad dollars. In other words, in a down year, the US produced more new digital ad spending than almost any other country in the world produced in total. The US is expected to return to double-digit growth for both total and digital ad spending this year, and its share of the worldwide spending in both categories is expected to tick up in the coming years, after taking a slight dip in 2023.

Digital Ad Spending Worldwide, 2022-2027billions, % change and % of total media ad spending

Intellectual Property

We currently rely on a combination of trade secret laws and restrictions on disclosure to protect our intellectual property rights. Our success depends on the protection of the proprietary aspects of our technology as well as our ability to operate without infringing on the proprietary rights of others. We also enter into proprietary information and confidentiality agreements with our employees, consultants and commercial partners and control access to, and distribution of, our software documentation and other proprietary information.

Technology and Product Platforms (Including URL’s)

Our top technical priorities are the security of our systems and the fast and reliable delivery of pages and ads to our users. Our systems are designed to handle processing of personal data, as well as traffic and network growth. We rely on multiple tiers of redundancy/failover and, with respect to our advertising technology business, third-party content delivery networks to achieve our goal of 24 hours-a-day, seven-days-a-week uptime. Regular automated backups protect the integrity of our data. Our servers are continuously monitored by numerous third-party and open-source monitoring and alerting tools.

Competition

We compete with other companies that have significantly greater financial, technical, marketing, and distribution resources.

Most of our competitors have significantly greater financial, technical, marketing and distribution resources as well as greater experience in the industry. There are no assurances we will ever be able to effectively compete in our marketplace. Our websites, ad technology, and monetization solutions may not be competitive with other technologies and/or our websites, ad technology, and monetization solutions may be displaced by newer technology. If this happens, our sales and revenues will likely decline. In addition, our current and potential competitors may establish cooperative relationships with larger companies, to gain access to greater development or marketing resources. Competition may result in price reductions, reduced gross margins and loss of market share.

Customers

Our customers are advertisers, advertising agencies and advertising service organizations seeking to have their respective advertisements placed on one of the many platforms serviced by the Company. For the years ended December 31, 2023 and 2022, two customers represented 23.0% of our revenue and one customer represented 37.7% of our revenue, respectively; both customers have the option to cancel their agreements by providing the Company 10 days and 30 days prior written notice, respectively.

Regulatory Environment

Interest-based advertising, or the use of data to draw inferences about a user’s interests and deliver relevant advertising to that user, has come under increasing scrutiny by legislative, regulatory, and self-regulatory bodies in the U.S. and abroad that focus on consumer protection or data privacy. In particular, this scrutiny has focused on the use of cookies and other technology to collect or aggregate information about Internet users’ online browsing activity. Because we, and our clients, rely upon large volumes of such data collected primarily through cookies, it is essential that we monitor developments in this area domestically and globally, and engage in responsible privacy practices, including providing consumers with notice of the types of data we collect and how we use that data to provide our services.

We rely on IP addresses, geo-location information, and persistent identifiers about Internet users and do not attempt to associate this data with other data that can be used to identify real people. This type of information is considered personal data in some jurisdictions or otherwise may be the subject of future legislation or regulation. The definition of personal data varies by state and country and continues to evolve in ways that may require us to adapt our practices to avoid violating laws or regulations related to the collection, storage, and use of consumer data. For example, some European countries consider IP addresses or unique device identifiers to be personal data subject to heightened legal and regulatory requirements. As a result, our technology platform and business practices must be assessed regularly in each country in which we do business.

There are also several specific foreign laws and regulations governing the collection and use of certain types of consumer data relevant to our business.

For instance, the use and transfer of personal data in the European Union (the "EU") member states is currently governed under the EU Data Protection Directive, which generally prohibits the transfer of personal data of EU subjects outside of the EU, unless the party exporting the data from the EU implements a compliance mechanism designed to ensure that the receiving party will adequately protect such data. In addition, the EU has finalized the General Data Protection Regulation (“GDPR”), which became effective in May 2019. The GDPR sets out higher potential liabilities for certain data protection violations, as well as a greater compliance burden for us in the course of delivering our solution in Europe. Among other requirements, the GDPR obligates companies that process large amounts of personal data about EU residents to implement a number of formal processes and policies reviewing and documenting the privacy implications of the development, acquisition, or use of all new products, technologies, or types of data. Further, the EU is expected to replace the EU Cookie Directive governing the use of technologies to collect consumer information with the EU ePrivacy Regulation. The EU ePrivacy Regulation proposes burdensome requirements around obtaining consent and imposes fines for violations that are materially higher than those imposed under the EU Cookie Directive.

Additionally, our compliance with our privacy policy and our general consumer privacy practices are also subject to review by the Federal Trade Commission and state regulators, which may bring enforcement actions to challenge allegedly unfair and deceptive trade practices, including the violation of privacy policies and representations therein. Certain State Attorneys General may also bring enforcement actions based on comparable state laws or federal laws that permit state-level enforcement. Outside of the U.S., our privacy and data practices are subject to regulation by data protection authorities and other regulators in the countries in which we do business.

Human Capital

Because of the service nature of our business, the quality of personnel is of crucial importance to our continuing success and our employees, including creative, digital, research, media and account specialists, and their skills and relationships with clients, are among our most valuable assets. There is keen competition for qualified employees.

As of December 31, 2023, we had 190 employees, of which 173 were employed in the U.S. and 17 outside of the U.S., in Thailand.

We employ a balanced approach in managing our human capital resources. Depending on where a human-capital management function is most effective or efficient, processes are either managed at the holding company or designated to our operating units to adopt strategies appropriate for their client sector, workforce makeup, talent requirements and business demands.

The holding company retains oversight of all human capital resources and activities, setting standards, providing support and policy guidance, and sharing programs. At the corporate center, centralized human capital management processes include development of human resources governance and policy; executive compensation for senior leaders across the Company; benefits programs; performance planning, development and retention of the Company’s senior executives and key roles in the operating units; and executive development.

The Company sets specific standards for human capital management and, on a yearly basis, assesses each operating unit’s performance in managing and developing its workforce. We undertake human capital initiatives with the aim of ensuring that employees have the high level of competence and commitment our business needs to succeed. We formally assess our operating units against their efforts in the areas of people development, diversity and inclusion, performance management, talent acquisition and organization development in order to drive or support the units’ strategic business and growth goals. Accordingly, the operating units create and deploy skills-training programs, management training, employee goal-setting and feedback platforms, applicant-tracking systems, new-employee onboarding processes, and other programs intended to enhance the performance and engagement of the workforce.

Diversity, Equity and Inclusion are essential priorities for the Company. Our goal is that our talent represents the diversity of our communities and consumers, with a corporate culture that drives belonging, well-being and growth. We believe that such a workplace will enable us to provide cultural insights to help our clients make authentic and responsible connections with their customers. The programs we provide in support of diversity, equity and inclusion include, training and curated and bespoke content, research and tools, to foster awareness and action on an array of critical issues that we believe are vital for the recruitment, retention, advancement, well-being and belonging for people who are part of under-represented groups.

The Company has a 401(K) plan that covers employees that have reached 18 years of age upon commencement of employment. The plan provides for voluntary employee contribution through salary deductions. For the year ended December 31, 2023, and 2022, there were no employer contribution made.

History of Our Company

We were organized as a Florida corporation in 2010 but remained a development stage company until 2013, when we changed our name to Bright Mountain Holdings, Inc., and began building our digital marketing brand in 2014. In 2015, we changed our name again to Bright Mountain Acquisition Corporation, and then to Bright Mountain Media, Inc., as we began acquiring businesses, including e-commerce businesses, and implementing our strategy to transform into a digital publishing and advertising technology holding company. During 2018, we discontinued our e-commerce product sales segment to focus entirely on the advertising segment. In 2020, we acquired Wild Sky Media in the digital publishing area consistent with our strategy to transform into a digital publishing and advertising technology holding company. In 2023, we expanded our focus when we completed the acquisition of two business units of Big Village (Big Village Insights, Inc and Big Village Agency LLC, (together, the “Big Village Entities”)). Through these acquisitions, we have now expanded how we connect with our customers focusing on consumer insights, and creative and media services. We currently have six subsidiaries: CL Media Holdings LLC, Bright Mountain LLC, Mediahouse, LLC, Slutzky & Winshman Ltd, Big-Village Agency LLC, and BV Insights LLC; each of which offers a unique service to our customers. During the year ended December 31, 2023, we terminated operations of Mediahouse, LLC and Slutzky & Winshman Ltd, which were located in the United States and Israel, respectively. At December 31, 2023, these two entities held no employees but had not been dissolved.

Our principal executive offices are located at 6400 Congress Avenue, Suite 2050, Boca Raton, FL 33487, and our

telephone number is (561) 998-2440.

Available Information

The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available free of charge through the “Investor Relations” section of the Company’s website, www.brightmountainmedia.com, as soon as reasonably practical after they are filed with the Securities and Exchange Commission (“SEC”). The SEC maintains a website, www.sec.gov, which contains periodic reports, proxy and information statements, and other information filed electronically with the SEC by the Company. The information on, or that can be accessed through our website is not incorporated by reference in, or considered part of, this Annual Report on Form 10-K.