Cliq Digital: The German Netflix

Cliq Digital -> Covid Mask from 2020

Cliq Digital was, for a giddy stretch of 2022–2023, a German small-cap darling. It licensed and bundled streaming content – films, music, games, audiobooks – into subscription packages, and sold those packages through aggressive online performance marketing. Revenue and profits soared; the dividend climbed to a remarkable €1.79 a share, a yield of around ten per cent; and the share price rocketed from roughly €2 to a peak of €41.30. Income investors fell in love.

The museum’s skeptics, however, kept staring at the engine. To generate all that growth, Cliq spent over €120 million a year on marketing – more than a third of its entire revenue. For scale: Netflix, an actual content company, spends on the order of seven per cent of revenue on marketing. When a third of your sales must be poured back into advertising just to keep the lights flashing, you are not really a media company.

And then the number that turned a growth story into a museum exhibit. On the company’s own figures, the subscribers it was paying so dearly to acquire stuck around, on average, about eight months. That is the whole thesis in one statistic: Cliq was renting customers by the month, spending heavily up front to win them, and watching them drift away before the economics had time to work. It is a treadmill – and a treadmill requires ever-increasing effort merely to stay in the same place.

Treadmills are wonderful while you are speeding up and catastrophic the moment you slow down. In January 2024 the 2023 results disappointed. Then a 2024 profit warning knocked the shares around 30 per cent in a matter of hours, from roughly €16.50 toward €10, as the company conceded revenue would come in well below its earlier guidance. The lavish dividend – the very thing that had drawn the income crowd – was scrapped, and in early 2025 a €26.6 million goodwill write-down formally admitted that the business was worth a good deal less than the bull market had decided.

Cliq is the specimen of the moment a market collectively re-learns an old truth: that the cost of acquiring a customer is a cost, not an asset – the same lesson taught, in a regulated key, by our Vardia exhibit two display cases down.

A 10% dividend funded by an accelerating marketing invoice is not a yield. It is a countdown with good optics.