Digital Entertainment & Media
Almost exactly six years ago, Apple launched the first iPhone. It was a small device that many dismissed as a toy. In reality Steve put a supercomputer in our pocket — we just didn’t know it. And like super computers before, it came with immense capabilities and brought about an opportunity to rethink, reimagine and reinvent how we live, work, create and consume. (http://pandodaily.com)
With astonishing speed, global take-up of new technology has triggered a dramatic change in the daily media and entertainment consumption and behavior of consumers, such that the entertainment and media industry has, in part, migrated to the online digital platform in a manner that few people could have conceived.
Dramatically Impact on production and delivery costs
At the same time technology was greatly impacting the cost of HD video production, and the delivery of content with developments so dramatic that HD quality video can now be captured and streamed live to a global audience from a smartphone. Digital is now at the core of “business-as-usual’ according to the Latest PwC entertainment & media industry outlook.
Digital has impacted every aspect of the entertainment industry, growing from *$449 billion to *$745 billion in value from 1998 to 2010, consumer spending on entertainment as a percentage of income increased from *4.9% in 2000 to *5.62% by 2008, up *15%, while employment in the entertainment sector grew by approximately *20% from 1998 to 2008, and the number of independent artists grew by *43%. (*"The Sky is Rising", a report on the state of the entertainment industry, by Mike Masnick)
Connectivity to broadband Internet in the U.S. (U.S. = 11.4% of world’s internet users) totaled approximately 96 million locations as 2013 began while more than 180 million wireless subscribers gained access via smartphones and tablets.
Online video brands Netflix, Amazon, Hulu and YouTube are today among new household names from the digital world. Not only has online video established itself, it has fast become a favorite for both mobile device and home TV users, and in the process it is taking the spotlight away from cable and terrestrial TV, creating new opportunities in the process.
Cisco® Visual Networking Index (VNI), an ongoing initiative to track and forecast the impact of visual networking applications reported and projected; Internet video to TV (watching online video on TV) doubled in 2011, Video-on-demand (VOD) traffic will triple by 2016, Online video users are expected to double to 1.5 billion in 2016 and globally, online video traffic will be 55% of all consumer Internet traffic in 2016.
At $9.6 billion, first quarter 2013 digital advertising revenues in the U.S. hit landmark numbers, according to a survey conducted by the Interactive Advertising Bureau (IAB) and PwC U.S. The figure is a 15.6% increase over the $8.3 billion figure reported in the first quarter 2012. E-marketer projects that online video advertising spending will nearly double in only four years from $4.14 billion dollars in 2013 to $8.04 billion by 2016, a 25% compound annual growth rate (CAGR).
This is a disruptive change, and it is impacting the entertainment and media sector at every level and within every consumer demographic. In the U.S. over 83% of Internet users in each age group now consume video online, including 84% of Internet users over the age of 55. (ComScore Inc.). The traditional entertainment & media model will continue to face massive challenges as the major broadcasters are forced to compete with streamline startups. The extent of the change that is coming in management’s assessment is something few can visualize at this early stage.
The key corner stones of the traditional broadcasting industry model today are to a great extent obsolete as new technology has effectively bypassed the industry protections offered by licensing, while new business models deliver a comprehensive net benefit to many consumers. Consumers are onboard for the digital journey and ready to explore and spend. Due to such circumstances a unique market opportunity has emerged for live online video, targeting narrow niche entertainment genres.
Live Global Stream, Inc. plans to take full advantage of the rapid take up of live video streaming, a new subsector of Broadcasting & Entertainment. The Live Global Stream model brings fans of “narrow niche” entertainment & media genres together in online social communities and provides exclusive, high quality, interactive, live video content, special events, merchandise, and an up-close and personal experience for narrow niche genre fans, while avoiding head on completion for the mainstream viewers and advertising revenue.
The company is implementing a strategy based around what it calls optimized segmentation, achieved by looking for narrower fan groups within existing popular niche genres. After identifying these unique narrow niches of critical mass the company will customize brands, create exclusive live video content, interactive experiences and provide bespoke services to meet the needs of the fans of the selected narrow niche.
New technology is fueling the shift from the traditional one-size-fits-all entertainment and media model (mass market) to a new narrow niche model where there are literally 1000’s of profitable narrow niche markets are set to emerge as consumers start looking for more personally relevant content experiences. Traditional media giants are not geared for the seismic shift taking place today, the advancement of technology encourages and enables far flung global fans, of narrow niche market genres to congregate online in real time, interact socially and transact commercially and form new markets of commercial critical mass that generate profit. Live Global Stream, Inc. is positioned to become a market leader in online narrow niche entertainment and media.
The company has completed extensive research and development over 3 years and completed trial operations, developed a detailed launch plan, developed initial narrow niche brands, secured an online fan base of over 28,000 fans for the initial launch brand and developed a capital funding strategy that will allow the company to stage its launch of eight individual narrow niche brands and their independent businesses over 5 years. Each brand will develop independently of the parent company. The scheduled launch of new brand businesses is driven strictly by completion of pre-launch planning of each brand and completion of the related funding stage.
Three stage launch program
The launch is planned to take place in three stages over five years and will include a three stage US$7Million development funding program. The initial stage will focus on the recruitment of the initial launch team, the launch of the first operational brand business and preparation for the launch of the second brand business and second development funding round. The company is setting foundation stones during the first stage of the launch.
The second stage will focus on the launch of the second entertainment brand and preparation for the third development funding round. The company will launch 8 narrow niche brands including; 5 narrow niche entertainment brands, and 3 narrow niche service brands. The launch will be completed over 5 years to allow adequate time for the ongoing refinement of the model as operational experience is gained, prelaunch development of the entertainment and service brands is completed and recruitment and development of a highly skilled core operations team is undertaken.
The Initial brand
The initial launch brand business is HillbilliesVille, and it deliberately targets only the fans of traditional country music. The brand name was created by bring together the oldest media name associated with country music “The Hillbilly Hit Parade” and adding the community or village description through the addition of Ville, HillbilliesVille is the place for all traditional country music stakeholders to meet online.
Traditional country music is a significant and narrow niche of the broader country music genre with an estimated 3.1 Million U.S. Traditional country music fans, while the broader country genre inclusive of traditional country music fans claims *98 Million US fans (*Country Music Association USA). Traditional country music also has millions more loyal fans around the globally over and above the estimated 3.1 Million US based fans.
Traditional country music fans have found themselves disenfranchised as the Nashville Tennessee based country music industry has shifted to a new Pop culture and sound as its stakeholders struggle with the massive changes the digital platform has presented.
The HillbilliesVille brand strategy is to fill the void left by the Nashville based industry. Through independent assessment of the narrow niche, Live Global Stream has determined that today the artists, musicians, publishers, producers, song writers and fans of traditional country music find themselves without a focal point, a home, the place Nashville once represented for traditional country music. The HillbilliesVille brand business will provide a pathway forward and an all-encompassing home for the stakeholders of Traditional Country Music. The successful launch of the initial brand over the first five years of operation will create revenue of US$40Million and it is projected to generate a NPAT of approx. US$16Million, these projections assume the brand will secure 3000 monthly subscribers at the time of launch and grow to securing 2% (64,000) subscribers from the estimated 3.1 Million U.S. Traditional country music fans over the first 5 years of operation.
The launch event
The HillbilliesVille brand business will be launched as a part of Live Global Stream’s TEXAS CountryFEST & Dallas Western Swing Ball to be promoted, presented and streamed live to a global audience of subscribers by HillbilliesVille Inc. The event is scheduled to be held at the World Famous Fair Park Dallas, Texas the home of the TEXAS State Fair, and to take place at the end of March 2014. The Texas CountryFEST will bring together the largest gathering of professional traditional country artists and fans seen in Texas in years. It will feature traditional country legends, established traditional country stars, highly talented established artists and new talent. Talent for the festival will come from the USA, Australia and Canada and the event will be a major publicity generating activity for the HillbilliesVille brand business.
There are no direct competitors to the HillbilliesVille brand, however there is a vibrant multi-million dollar country music industry polarized around the Nashville cartels Pop country genre, management will present HillbilliesVille as an underdog brand representing a global alternative with a clearly defined vision and mission, offering a full range of competitive partnering and commercial opportunities for interested corporations.
The company will implement a US$7Million development funding program that is an integral component of the three stage launch plan. US$7Million in development capital funding will be raised over 3 stages, consisting of two US$1Million dollar rounds and a final US$5Million round.
The strategy has been developed to ensure the company has time to evolve and mature, is viable and well-funded at all times during the staged launch, with the funding matching operational needs.
This staged launch and Funding strategy will position the company so it can deliver maximum returns to all investors by; accessing capital during the three stages of development as significant milestones are achieved, minimizing operational pressure, reducing the risks associated with attempting too much too quickly and alleviating the cash burn that is typically associated with high pressure early stage online companies, while positioning the enterprise for solid future growth.
Stage 1 Development Funding
The company is now completing the first stage of development funding, raising US$1 Million via offering a total of 10,000 PARTICIPATING, CUMULATIVE, CONVERTIBLE Preference shares to accredited investors who meet the Accreditation Requirements, as set forth under the Securities Act of 1933 Sub-Section 4(2), Regulation D, 504. The PARTICIPATING, CUMULATIVE, CONVERTIBLE Preference shares offer a 9.25% CUMULATIVE dividend, 15% participation in operating profits and the option to convert to common stock.
Management has planned an exit strategy for the Preferred Unit-holders in the Company in the form of a Call price of $110.00 per Unit (110% of Issues Price) at or after the Call date of 10/31/2018. Aggregate conversion into Fifteen Percent (15%) of the company’s Class A Voting Membership interests is also available up to 10/31/2017. Based on redemption of the shares at 110% PAR at the end of the 5 years and the projected participation rates, the IRR on the investment is 22.66%.
Live Global Stream is founded and managed by a niche entertainment professional that has over 30 years of success in niche entertainment, media and sports including niche media business establishment. Mr. Kiepe has worked in the entertainment & media industry for the majority of his career in various functions. He was successful in launching several new niche media operations and also successful in turning around many other niche media operations throughout his career. He also successfully represented sporting celebrities and held the marketing rights to several sporting and cultural events in Australia in a diverse portfolio from Professional Rodeo to US Indy Car Drives. He developed the Live Global Stream business model and vision for the company and has been the driving force behind the funding and the intensive research and development phase and now he spearheads the launch of the company’s first brand.
The company has developed a conservative strategy using only proven methods underpinned by a global vision and a unique and unwavering commitment to achieve growth from the establishment and operation of fully funded and profitable narrow niche brands. Each brand will develop independently of the parent company. The scheduled launch of new brand businesses is driven by completion of pre-launch planning of each brand and completion of individual brand development funding rounds. Unlike many new enterprises in the online media world Live Global Stream is not a technology company, it is a new narrow niche content producer creating IP and narrow niche brands and development teams, using the latest technology based solutions to keep efficiency high and production costs low while opening low cost global distribution channels, allowing the company to distribute its content to fans of under serviced narrow niche genres globally.
The company will move to launch multiple brands across multiple narrow niche markets once it completes the launch phase. Live Global Stream will not become a direct competitor of any mainstream entertainment or media network and will most likely look for partnering opportunities with traditional content owners or distributors. – less