Member Info for ORLM

Not particularly long. It's quite common for dev projects to take between 6 and 12 months to complete. With teams and systems merging, new learnings and UX considerations, wireframing, testing etc, I think autumn is reasonable, perhaps even a little optimistic.

Helpful!

A fair point BA! Nonetheless, it would be great to get clarity whether the group's new long term debt position is:

A) $39m (44m - 30m + 25m)
B) $69m (44m + 25m)

I suspect the latter.

It's not clear - if anyone more in the know can confirm that, please shout. I get the impression the $30m was to write off other company loans rather than to wipe out the $44m debt which seems based around artist royalties.

Agree. Interest rates are very high, but also understandable given the current status of the business. Risk vs Reward 'n all that!

Quick question: Does anyone know whether the $30m debt that's being written off is part of the original $44m debt burden that was being absorbed? I get the impression it's separate as it comes across as more of a series of loans rather than royalties. It's a little unclear to me.

Agree. All aboard the MVR train! Pleasant journey ahead.

Minus the deductions of the rev share model Lofas! ??

5% conversion is hugely overstating the reality IMO. It's one thing to follow someone but another to like them enough to part ways with your money using an unfamiliar platform. Best case, I would expect nothing greater than 1.5% conversion at this point in time in the run up to Black Friday and Christmas where people are likely to want to spend disposable income on gifts and essentials. My personal expectation is that uptake will be closer to 0.5%.

Brand awareness, positive feedback on these early gigs and a strong people pulse will help accelerate momentum in 2021.

At least the fake news of 3m active Napster subscribers was put to bed with confirmation it is actually closer to 1m. Those average revenue per customer numbers just weren't stacking up with the pricing model.

@Italian - there could be a different combination of approaches being used. Notes/debentures may come into play where long term debt has been taken on to raise the capital to acquire the subsidised shares that have been sidelined for RealNetworks. Details of the finance structure have not yet been revealed to my knowledge. If MVR have borrowed to buy the allocation, there will be no further dilution. That may also explain why ownership of the 200m has not yet been declared.

@Henry - perhaps the 200m share difference is the result of the allocation to RealNetworks for the Napster deal? I think I read that was more or less what they were getting alongside a $15m cash payment. Could be wrong though.

With Believe Distribution and TuneCore initiatives being driven behind the scenes, this opens up a lot of opportunity to strike first with the most talented fresh faces.

https://us.napster.com/artist_labels

It may be a condition that TM prices have to be cheaper in return for MVR advertising benefits. Additionally, if TM are implementing the usual £2.50 booking fee, the landed price that a customer pays will be comparable on both platforms.

Let's hope so Mel!

For those interested, 6 platforms nicely compared by CNET in table format (Napster excluded)

https://www.cnet.com/google-amp/news/best-music-streaming-service-for-2020-spotify-apple-amazon-and-youtube-music/

Who says Napster are generating $30m per month in rev? 2019 annual revenue was $113m with profit of $1.8m. This suggests they are getting an average annual revenue of $37 per customer making a profit of $0.6 per customer.

How many of the 3m quoted customers are regular active users? Data implies it's probably no more than a third. Probably less when you factor in the B2B/B2C revenue split (approx 50/50 from the notes I read)

Cost structure needs improving with a need to re-engage and upsell premium services in parallel. MVR will be instrumental in driving that.

Along with debt burden, that's why the buy price is what it is.

Max - primary target audience for me would be young families and 16 to 30 y/o, with 30-45 as an important, but secondary user base. Freshness required for the younger age groups and their children over the next couple of decades.

35+ for theatre.

For me, Napster is undoubtedly the more recognised name, but it's also dated and synonymous with mixed sentiment - familiar to consumers aged 35+. MVR group need to be forward thinking with their branding rather than relying on a bygone era. Whilst the acquisition brings positives, I think it would be a wrong move to lose their identity as a young, fresh organisation looking to disrupt the space. There's no reason why they can't use the Napster brand name to build awareness of Melody in their campaigns, e.g. Napster by MelodyVR.

Fair point on the Telco arrangement Puddin. Consumers may now have a much more compelling proposition to choose as an O2 incentive if MVR offer temporary free or discounted subscriptions after the takeover. Personal interests and bias aside, I'd snap that up myself with a new contract if I had unlimited access to 90m songs and VR content. It may now be interpreted as a credible, value-add Spotify alternative instead of a high potential, misunderstood VR 'gimmick' in the segment.

3m new Napster customers +
25m potential O2 customers where value can be added to their phone contract experience

Huge!

Positive news that will definitely elevate the group globally. Guaranteed subscription revenue (50/50 balance between D2C and B2B), NASDAQ exposure, a massive back catalogue and new platform proposition likely to help compete with the big guns, an entry point into new territories and significant data, talent and expertise to continue the development journey. Profitability will remain an issue for a while but confident that can turn around in the medium term.