Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Not nice to see the price continue to fall but here are my two cents.
When Melody launched, investors could have been forgiven for thinking that Melody would instantly release their extensive catalogue, begin an sustained promotional campaign and reveal the full extent of their offering (including their full live schedule) quite soon after. All that would make sense if Melody's goal up until now was revenue generation.
Melody could have taken many steps to increase their revenue which for some reason they have chosen not to take.
In my view, their priority has not been revenue generation. It has been product refinement. The Liam Payne show was a fantastic example of this. If revenue would have been the aim, they'd have charged for the show. But it's not. They're ironing out the product and as I've said before, this version of Melody can reasonably called 'Melody Lite'.
There's no reason to think that the revenue figures in February will be impressive when they have such a small amount of revenue generating content.
All that being said, I think it's a better explanation for Melody's actions (or inaction) than the incompetence allegations that get thrown around so casually on here. It's worth remembering that Melody has about 75 employees. They simply do not have the resources to waste on advertising to a market that isn't ready.
They are preparing the launch of the full offering and, in my view, that is where their resources are best focused.
Whilst it's not nice to look at, I see no reason why Melody will be concerned at the current share price. They received investment at 16p and are funded for another 18 months. What happens to the share price between now and their next placing is of little importance to them.
If impatient investors panic and sell, that has no impact on the future success of Melody's business. At this stage, current revenue and share price pale in insignificance to the quality of the product.
If Melody sacrifice revenue today for a more refined, more marketable product tomorrow, I am fully on board with that.
No big reveal yet as far as I've seen. Obviously there's the partnership with Oculus but I wouldn't describe them as a channel. Oculus venues could I be described as a channel at a push but I'm not sure how 'globally prominent' it is.
Hard to know what role the the channel will play. The channel might not necessarily broadcast the show, they might just be promoting it. Hard to read much in to it from the RNS:
'We intend to launch this new functionality with a showcase offering, featuring a live performance of a globally recognised artist in partnership with an equally prominent global media channel.'
One thing's for sure, yesterday's news is just the beginning and we can expect a series of very exciting announcements over the next year. Right now we're only seeing a fraction of what melody has to offer and this time next year it'll be a very different story.
What a day!
Google daydream has been on there for a long time now. SH has said numerous times that melody is 'hardware agnostic' and said in his talk on Oct 24th that melody has partnerships with all the big hardware providers. The FAQs on their website said they'd be launching on all platforms in 2018 and then this changed to a message saying other platforms would be coming soon and to sign up for notifications (presumably as a result of deeper partnership with Oculus).
I noticed something this morning and can only guess what it means. Someone from the Phillipines asked if the show would be available in Asia. Melody's responded that she should DM them about this. Can anything be read into this? Why not just say no? Or yes? Could it be that they replied with a DM saying something like 'watch this space' (that would have been too revealing to write in public) and we'll be hearing something soon? Or are melody deliberately limiting capacity by not launching in new territories until the first show goes ahead without a hitch?
So much to look forward to. Let's not forget that live is only one of 'a series of new initiatives'. And we know that by next summer, there'll be a full calendar of events being streamed from their 70+ festival partners. I've said it before but once the rabbit's out of the hat, there'll be no putting it back in.
Imagine what the new CFO must have seen to persuade him to move to Melody. Things we haven't seen and will only be revealed over the next year or two. I'm sure I remember him posting a photo of a dinner that him and SH and AM had together last Christmas. They've obviously been working together for a while and for him to commit to Melody is such an unbelievable vote of confidence.
So let's assess the evidence.
Exhibit 1 (August 31st): Live events are 'coming down the pipe later this year' (https://youtu.be/45d-6MA_HnM?t=538)
Exhibit 2 (Sept 26th): 'Later this year, MelodyVR will pilot live streaming real-time concerts, offering virtual tickets to sold-out shows.' (http://www.musicweek.com/digital/read/melody-vr-s-steven-hancock-on-how-virtual-reality-is-transforming-the-music-biz/073936)
Exhibit 3 (Oct 24th): 'So coming in the next couple of months is our first real time, live gig' (https://youtu.be/XZwkdCHlTAM?t=571)
Exhibit 4 (Oct 24th): 'Live is our next sort of big milestone pre-Christmas' (https://youtu.be/XZwkdCHlTAM?t=861)
So, what can we learn from this? Well, for at least 2 months, the plan was to have the first live show this year. The question is, is that still the plan?
Possible issue: There's not enough time between now and Christmas
Response: The Coldplay show only had 9 days between the announcement and the gig.
Possible issue: Technical issues are causing the delay
Response: Melody were talking about launching live as far back as Christmas 2016. It seems unlikely that they wouldn't have managed to iron out any technical issues in that time and it also seems unlikely that both AM and SH would have stated the show was this year if they were experiencing technical issues.
Possible issue: They are waiting for a show to sell out before announcing
Response: I think it's unlikely that they would have tied themselves into this kind of uncertainty. They would want to be in control of their destiny. The best way for them to have done this would be for the show to be a bespoke event without physical sales or for the show to feature an artist that would be guaranteed to sell out.
Possible issue: The 'globally renowned artist' they're working with needs more time to prepare their show ahead of a launch of their new album/something similar.
Response: Artists are used to meeting deadlines for tours so there's no reason why this should be any different.
So what can be concluded? Well, until the end of next week, a live show pre Christmas is still possible.
The reason for Melody's delay to launch was for strategic reasons (not incompetence) as it was timed to syncronise with the launch of the Go. In the event that the live show is delayed, I'd like to think that we'd hear some kind of explanation as to why and how it might make sense from a strategic point of view.
So much emphasis is being placed on this one show but Melody 'will soon provide users with the opportunity to access a rich calendar of live performances and events; which feature many of the major recording artists from around the world. Artists billed to perform at our partners events and venues over the coming 12 months include the vast majority of the world's current top 50 artists.'
I think some people show a deep misunderstanding of the nature of Melody's business and how it compares to other businesses like Facebook and Spotify.
Melody is a CONTENT PROVIDER. It is producing licenced, high quality content with no substitutes.
Facebook and Spotify HOST content.
The reason why Facebook isn't going to buy Melody (in my view) is because they have spent the past 5 years doing everything they can to knock-back against anyone who claims they are a publisher. They don't want to take responsibility for the content they host. They host it, they don't create it. If they were to buy Melody and publish what would then be their own content, that would entirely change the nature of their business.
The same thing applies with Spotify. Whilst it's helpful to look at Spotify's user growth over the past few years, it's worth remembering that it has a completely different business model to Melody's. Again, Melody creates unique content that they own. The revenue that they will generate from one live concert is in a different ballpark to the revenue spotify or youtube would get from one 'play'/'view' of someone else's content.
Melody doesn't need to have the same kind of astronomical numbers that Spotify/youtube etc enjoy because the revenue per track/per live show will be far, far higher.
That's not to mention that all of the ad revenue will go to Melody rather than to the content provider like on youtube. Obviously the total revenue will need to be split between the artist and the label but as the content owner, Melody's situation is completely different to facebook, youtube or spotify.
In some ways, Melody and Vevo are very similar (far more similar than Melody is to Spotify/facebook). Both create music content which has the potential to be hosted by the companies themselves or licenced elsewhere. Both have the backing of the major labels and can benefit from the advertising revenues that come with high quality content.
Vevo’s Kevin McGurn recently said the following about Vevo but I think large parts are relevant to Melody:
'With over 350,000 pieces of content, Vevo makes up less than 0.5% of all videos on YouTube, yet according to data from comScore, 43% of YouTube’s monthly audience is watching Vevo content. With Vevo content, a brand can more effectively target where, when, and what it associates with in reaching an audience on YouTube. Vevo’s content is not UGC (user generated content), it’s premium, licensed, and professionally produced, with an enormous and unique global reach. In fact, when we looked at an average video buy on Vevo and YouTube, we saw less than 10% duplication across the audiences reached.
The content is vetted through multiple layers of quality control to ensure the safest environment possible for advertisers including:
Automatic categorization if the word “explicit” is in the title or content tags.
Manual categorization if the content includes any of the following:
Vulgar language
Violence and disturbing imagery
Nudity and sexually suggestive content
Portrayal of harmful or dangerous activities
What this categorization process does is give brands greater transparency into where and how their campaigns run, and the ability to customize how they target. With Vevo, a client’s advertising only runs on premium content, and can be targeted specifically to over 55,000 artists in our catalogue. Our customers also have the option to exclude explicit content. Overall, we believe our clients are better served in the safer environment that Vevo offers on YouTube and other platforms. This approach allows them to maximize reach and minimize risk as they tap into the enormous audience consuming music videos online.'
Obviously Vevo has a far bigger library but the principles he spoke about still apply to Melody.
Melody is also located in the right place from a geographical point of view too. The agglomeration of tech companies around Kings Cross is fast leading to the Silicon Valley-isation of the area and it will soon be seen as the only place for companies like Melody to be doing business.
Now the media circus around Black Friday and Cyber Monday has blown over, we should all be preparing ourselves for takeoff. Could it be that the reason Melody has waiting until December to announce the live event is that it is intended to tie in with the 'global media channel's' Christmas lineup? Could there be a simultaneous broadcast on TV and in VR (like with the world cup)? Still a mystery about who this channel is. It's not often Facebook is described as a channel so could well be someone else
While today certainly hasn't been nice to watch, I have to say I can't see much sense in the timing of this sell-off.
We know that news is coming very soon and that the first live show will be 'pre-Christmas'.
As someone who's followed Melody very carefully for over 2 years, I'm absolutely bemused by any talk of Melody's incompetence/unreliability etc.
The only occasion Melody has stated a concrete(ish) time for something and then not delivered on it is when they said they'd launch on all headsets over the year 2018. That statement has now been removed from their FAQs. The reason why they didn't deliver on this wasn't down to their incompetence but rather is as a result of the deeper partnership with Oculus.
Other than that, there is not a single promise Melody has made and then failed to deliver on. We are still very much on for a 'pre-Christmas' show and, until it doesn't happen, I'm going to believe it will happen.
Melody have not made revenue generation, share price or user numbers their focus so far. They have worked on establishing a very slick product, phenomenal partnerships and an amazing team of staff (amongst other things).
Now all the foundations have been set, 2019 is set to be the year when the user numbers and revenue will become to focus.
I understand investors are impatient but I can't help but think that Melody's meteoric rise has helped contribute to this significant fall. As AM said, many retail investors thought that launch was the end of the journey and people were predicting 30p+ by the end of the year. But as he said, that was just the beginning and so investors have since realised that there is going to be some time before the business takes off.
But a major, major landmark for this business is the introduction of live concerts. This is where the revenue will start to be generated and this is where user numbers will dramatically increase.
I think it shows the naivety of some investors that they criticise Melody based on revenue/ user numbers/ social media followers. Whilst Melody has made these secondary concerns, their focus has really been elsewhere (quite rightly in my view). If Melody were trying to maximise revenue over the past year or two, they would have bulk released all their pre-recorded content and started streaming live concerts when they first started talking about this in late 2016.
But instead they've held back in order to refine the product/partnerships etc. They are aiming to be huge. They want to make the biggest possible impact - not to make a quick buck and be forgotten about in a year's time.
I wouldn't dream of telling people what to do with their money but selling because other people are selling (without considering the imminent news on the horizon) seems as poor a tactic as people who bought crypto-currencies without any kind of understanding of what they were getting into.
I could well be proven wrong and I'm putting my neck on the line a little but time
They have said on multiple occasions that the first live show will be 'pre-Christmas' (e.g. here - https://www.youtube.com/watch?v=XZwkdCHlTAM). It is a not a choice between whether the first live show is before or after Christmas, though.
The first live show will be 'pre-Christmas' and then many more will follow afterwards. Once it's out of the hat, there'll be no putting it back in!
Fair enough Maxba, although on Oct 5th the share price was higher than the average it had been for that month whereas today it's at it's lowest point. Interesting about the Coldplay gig, though I think that's a good benchmark.
If we assume there'll be 2 weeks between the announcement and the show, that means we should be hearing something by Dec 7th at the very latest (since I can't imagine they'd have the first live show on Christmas eve).
Personally, I can't see the sense in exercising warrants or selling shares when we're so close to this potentially game changing news.
As a potentially interesting aside, most of the pages on the Melody site are down (at least they appear to be on the two devices I'm using). Could this mean changes are being made behind the scenes ready for a new site that will feature details of the first live show?
Maxba, why would people exercise warrants when the share is at the lowest point for the past year? That is the absolute worst time surely?!
Sharebuy, the Abba show has been discussed here several times. I am 99% sure that it is nothing to do with MelodyVR.
For a start, the Abba show is not even going to be in virtual reality! There will be virtual hologram style avatars but it will be nothing like the kind of truly VR content Melody has released to date. It is being produced by the BBC and NBC and will be broadcast by the BBC. Look how it's going to work - it has nothing to do with virtual reality (https://www.graphicnews.com/en/pages/38425/ENTERTAINMENT-ABBAs-mysterious-Abbatars-revealed_infographic)
It is going to be a 'global TV event' (not for headsets). The only real connection is that Simon Fuller is behind the Abba project and is working with Melody. But that is a very tenuous connection as he is undoubtedly working on countless projects that are completely independent from each other. I can't see how Melody fits into this.
Scamcap, I think you're right that time is running out to announce a 'pre-Christmas' show. That isn't to say that they've missed any deadlines or that there's any reason to panic. All it means is that news is imminent. In fact, for a 'pre-Christmas' show to take place, it surely has to be announced in the next week or so.
I have to say I find it quite surprising that the live announcement wasn't made in conjunction with the fall in price of the Go. That being said, as long as the price stays low, a few days here or there won't make much of a difference. I can only imagine that Melody is holding back until Black Friday passes. The last thing they'd want is to announce a huge live event and for it to get lost amongst all the Black Friday/Cyber Monday news stories.
If they wait until Wednesday/Thursday this week, there'll still be plenty of time to promote the show and they can hopefully ride of the back of the cheaper headsets and the Oculus adverts. It's worth knowing that the Go is even cheaper in the US and can be picked up for $179 which is about £139.
I'm pretty sure that the 'global media channel' is going to be Facebook given Melody's relationship with Oculus. Imagine how powerful the targeted advertising could be. The day the event is announced, a notification can be sent to millions of fans in a way that will get an infinitely better response than even a prime time TV advert could (as it will be viewed by only those who want to see it). If Oculus is using Melody to promote it's headsets, then I don't think it's unreasonable to expect facebook to promote Melody's concerts. And given the unparalleled reach of facebook, I can't think of any better partner to launch this first live show alongside.
'MelodyVR is available now for the Oculus Go and Samsung Gear VR. If you another kind of device, register your email address at the bottom of the page to find out when the app will be available for you, or follow us on Twitter or our blog for updates.'
This has changed very recently from saying that Melody would be available on all major VR devices in 2018.
I think this change was to be expected given the recently revealed enhanced partnership with Oculus.
Elkinator, I'm happy to be proven wrong but I don't think there's any chance that Melody's first time show will be broadcast anywhere other than on VR devices. The global media channel will be helping with advertising and publicity - not streaming the show. What would the sense be in offering people the show in anything other than VR? The idea is to use the live shows to bring people to the Melody app and VR.
The revenue generation will come from the ticket sales. These sales will grow as the devices sell in higher numbers.
Cunir, I agree that sharing a building with VEVO seems like it could be a strategic move indicating a partnership has been formed but it's worth knowing that they've been somewhat disparaging about VR music videos in the past - https://tinyurl.com/y6vte98q
I know Melody aren't making music videos in the traditional sense, but that seems like a strange interview to give if VEVO are onboard with Melody. Also, what exactly could VEVO offer Melody? Melody's content is going to be streamed through the app. VEVO hosts videos on their site. How would the two work in conjunction with each other? It's definitely a possibility (especially as VEVO is a joint venture between Sony, Warner and Universal who Melody have deals with) but as this stage, it's hard to say exactly what that relationship would look like.
Harrydash, it's an interested point you make about the lack of advertising for the Oculus Go. I think a lot of people have been surprised by the somewhat muted launch. Facebook could flood people's newsfeeds with adverts and there could be huge campaigns across TV, retail and the internet given the financial cloud that Zuckerburg and co have. There has to be a reason why they've held back and I can only think that the Go is a stepping stone from high cost, wired VR devices of a couple of years ago to the kind of low cost, better quality and more compact devices that will come out over the next couple of years.
With regards to the artist choice for launch, given that over the next 6 months there will hopefully have been many live shows, I don't think this first show will be considered all that important. So they could have their superstar today or hold them back for 6 months and it won't really make much difference. In an ideal world you have one superstar today and another in 6 months. Blow your gunpowder every day of the week if possible!
You're also right that the deals Melody has with the labels etc does put up pretty high barriers to entry to any potential competitors. But some artists that Melody have worked with have gone on to do shows in VR with other companies (e.g.Vance Joy) so it's hard to know exactly how exclusive these deals are.
Speaking of Vance Joy, this review of his live VR show is worth reading - https://tinyurl.com/yarhn365
Although this show wasn't from Melody it gives some idea about how social aspect could look like. From the sounds of things, Oculus' offering here was inferior to Melody's as there's no talk of jump spots and the ability to move camera positions throughout the show.
DM2000, there's just over 6 weeks until Christmas so news is going to come any day (they've said the first show will be 'pre Christmas' and they have to tell us about that). I think an RNS is likely to include:
The announcement of the first live show
A schedule of the shows that will follow on from that
News that Melody will be available in Australia, Canada and New Zealand
An announcement that Melody is now available
Ha, bbtablet, I guess it shows that I'm very excited for what's to come. I'd hate for anyone to think I'm ramping though. Everything I've listed is based on what we've been told in interviews etc and not my guesses.
For the sake of balance, though, the possible challenges ahead include (but are not limited to):
Melody's 'showcase' launch could feature an artist that the market does not consider a good indicator of the calibre of the artists to come.
Headset sales may not increase as the rate they're expected to.
There could be technical issues with the live streaming of concerts
Scaling the business at the rate they hope to will pose challenges. There's currently only 75 employees. Spotify has 4000+.
New rival content providers may emerge
The Daily Mail may run stories about how VR will be the downfall of society and how it will stop children being able to communicate properly
A bad brexit outcome could have a negative impact on share prices across the board along with people's disposable incomes
People could continue to remain ignorant to the potential of VR and continue to say it's 'just another 3D TV' style fad
Pirates may find a way of torrenting melody content/providing illegal streams
So some barriers to overcome but nothing from that list looks insurmountable to me
And I forgot to mention that we there will also be social elements to the app where people can watch concerts together with friends. VR will increasingly become a shared experience.
The kind of advertising we've seen from Bullet for My Valentine this week will be far more common and far more impactful with artists directing fans to live streams rather than pre-recorded content.
Photos of people watching their favourite artists in VR will flood instagram, facebook etc. This will be a far more effective way of spreading the word than traditional methods such as stands in highstreet stores or TV advertising.
More details of the partnerships with Microsoft and Facebook will be revealed.
Some of the highest profile artists Melody has signed up with will start to feature - we've not seen any Roc Nation artists yet.
I don't make share price predictions and it's worth bearing in mind that both the Investec note and AM himself said that it would be a few years before Melody starts generating sizeable profits. But as long as Melody follows through on most of what I've listed, I'll be very happy.
Fast forward one year...
Melody has been available for 1.5 years.
The worldwide headset numbers are now approaching 100 million.
Headsets are coming down in price, reducing in size and increasing in quality
5G internet is starting to roll out across major UK cities allowing for smoother, higher quality streams.
Broadcasting in VR is becoming more common as sports, theatre and other sectors begin to make more of the opportunities VR presents.
Melody has had a year of streaming artists' gigs in real time including a season of streams from 70+ festival partners. Nikki Lambert's global marketing strategy has kicked into full gear. A crucial part of this will be forming partnerships with trusted, established partners in key territories.
Artists previously unaware of Melody are now hearing about a new revenue stream that they want to be part of and start reaching out to Melody.
Melody is now available on all VR devices and the Android and ios apps have now been developed to draw in the masses.
Cheap headsets are now sold as part of a ticket bundle at the point of purchase for VR concerts.
Melody is now functional in Canada, Australia and New Zealand along with key territories in Asia.
Melody is a now providing bespoke VR content that will play a part in album launches, teasers etc.
Along with its core content, Melody is also generating revenue from advertising, e-commerce and sponsorship.
Melody begins to reveal some of the AR elements to their business which will include 'playing piano next to your favourite female solo artist'
The content library now reflects a more substantial % of the artists Melody has worked with (which by that point will be 750+)
Melody's partnership with facebook is now bearing fruit and Melody is now listed as part of the Oculus venues schedule (possibly)
Melody has revealed a partnership deal with a major ticket distributor (ticketmaster?) in order to be able to sell virtual tickets to the very people who miss out on getting physical tickets (possibly)
Exciting times ahead...
In fact, these are the 2 high net worth individuals:
https://www.linkedin.com/in/mark-newton-6b269141/
https://www.linkedin.com/in/stefanglaenzer/?originalSubdomain=uk
You can see from the result of the May 2016 general meeting just after the first day of dealings.
While I'm not denying the first live show could be Adele, I don't think there's any reason to think that she was one of the 'high net worth' individuals he was talking about. The people he was referring to are 'music people' who are still 'very much involved in the business' and were 'seed investors' before EVRH listed on AIM.
The first suggestion Adele was involved was long after EVRH acquired Melody (August 2017 and May 2016 respectively).
I think one of the high net worth seed investors that they spoke about are is Simon Cole (https://www.linkedin.com/in/simon-cole-93056118/?originalSubdomain=uk)
I think you know it's ludicrous to suggest that Adele has dropped off the radar for the benefit of MelodyVR! She mentioned why she didn't like touring in an interview I previously posted so, although VR would suit her, there's no way she's scheduling her career around EVRH!
As far as the comedy acts, Melody have hinted that they'll explore other sectors in the future but right now I think it's the right choice to concentrate on music for the foreseeable future. They only have 75 employees. Best for them to walk before they try to run!
Nice to see a rise in the share price this afternoon. I hope the 'showcase' live launch meets all our expectations but it's worth remembering that whether it's an Ed Sheeran level superstar or someone not quite in that category, it's the schedule of live events that follows over the next few months that will have the biggest impact on revenues. So I hope no-one gets carried away or overly disappointed with whatever is announced in the next couple of weeks.
Ed Sheeran is playing at London's Under the Bridge venue on November 19th to 500 people (as pointed out by Pitstop on twitter).
The night is in association with Heart FM (owned by Global). There's already been a link made between Melody and Global by Stu222.
In the event's t&cs, it says:
Each Guest attending the Event acknowledges that he/she is likely to be filmed, recorded and/or photographed and that the Promoter might focus on individual member(s) of the audience; and the resulting content may be publicly disseminated and/or live streamed across a range of media (including social media) for promotional purpose
SH uses Sheeran's first name when referring to him.
They tweeted about him for no apparent reason ages ago (see one of my previous posts).
He's a 'globally renowned artist' who hates ticket scalping.
The gig is pretty unobtainable so would fit the bill of a 'showcase launch'.
But......
Why would they leave it so late to publicise? And it says on Heart's website, 'the only way you can get tickets is through Heart'.
Regardless, there's a clear link between the Ed Sheeran gig on the 21st November and the Capital Jingle Bell Ball on the 8th Dec in that they're both in association with Global who could arguably fit the bill of a 'global media channel'. Maybe Melody will announce both shows in their RNS.
One thing is for sure though. If it's either of those two shows, we'll know about it within a matter of days.
The show was only announced today as well. Maybe they had a deal where they had to wait to announce the first live show until the physical tickets sold out. That could mean tomorrow is the big day...
But....Is Capital a 'global media channel'?
'We intend to launch this new functionality with a showcase offering, featuring a live performance of a globally recognised artist in partnership with an equally prominent global media channel.'
From the sounds of that, the first show will only feature one artist. Would they do that at an event with so many other prominent artists? Plus, presumably each artist only plays for about 30 minutes? Is that enough for to sell tickets for?
Well, speaking of 30 minutes (from the Billboard interview):
How long does the average user engage with the MelodyVR platform?
We have users who will be immersed in a concert and they will stay for the entire length of the show, whether that's 80 minutes or two hours. We also have a lot of people who jump in for half an hour at a time. That 30-minute window is a really nice time for VR. You can jump into this new world, move through different viewpoints and really get a feeling for a gig.
Personally I'm not wholly convinced but it does seem like the most compelling suggestion so far.