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Station digital corporate_road_show_lr_medium v21 Station digital corporate_road_show_lr_medium v21 Presentation Transcript

  • 5042 Wilshire Blvd | #26900 | Los Angeles, CA | 90036 CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014 StationDigital July, 2014 Corporate Presentation
  • Legal DisclaimerLegal Disclaimer  The securities contemplated to be sold by the Company will not be registered or qualified under the U.S. Securities Act of 1933, as amended, nor under any state securities laws, nor under the laws of any other country or jurisdiction. The U.S. Securities and Exchange Commission has not approved or disapproved of these securities. Further, it has not determined that this document is accurate or complete, and any investment carries with it risks. Any representation to the contrary is a criminal offense  Forward Looking Statements: This document includes certain forward-looking statements concerning, among other things, StationDigital’s future operations, products, services, plans, and anticipated future performance. Forward-looking statements can be identified by the use of words such as “believes,” “expects,” “may,” “will,” “intends,” “anticipates,” “should,” or comparable terminology, or by discussions of strategy. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Forward looking statements are based on a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond StationDigital’s control, and reflect future business decisions, which are subject to change. Statements about future revenues or financial performance are forward- looking statements that reflect significant assumptions and subjective judgments by StationDigital’s management concerning anticipated results, and those assumptions and judgments may not prove to be correct, and there can be no assurance that such results are attainable or will be realized. Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, and StationDigital undertakes no obligations to update these forward-looking statements for any reason. Neither StationDigital nor its officers and directors assume any responsibility for the accuracy of any projections and other forward-looking statements CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014 StationDigital’s mission is to build and continually improve upon an easy to use platform whereby its users may stream or access any media or purchase digital and physical goods from anywhere, at anytime, and on any device. StationDigital’s mission is to build and continually improve upon an easy to use platform whereby its users may stream or access any media or purchase digital and physical goods from anywhere, at anytime, and on any device.
  • Interesting FactsInteresting Facts  Gartner predicts a 1.9 Trillion Dollar eCommerce market by 2020  Shopping Convergence is happening, digital and physical platforms will combine (Amazon 74.2 Billion annually)  22% rise in Digital Ad Spending on Internet Radio in 2014  Traditional Ad Supremacy Wanes, Marketers Give Greater Attention to Digital Ad Spend  63% of marketing leaders say they will double down on digital ads  TV is Dying, Audience ratings have collapsed  People are Unplugging! 1/5th of cable subscribers aren’t buying TV but only purchasing broadband internet  For the first time ever, the number of cable TV subscribers are declining  Users want to consume and acquire digital and physical goods anywhere, anytime, anyway. CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Internet Radio is booming!Internet Radio is booming!  For the past 4 years, ending with 2013, the internet radio market has grown at triple digit rates in overall US listener hours  ABI Research predicts music streaming services will generate $5.0 billion in revenues this year with revenues growing to $46.0 billion by 2018  The top 15 Internet radio services all grew substantially in both user numbers and revenues in 2013:  Pandora Revenues have consistently grown CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  •  Convergence Consulting Group estimate that 1.6 million U.S. households will have replaced their cable connections with alternate video content models by the end of the current year  Researcher SNL Kagan estimates that by 2014, 46.3 million homes will have at least one TV with a broadband connection to the Internet and 7% of the country’s population, an estimated 8.1 million homes, will switch to online video content instead of cable  "The radio is going to be different, and exactly what it's going to look like is not clear," Strategy Analytics' Lanctot concludes. "It will be a far more contextual, personalized, customized experience and we are unmooring ourselves from the familiar radio dial" Digital Media is Explosive!Digital Media is Explosive! CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Bluetooth and Broadband Access through wireless is allowing for major advances in internet broadcasting and new market penetration Bluetooth and Broadband Access through wireless is allowing for major advances in internet broadcasting and new market penetration The Road Ahead for digital consumer entertainment: The Road Ahead for digital consumer entertainment: Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020 CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Dawn of the StationDigital EraDawn of the StationDigital Era  StationDigital is changing the way we consume digital media  An industry first - the SD Rewards Program  Digital and Physical Good Superstore with Redemption Purchases:  Digital: music, music videos, movies, TV, eBooks, audiobooks, software and video games.  Physical: books, music, shirts, novelties, hats, posters, movies, music, electronics and more  Device Agnostic and Global – Web, Phone, Tablet, Car, TV.  Supports All Sales Models  Ad-Supported, Free-to-Consumer Content  Cloud Locker with Subscription, Rental and Direct Sales  Enterprise Class Architecture with PCI Compliance CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  •  We’re backed by business leaders (Sir Michael Marshall, Steel Pier Capital) and many athletes and celebrities  Public Beta Launch of Web Service - September 10, 2013  Achieved 3.8mm desktop users in first 90 days  Public Beta Launch of Mobile Apps – January 13 – today  Achieved 1.3mm mobile users for Droid and IOS  Social media presence:  768,000 Facebook Likes | 731,000 Twitter Followers A glance at StationDigitalA glance at StationDigital CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  •  Incorporated in September 2012 | Launched Web Version in September, 2013  12 Employees | 80 Offshore Contractors | 181 Suppliers & Partners  Delaware C Corporation publicly traded on the OTCQB: ALDV (April 28, 2014)  500mm Total Authorized  78.046mm Outstanding  Offices in St. Louis (HQ), Tampa, FL, soon to be in New York City and Los Angeles  Staffing to 56 full-time employees in 2014 and 117 in 2015 Company OverviewCompany Overview CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014 Steel Pier Capital
  • Lou Rossi - CEO Timothy Roberts – Founder and Master Digital Architect Ed Storm – COO Terrance Taylor - CFO & Controller Key Management has over 75 years of Infrastructure, Hosting, Software, Music and Video Games Industry, Digital Media, Accounting, Finance, Operations and Technology Seasoned Business Experts, with over 20 years of this in public companies. We are currently searching for key executives to strengthen the CXX level teams for sales, marketing, licensing and technology and also have some very senior board members in talks of coming on from Fortune brands in the advertising and ecommerce spaces Key ManagementKey Management CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • To win SURVIVOR on Internet ISLAND - - Be Portable… - Be Device Agnostic… - And don’t be proprietary… …………OR PERISH !!!!!!!!!! To win SURVIVOR on Internet ISLAND - - Be Portable… - Be Device Agnostic… - And don’t be proprietary… …………OR PERISH !!!!!!!!!! CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Eureka!!Eureka!! HTML5 is finally allowing a web based delivery of media with a TRULY device agnostic solution HTML5 is finally allowing a web based delivery of media with a TRULY device agnostic solution  Responsive Design  New Ad Formats  New Tracking Methods CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • STATIONDIGITAL.COMSTATIONDIGITAL.COM CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • SD MOBILE APP’SSD MOBILE APP’S CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Station Digital’s Future Vision: Free, ad-supported content will always prevail - because it drives consumers to discover and buy new merchandise Station Digital’s Future Vision: Free, ad-supported content will always prevail - because it drives consumers to discover and buy new merchandise CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Advertising is increasing in CPMAdvertising is increasing in CPM CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014 Advertisers shifting quickly from traditional advertising to online Advertisers shifting quickly from traditional advertising to online
  • LEGACY NON ONLINE ADVERTISING…IS DYING. SD Ad PublishingSD Ad Publishing  StationDigital competes dollars in advertising budgets – we are evaluated by perceived return on investment, effectiveness and reach of our advertising products, and the ability to deliver both passion engagement and demographic precision  Competition for Advertisers  High traffic internet brands • Facebook, Google, Yahoo!, Apple  Broadcast Radio Conglomerates • Clear Channel, Cumulus, Emmis, etc.  Other Traditional Media Platforms • ABC, NBC, FOX - TV • New York Times, WSJ, Rolling Stone CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014 Revenue Sources
  • StationDigital’s disruptive model:StationDigital’s disruptive model: Rewarding consumers for listening and watching increases loyalty and viral growth and decreases customer acquisition costs and increases retention by incentivizing them to convert to ecommerce customers. Rewarding consumers for listening and watching increases loyalty and viral growth and decreases customer acquisition costs and increases retention by incentivizing them to convert to ecommerce customers. CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Consumers want complete portability of their content. Period. Nothing else will do. Consumers want complete portability of their content. Period. Nothing else will do. All Media →All Media → Any Device →Any Device → CLOUD LOCKER CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • DEVICES | SD APPDEVICES | SD APP StationDigital will be available on these devices in 2014 giving us access to over 100mm captured eyeballs
  •  Over 1.3 million mobile installs in just 4 months in Android and iOS – projected growth now 1mm installs per month  K Factor = 1 Paid = 1 Organic or Free Install  Over 6.2 million listeners since launch (current)  Ranked in April 2014 as Top 5 of world Internet radio stations – music and 55th cumulative worldwide most downloaded app all categories  Average of 578,000 unique users per month since launch Stats As of 4/23/14 StationDigital MilestonesStationDigital Milestones CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Infrastructure – Built to ScaleInfrastructure – Built to Scale
  •  StationDigital has an opportunity to compete for significant market share in this expanding market  Previous new entrants into this market have done very well in terms of capturing market share  Clear Channel’s iHeartRadio, the second national brand to achieve pre-eminent market share, surpassed 30 million registered users in less than two years after the launch of its current version  Spotify, SoundCloud, Rdio, Tune-in, and Slacker have all achieved prominent brand awareness, large user bases, and high enterprise values  StationDigital has risen into the top national tier of Internet Radio stations in one tenth the time it took any of the others The OpportunityThe Opportunity CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • CAC/MonetizationCAC/Monetization AD REVENUES: - Display - Banner - Rich Media - Takeover - Showcase UPSELL: - Physical Merchandise - Digital Merchandise - Subscriptions, Rentals, Direct Sale AVERAGE CAC: - $.80 / 1.00 CPI - $1.16 CPC - Organic K Factor = 1 BETTER PACKAGING: - Ad Removal - Digital Subscriptions
  •  Overall Quality of Experience  Content Relevance and Diversity  Ease of Use  Price  Accessibility  Perceptions of Advertising Load COMPETITIONCOMPETITION Ultimately consumers will pick the end victor!  StationDigital competes for listeners with other content providers based on the following: Competition for listeners is based on: brand awareness and product reputation, and active visibility compared to other Web based and mobile music and entertainment providers CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  •  Other Radio Providers Ex: Clear Channel, CBS, Sirius XM  Other Internet Audio Content Providers Ex: Pandora, RDIO, Spotify, Beats Music  Other Media/Entertainment Platforms  Ex: Netflix, Hulu, Vevo, YouTube  eCommerce Companies Ex: iTunes, Amazon, Google Play CompetitorsCompetitors CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  •  Automated Play listing and Merchandising Systems  More Robust Catalog of Ad Supported Goods  Music, Music Videos, Movies, TV, eBooks, audiobooks  Combined eCommerce System for conversion to direct sale, rental or subscription.  HTML5/JAVA based – Device Agnostic  Entry to market timing allows for reduced costs by leveraging other SaaS tools which enables us to spend less on technology and more on porting to many devices, catalog and customer acquisition  Loyalty and Rewards Program, Social Integration, Viral Marketing  Enormous catalog of 50mm Skus bookending physical and digital goods allows for increase profits Competitive AdvantagesCompetitive Advantages CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Competitive Finance ActivityCompetitive Finance Activity CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014 Company Amount of Raise/Sale Year Last.fm 280mm sale to CBS 2007 Pandora 240mm equity, with additional rounds since 2011 Songza Acquired by Google for undisclosed amount (20 million estimated) 2014 Turntable.fm 7mm @ 37mm valuation 2011 Spotify 100mm at 1B valuation 2011 Slacker 3mm debt 2011 Rdio 17.5mm equity 2011 TuneIn 16mm equity 2012 Spotify 100mm equity 3B valuation 2012 TuneIn 25mm equity 2013 Spotify 250mm equity at 4B valuation 2013 Beats 60mm equity / sold to Apple at 3B valuation for music service (only 200k users) 2014 StationDigital 5.0mm equity, Public April 2014 2014
  • COMPANY TOTAL ACTIVE MONTHLY USERS MARKET CAP AS OF July 2014 MARKET VALUE PER ACTIVE MONTHLY USER iTunes 575 Million 514.68 Billion $ 895 Netflix 40 Million 28 Billion $ 700 Spotify 24 Million* 4.1 Billion* $ 170 Pandora 72.4 Million 6.1 Billion $ 84 StationDigital 1.2 Million 62.3 Million* $ 52 SD Competitive Market CompsSD Competitive Market Comps CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014 * Estimated
  •  Marketing focus is directed right at mobile device customers  Mobile listening is 90% of the Internet music market  Mobile device real estate is UNDERVALUED right now  Online and Event Marketing How we will grow!How we will grow!  Direct Digital Marketing  Channel Partner Marketing  Viral and Organic Growth  Sponsorships Marketing approaches: CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • SD Online AdsSD Online Ads CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • SD Outdoor Advertising Campaigns SD Outdoor Advertising Campaigns CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • SD Trade Shows and Industry EventsSD Trade Shows and Industry Events CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • Projected Music Users vs. Pandora - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Pandora Actual Jan '10 - Dec '12 StationDigtial Projected Jan '15 - Dec '17
  • Projected Viewers vs. Netflix - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Netflix Actual Jan '10 - Dec '12 StationDigtial Projected Jan '15 - Dec '17
  • Financial Projections Net Income/(Loss) Gross Profit Revenue $(100,000,000) $- $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 $700,000,000 $800,000,000 2015 2016 2017 Net Income/(Loss) Gross Profit Revenue
  • Total Revenue Composition Between Music and Video 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 2016 2017 Revenue - Video Revenue - Music
  • Operating Plan Summary 2015 2016 2017 Revenue Advertising revenue 15,372,553$ 230,273,165$ 642,223,959$ Subscription revenue 1,870,285 23,665,613 93,453,459 Online store revenue, net 319,656 3,975,804 18,017,733 Total revenue 17,562,494 257,914,583 753,695,151 Cost of revenue Cost of revenue 6,391,004 103,840,109 335,814,451 Total cost of revenue 6,391,004 103,840,109 335,814,451 Gross profit 11,171,490 154,074,473 417,880,700 Operating expenses: Product development costs 2,487,098 16,577,790 45,152,369 SG&A 28,753,422 70,464,186 136,121,984 Total operating expenses 31,240,520 87,041,976 181,274,353 Operating income/(loss) (20,069,030)$ 67,032,497$ 236,606,346$
  • Kevin Bachus, Co-Creator of Xbox, Dave & Busters John W. Fanning, Founder of Napster, NetMovies, NetGames, NetCapital Brian Altounian, CEO of Wowio CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014
  • WHY INVEST?WHY INVEST? Everything is moving to Streaming… eCommerce is explosive Meteoric Growth and Valuable User Base Enormous Upside
  • StationDigital thanks you all for Listening and Watching… and please, STAY TUNED! StationDigital thanks you all for Listening and Watching… and please, STAY TUNED! 5042 Wilshire Blvd | #26900 | Los Angeles, CA | 90036 CONFIDENTIAL | ALL RIGHTS RESERVED | StationDigital Corporation 2014