VNUE, Inc. (OTC: VNUE) is a publicly traded music technology company, that offers a suite of products and services that monetize and monitor music for artists, labels, performing rights organizations, publishers, writers, radio stations, venues, restaurants, bars, and other stakeholders in music. The company’s Set.fm™ consumer app platform allows fans to purchase the concert they just experienced instantly on their mobile device, and “instant” physical collectible products are recorded and sold at shows and online through the company’s exclusive partner DiscLive Network™,the 15-year pioneer in “instant live” recording. The company’s Soundstr™, technology is a comprehensive music identification and rights management Cloud platform that, when fully deployed, will accurately track and audit public performances of music, creating a more transparent ecosystem for general music licensing and associated royalty payments, and will help to ensure the correct stakeholders are paid through the use of our “big data” collection.
DiscLive and set.fm provide fans with “instant” experiential content, so that they may walk out of a concert and take home their experience. The concert never ends with DiscLive and Set.fm.
Physical products consist of double CD sets, handsomely packaged in high-quality digipaks, and mixed and mastered “on the fly,” where fans walk out with the product. Set.fm allows fans to receive the same content directly on their mobile device. All of this happens within minutes after a show.
What We do
Teams follow tours and record major artists and release high quality products instantly via set.fm mobile app and DiscLive physical products (online and onsite), capturing the emotion of the moment and translating that to sales. Set.fm also offers “indie” artists a free “Set.fm Studio” app to record themselves and sell their music on our platform. DiscLive is the pioneer, and VNUE’s CEO helmed that company since 2004, as well as EMI/Capitol Records version (2009-2012), called “Abbey Road Live”. Thousands of shows have been recorded all over the world and tens of thousands of products sold. Major artist clients (past and current) include Rob Thomas, Peter Frampton, King’s X, Bad Company, Slash, Seether, Devo, Blondie, and many others.
Size of the Market
According to Statistica, the global music business is currently valued at $51.5 billion. Within that market, live music revenue is projected to be over $31 billion by 2022, according to Pricewaterhouse Coopers. With sufficient capital, we expect our experiential products to capture between $50-$100 million of that annual market within three years.
How We Make Money
Based on our team’s 14+ years of operations (through DiscLive, Abbey Road Live when aligned with EMI, and Set.fm), thousands of shows recorded around the world, and our data collection, our average sales conversion is 15%, with product prices averaging $25. This means at a show of 1000 people attending, 150 of those people would purchase one of our products. With just ten tours of 20 tour dates each, and an audience of only 2500 per show, revenue potential is $1.875 million. We also market our products worldwide through our e-Commerce websites and through effective use of social networks.
Plans for Growth
This is a model that is scaled through the use of technology, software and hardware that we have specifically assembled to address our proprietary business practices which have been honed over the years, staffed with readily available contract personnel that we train specifically for our model. This does not age out. It is very much the “Ray Kroc” model, translated to music services, where the processes are repeatable, and we have an unbeatable product and service line. Since the business is primarily built on relationships, our ability to scale is only limited by access to capital. Scaling the opportunity is as straightforward as accessing the capital to acquire the equipment and contract resource to cover more tours.
SOUNDSTR™
VNUE acquired the Soundstr technology in mid-2018. Soundstr is a patent-pending hardware/cloud-based Music Recognition Technology (MRT) platform that some have compared to the app “Shazam,” but which is focused on businesses such as radio stations, bars, restaurants, and other real-world scenarios that involve the public performance of music.
What We Do
Anywhere that music is played in public, such as radio stations, bars, restaurants, and other businesses, it must be licensed. Organizations called “Performing Rights Organizations,” a.k.a. PROs, are responsible for assessing and collecting royalties. Unfortunately, there has previously been no technology to accurately track and audit exactly what music is being played, and consequently licensees have to agree to “blanket” agreements, which are usually expensive, and whereby any music that a PRO is responsible for would be licensed, whether or not it is actually played. The problem with this scenario is that due to the lack of tracking technology, there is inherent inaccuracy in which stakeholders (usually writers and artists) are paid, and further to that, in some cases, only a fraction of that PROs catalog is actually played. Soundstr has been created to address this, streamline it, and eliminate errors in royalty allocation. Soundstr listens to music, records it, and uploads it to the Cloud, where it is processed for identification via artificial intelligence (AI) and other means. Once the music is identified, several industry-leading databases are accessed to assemble deep metadata, and further processing is accomplished to build our own deep, authoritative database so that VNUE can create an accurate audit record of what has actually been played, and help to ensure the correct stakeholders are paid – while at the same time encouraging unlicensed venues to become licensed, and through the use of data, giving businesses the ability to negotiate more competitive licensing fees. Eventually, our system will support direct licensing. This creates a win for everyone involved – writers, publishers, artists, PROs, venues, and the other stakeholders.
Size of the Market
There are more than 15,000 radio stations in the USA, and 44,000 worldwide. There are over 700,000 bars, taverns and restaurants in the US, and millions globally. Between the combined segments there is more than $500 million potential in recurring revenue per year. There are even more opportunities in various other verticals.
How We Make Money
Soundstr is primarily a subscription model, and currently is about 80% complete (hardware is already 100% complete). Further development is required for additional automation. For radio stations, the unit is deployed at a cost of (confidential) per install to each station, and a recommended monthly rate of (confidential) depending upon the scope of the market. In addition to the subscription amount, we will also charge a percentage of the net savings from being able to reduce the licensing fees radio stations pay to PROs. For bars, restaurants, and other similar “brick and mortar” businesses, the charge is (confidential) per month. Soundstr also has a built-in “beacon” technology to allow VNUE to push targeted advertising using geo-centric mobile applications, which will be deployed at a later date. That revenue offsets the cost to the business owner and adds additional revenue to VNUE’s profit center.
Plans for Growth
Initially Soundstr will be rolled out to radio, and then to brick and mortar establishments. This is because there is more opportunity to scale quickly in radio, with large consolidated radio groups having single decision makers, rather than thousands upon thousands of individual business owners. For radio stations and other “professional” clients, VNUE will install the Soundstr devices and provide fee-based services. Soundstr is planned to be a self-installed item for brick and mortar establishments, which will be fulfilled via Amazon, allowing for greater scale and lower cost. Our plan is to have 450 devices deployed within 12 months. These units will get us to approximately $1.21 million in revenue, deployed almost exclusively in radio stations. Assuming we are able to build and deploy 10,000 units, revenues should hit $36 million annually, not taking into account additional revenues from anticipated reduction in fees charged to clients by the PROs.
By the end of year three, we hope to have a combination of radio stations and brick and mortar establishments generating $166 million in revenue, not including additional opportunities such as advertising revenue, and sales of big data, etc.
LEADERSHIP
VNUE is led by a team of music and technology veterans, with both large company and startup experience, all of whom possess deep relationships and multiple successes, including exits.
Zach Bair, Chief Executive Officer & Chairman of the Board - Founder & Former CEO of Voyence; Founder & former CEO of Immediatek (IMKI), CEO of DiscLive; former president Abbey Road Live Americas (EMI Music); founder owner of multiple music venues; 30+ years of experience in technology and the music business; lifelong musician, visionary, and inventor with multiple patents to his credit.
Lou Mann Executive Vice President and Board Member - Former Exec VP and General Manager of Capitol Records; former president of Media Properties for House of Blues; former executive with MCA records. 30+ years in music.
Jim King, Chief Technology Officer - Former SVP Technology, BMI; former “C” level roles at McGraw-Hill, Brightpoint, PR Newswire and others; president and founder of CoreRights and multiple startups; expertise in blockchain technology and music rights management.
Jock Weaver - Former president of Hard Rock Café International, who took that company public on the London and American stock exchanges simultaneously; founded TBA Entertainment and grew it into one of the larger live event companies in the nation at the time, before selling it to a group including Whitney Capital, Irving Azoff and Bob Geddes; he brings strong finance and live music industry knowledge to VNUE.
Tony Cardenas-Montana, Chief Content Officer and VP Artist Relations & Board Member - Founder and former president DiskFaktory; platinum-selling musician and writer; Longtime tour coordinator with DiscLive.
Nan and Bob Kingsley, Advisor - Legendary Country Music DJ Bob Kingsley and his wife/business manager Nan Kingsley are an important part of VNUE’s radio strategy, as well as our strategy in country music. With over 40 years in radio, and with a syndicated show on over 300 stations, the Kingsleys bring a vast amount of value and experience to VNUE, and our strategy with Soundstr.
Nick Lippman, Advisor - Nick is one-half of the father/son duo of Lippman Entertainment, an artist management firm representing such artists as Matchbox Twenty, Rob Thomas, Ryan Cabrera, and in the past managed artists like David Bowie, George Michael, and many others. Nick has spearheaded many technical innovations with his clients, including holographic videos and “instant live” downloads with VNUE’s set.fm.
VNUE is all about passionate, experienced people, creating new revenue streams for artists, labels, venues, publishers, writers, and more, and importantly, protecting the rights of the stakeholders. VNUE is poised to introduce a paradigm shift in the way the music business has been conducted for over 100 years.
FORWARD LOOKING STATEMENTS
Our discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date (April 2019) of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout this discussion, we attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading “Risk Factors.”
