I dont discount the licence model..but god!...its got to be for the right upfront price. It just after 30 yrs, I've very rarely, if at all, seen a licence deal in the nacsent part of a product's growth curve give any short or medium term value to the originator.
Its taken NEA 3 years, 2 with a false start, to realise the correct monetisation portal. And it'll take another 1-2 years to optimise the product range to chip within, say 75%, of a universal platform of products/depth/paywall/infastructure.
Busting and creating new markets/distribution channels in new countries is as hard as it gets. But I still recon its so worth NEA to invest $5-10m and 1-2 yrs developing a new country markets. Because successs in new markets bunps the licence fee model way up to partnership level (read = operatorship)
But you are right. The right partnership (as opposed to licence) could accelerate the value potential if the partner already has the establised market and channels.
I'm sure SC is playing with this conundrum already.
My gut feel would be to go into a lessor known 'free' countries/regions where there is likely to be less competition, and great or unique demand, density wise, from multi seaters. Japan, Southern Malaysia, Brazil, Canadian/artic arboreal forests/ice flows/glaciers, Saharan sand dunes, (yes, I know they're not dense users but they have a insatiable need for regular data) ....Dang, the list is endless.
Hell, I'm a mining guy; but even GreenPeace would be more effective if it contracted this mob for $10+m/yr!
(gotta love the hedge!)
Heck, they're a $B org whose business model depends on visuals...make that $150m pa.
Either way, NEA has to move hard and fast. Geospatial photography is more than 100 yrs old and like all digital business has to evolve and improvely itself rapidly and continuously.
SC, and us Shareholders (come on SC, join us) know that competition is a tough, breathing, ever closing beast. Intent only on destroying or taking the value a 'not-fast-enough' coy has created.
So if a partnership adds real $ value and protects the IP advantage...well I'm for it.
But guys; SC will do his own thing, his own way. The product we know is good. But he's not here to win a popularity contest with shareholders; he's here bust tough markets with a great product. He's spending pretty big to bring big hitters on board, and they know that they're not there to bring in the $100k-$1m contracts. They can only be on board to bring in the $5-10+m leaps.
I dont believe his character or management style could/should accept anything less.
Cheers to all NEA.
NEA Price at posting:
24.5¢ Sentiment: LT Buy Disclosure: Held
