We are bringing the tech. That is a big deal and completely...

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goldenx

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07/05/18

13:46

Post #: 32929966
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Originally posted by RobbieinAus ↑

Yea exactly. There comes a 'theoretical' upper limit of how much we can earn off of these contracts before the company paying the money looks to alternatives: i.e. buying us or a competitor out, developing in house, etc.

At some point they would say 'we are paying a TON of money for this service, I'm sure we can accomplish this cheaper'. So they limit the potential for that, by using a very small %, as even with a very small %, there is still a large upside.

To illustrate: does anyone here see Indosat actually signing a contract that leaves them with the potential of having to hand over more than a billion AUD a year? As much as I'd like that, I'm pretty certain that wouldn't happen, and the contract wouldn't leave an exposure like that. At a $1b/year, they'd seek other alternatives as that's a massive cost. So in order to account for an unknown % of subscribers adopting the mobile platform, yet with a total payout limit, we need to assume a very low revenue %. So a billion is too high, but what about 750m or 500m? Where is the line drawn?

Is it reasonable for us to see 20% uptake? Maybe even 30%? Yea possibly - especially over a 3 year contract. Is it reasonable for us to expect a half a billion dollars a year as a result? No. It's not. I think the line is much lower than this.

And at 10% rev/20% uptake, we'd be at $480m - or 10/30, we're at $720m a year. Frankly, those numbers are just WAY too high (as much as I'd wish them to be true). So since I believe 20-30% uptake IS actually achievable, I think we are therefore bound to a revenue share below 10%. In reality I think it's closer to 1-5% like I mentioned in my last post. (and my gut says actually closer to 1%)

Plus, let's be honest here - this is NOT a 50/50 arrangement. Indosat is bringing both content and 100m potential subscribers to the table. Those are two MASSIVE bargaining chips. What are we bringing? Rhetorical question - but food for thought.

Even if we receive 0.5%, this value is not to be underestimated. With 100m potential subscribers and a 3 year horizon there is still a tremendous potential in this contract.

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We are bringing the tech.
That is a big deal and completely undervalued.

There is no other OTT platform like ours on the market that can do what tv2u can do.
If there was a company like Indosat would be using it. Indosat are only going to press into this huge and growing space with a company that they believe 100% can handle their demands, think about that for a moment, Our platform performs better than any other on the market and we have been chosen to be the provider for over 100 million already paying subs into one of the quickest growing sectors of the market.

so, we bring the tech, the best tech available.

Many to follow imo as our performance and reputation begins to swell in the industry.

TV2 Price at posting: 1.4¢ Sentiment: None Disclosure: Held
35 Upvote

7 Great analysis

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