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Great post @prazzzz Thanks for taking taking the time.

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jcurve

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15/10/17

18:44

Post #: 27917028
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Originally posted by prazzzz ↑

This was just getting so ridiculous that I had to get my laptop out. You have posted so many times that you have even lost consistency - One one post you say that it will be 5c by christmas and on the other post you say it will cap raise for it's next contest at 12c which wont happen until next year. You then say Usher won't even stick around until end of this competition because (according to you) it has flopped. You then again say that they might probably get Justin Bieber for the next season (to join a flopped competition?).

You then say that the substantial holders are family of MSM but you don't know that the two founders actually hold most shares anyway and the remaining of Subs are 3 of the top institutional holders and you even have me in there somewhere down the bottom.

So let me try and respond to you "Professionally".

The company as it stands is less than 100m (around 77m) until the performance shares and other options come in. You said this will divide by 5 without any maths behind it but let me do some calculations for you --

Based of annual report, of the 13m loss in the year, the company spend about $2.5m on "operational" cost. The rest were project costs for the platform, marketing, investment, partnerships etc.

So let's take one of your own scenarios, the company has good PR, Brand established and not much downloads but the market knows the "product". And let’s say they want to do 2 “competitions” next year.

We do know now that the “operational” cost is about $2.5m a year and the “downloads” hasn’t increased so why the hell do they need to go from 15 people to 150people.

We know that the marketing costs about $5m

You think that with so much PR they might even sign a better celebrity

So even if company made “zero” revenue next year (no in-app purchase, no sponsorship, no advertising) it needs about $7.5m to $10m to run (including the competitions). So at the end of competition one they went out and raised $10m at tech invest again at 20% discount to current price it would still be at 21c and they will be FULLY FUNDED next year.

Now just according to you, let’s say they get a “reknowned” celebrity next time and somehow it went “viral” next year in competition 3 and now they have that “massive downloads” that you are after but zero revenue. Would this be a prime target for a takeover because of this? –

Lots of downloads (acquisition tick)

Lots of content (engagement tick)

Lots of usage (retention tick)

Finally in regards to comparing this to “Youtube”, as someone who is in strategy (tech and app) for many years, I would like to explain this in a most simple way possible to you because I don’t think you quite understand the applications are not “apps” but are “platforms”

Every app that is successful finds a “niche” space for itself in the marketplace. The “monetization” techniques are the same to be honest. Someone pointed out for an app to be successful you need acquisition (users), engagement and retention (usage) and then monetisation (commercialise). As long as the app has users and people are engaged and retained you can monetise. And you are right – YouTube is successful because it has the users (lots of them) , it’s retained (people go back) and engaged (spend time in it when there are in – through videos) so it can apply monetization. Twitter again same thing but not a lot of engagement (monetization becomes challenging there).

So now with that in mind, let’s talk “Megastar” – Youtube has billions of videos, when I want to watch anything I can. I watch and then watch something else and so on. I am engaged throughout. In Megastar the purpose is different, You are watching (not because) you want to spend time but you are following their “journey” – You are not doing this in Youtube. So when you watch someone you like on Megastar, the idea is you follow them throughout the journey hoping they get to stardom. Suddenly without needing to scan through “billions” of videos of “millions” of users, Megastar has given you a platform and said –

“hey look here is 1000 performers we like, tell us what you like – so now from “millions” of users, you are looking at 1000 then 100 then 10 and finally a winner and also from “billions” of videos being watched by “billions” of users we are now saying “here is the top 1000” then “top 100” then “top 10” and then finally a “winner”. Can you see what is happening here?
More people are watching less and less performers and even less and less videos – if you understand the concept of “virality” – it just is simple as this (100m people watching a video in 24 hours) – what is the chance of that happening in Megastar? A big chance – but what is blocking them? (Yes you are right, users)

So now let’s talk risks –

The biggest risk is, as you have pointed out, “users” but to me they are not “fans” but “performers”, and let me tell you this – Fans don’t want Ellen, Usher or even Bieber for that matter – that is “brand credibility”. What they want is “content”. At this stage, does Megastar have content? NO! So what are they trying to do? They are focussing on the most important aspect that can make this go viral (and no it’s not the fans). It’s the “content” – the “performers”. I don’t give a rats *** if the video has 6 comments at this stage as long as they are converting more and more youtube artists to post a video in their app because guess what, when they are creating “viral” content on “Megastar” for a specific purpose “competition” there will be a flood of users and you’d not know what hit you overnight (perhaps the servers crashed!)

This brings to my second risk, and this time is “fans”. The app as it stands is not top notch (less features than the beta app). Monetisation is very very limited etc and the fans when they arrive in masses would need to be engaged and retained in order to successfully run this brand. I for that matter think that there is more to the app than what is presented just yet and I am prepared to take this risk because I am in the industry and know very well how apps are released (If you ever used snapchat when it launched, used Instagram when it launched or even used twitch when it launched, you would understand).

So finally, when would I pull the stumps on this? I think it will be on 2 premises

When I see mediocre growth happening during the final rounds and after the grand final and no brand name is established in mainstream media (i.e. earned media is very little – if you understand marketing)

When I see a massive competition out there that is growing significantly than this – when we are hundred million users rich and there is a “Youtube” venture out there then I wouldn’t give a rats *** again because this particular idea has a massive “first mover” advantage.

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Great post @prazzzz
Thanks for taking taking the time.
MSM Price at posting: 26.5¢ Sentiment: Buy Disclosure: Held
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