3D Printing & Fenway Sports Group A Partnership with LFC & LBJ
Technology is constantly evolving and pushing the boundaries on what we as a society create, but also the manner in which it is created. Throughout history we have witnessed certain technological breakthroughs, that have changed the dynamic of entire industries. 3D Printing will be the next game changer, disrupting almost every industry. It is only a matter of time before it starts to revolutionize whole production processes and redefine distribution. The possibilities and capabilities of 3D Printing are truly mind blowing. And it will happen much quicker than all advances before it.
3D Printing has the potential to revolutionize the way we make almost everything. The next industrial revolution in manufacturing will happen.
25 years
cellphones/pc 12 years
internet 7 years
Light Bulb
Timeframes for Mass Adoption of Technological Advances
Automobile
3D Printing The Internet of everything
50 years
television
Steam Engine
- US President, Barack Obama (State of the Union Address, November 2013)
T3D, with its background in Medical Imaging and Medical 3D printing is at the cutting edge of these developments. Today, we offer the Fenway Group the opportunity to come with us on this journey of transformational technology. telephone
Power Revolution
The 5th Industrial Revolution
Print Press
Technological Revolution
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THE NEXT REVOLUTION.
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The question is not whether every home will have a 3D printer but which room it will be in.
3D Printing Industry Split (By value US$; October 2014) Wohlers Associates
Other 33%
3D Printing Industry Size
10.8
Aerospace 12%
10
Billions (USD)
6.0
6
4.0
4
0
2009
1.3
2010
1.7
2011
Medical 15%
7.9
8
1.1
Automotive 20%
(By value US$; October 2014)
12
2
Consumer Products 20%
3.07 2.2
2012
2013
2015 Forecast
2017 Forecast
2019 Forecast
2020 Forecast
T3D CAPABILITIES Our Medical Origins Understanding the real capabilities and expertise of T3D requires an understanding of our origins in medial imaging and medical 3D printing - a genesis through our lineage of Capitol Health Limited and 3D Medical Limited. Capitol Health Limited (ASX:CAJ) is an Australian public company providing medial diagnostic imaging services. Established some 14 years ago and cofounded by 333D Pty Ltd (T3D) Chairman, John Conidi, Capital Health Ltd has grown to become one of the leading diagnostic imaging service providers in Australia with over 70 clinics and revenues approaching $100m per annum. Capitol Health Limited has a market cap of approximately AU$450 million. It was through research undertaken by Capitol Health into the application of 3D printing technology to the diagnostic imaging sector that the significant potential in applying the technology to the medical and healthcare sector was identified. Along with the potential application of 3D printing to fulfill the macro medical and healthcare trend towards personalized medical solutions, it became clear that 3D printing offered the opportunity for healthcare providers and enterprises to gain systemic efficiencies, improved work flow and improved patient outcomes.
The creation of T3D 3D Medical Limited (ASX:3DM) was born with the clear ambition of providing specialist 3D printing services to the medical and healthcare sector. What was thought impossible mere years ago is now a reality - from the printing of 3D body parts for observation or pre-operation practice, to the printing of operational, bespoke patient limbs or implants. The medical industry represents the cutting edge of what is possible with 3D printing, and it is our proud birthplace.
Leveraging off the research undertaken, consequent deeper understanding of 3D printing and ancillary technology, 333D Pty Ltd (T3D), a multi-faceted integrated 3D technology company was founded. T3D Limited is Australia’s leading integrated multi-platform 3D printing company. Our upstream and downstream lines of business include the following: •
Designing and manufacturing a range of 3D printers, including the worlds largest fused filament fabrication (FFF) printer;
•
Development of a 3D printing service bureau;
•
Creation of an online marketplace of digital files which are 3D print ready either by the purchaser at home or by 3DG as a print & post service;
•
Research and development around scanning technology and the use of graphite and graphene in 3D printing; and
•
An education initiative and platform throughout secondary schools in Australia promoting the technology and its capabilities (in partnership with the Victorian Government).
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T3D has an ambitious plan to place a 3D printer in every primary school in Australia and we intend to develop an educational program around the technology to skill today’s children for Ability to scan & the jobs of tomorrow. Consumer & industry printing bureau with the ability to print in all materials
Working alongside Schools nationally. We aim to train & provide hardware across Australia
digitize all forms & structures. End product are STL files ready to print
Graphene
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Online Platform
Education
3D Scanning & imaging
Printer Bureau
Repository of 3D files (STL) which can be downloaded or streamed securely (home or delivery service)
Strong focus on research & development. Formed a JV with Kibaran Resources
T3D is a highly ambitious, integrated and multi-platform 3D printing company. Our lines of business are both upstream and downstream around 3D printing technology, making T3D truly unique
WHAT IS 3D printing? How Does 3D Printing Work? 3D Printing is the process of making a physical object from a three dimensional digital file (known as an STL). This usually takes the form of laying down many successive thin layers of material. This new technology provides us with the opportunity to do for manufacturing what computers and the internet have already done for the creation, processing and storage of information.
•
1 1 2 3 3
Make the file > Construct a Computer Aided Design (CAD) > Or, use a 3D Scanner
A
Download or buy the file > From an platform online > File in STL format
The 3D printing process, has three main steps, but depending on the course of action may involve some additional items. Please see these illustrated opposite. Print > At a 3D printing company > Pick up or deliver
• •
•
B
'slice' the file > Put STL file through to slicer to achieve layers > Use
3D Printing broken into hobbyists and amateur artists/ designers 3D Printing bureaus springing up across major cities Community based and file sharing digital platforms growing in momentum Awareness of the technology more prevalent across society with media publications such as the Economist regularly reporting on 3D Printing
2015 PRESENT DAY
A
B
US $4bn - Estimated 3D market (Deloitte)
print at home > Own and operate your own machine
Officeworks selling a range of 3D Printers across their national network of stores
3D PRINTING TIMELINE. •
• Hewlett-Packard’s multi jet fusion technology openly available to the market. • Technology 10x faster than existing printers • Expected to be affordable
12 MONTHS
•
•
• •
• • •
• •
Greater retail/consumer penetration and take up Probably some disappointment at the limitations retail printers have Growing and expanding online marketplace
2018
24 MONTHS
US $6bn - Estimated 3D market (Deloitte)
Victorian Government, Australia - has promised 3D printers for all state schools by 2017
Previously noted trajectory continues Physical devices become embedded devices A convergence between different technologies including augmented reality (AR) virtual reality (VR) and 3D (both screen and printing) STL file purchase./ streaming widely adopted 3D printers of varying qualities will be found in almost all schools and homes across the developed world.
US $10.8bn - Estimated 3D market (Deloitte)
2017
2016
•
• • • •
Prosumer type printers more affordable & home printers Increased functionality Printer prices continue to fall Online marketplaces expand Increasing strategies around localising high value, high complexity, low volume production Greater shift towards design driven manufacturing Brands & companies using 3D printing to offer limited edition collectibles
36 MONTHS
•
• • •
•
he application and incorporation T of 3D printing into conventional manufacturing as a way to offer added personalisation Consolidation of online marketplaces Prices continue to fall & addressable market expands Printer feedstock materials expands allowing 3D printing to be even more broadly applied Printer technology continues to improve
2019 48 MONTHS
US $7.9bn - Estimated 3D market (Deloitte)
2020 60 MONTHS
WHAT IT MEANS FOR FSG? Power Law Distribution
Firstly: Creating the Long Tail of Merchandise
- 80% of a company’s profits coming from 20% of its customers - 80% of a company’s sales come from 20% of its products This is essentially the basis for hit driven economics - in an age where there just wasn’t enough room to carry everything for everyone: not enough shelf space for all the CD’s, DVD’s and video games produced, not enough radio waves to play all the music created, and nowhere near enough time in any day to squeeze available content through television slots - we need to choose those in highest demand. So, in accordance with the Pareto Principle, for companies in the retail business, focusing on the hits made sense. It was the lion’s share of the market after all. After the top 5-10% of products in any given category, demand drops dramatically and ultimately seems to get pretty close to zero. This is the way in which licenced product markets have been viewed for the last century. Every retailer (or licensee) has their own economic threshold - they all cut off what they can’t carry somewhere. Things that are likely to sell in the required numbers get carried; things that aren’t, don’t. We are obsessed with guessing what will sell, and what will not.
Occurrences or Values
The Pareto principle (also known as the 80–20 rule or the law of the vital few) states that, for many events, roughly 80% of the effects come from 20% of the causes. Pareto developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas. The 80–20 rule is roughly followed by a power law distribution for a particular set of parameters, and many natural phenomena have been shown empirically to exhibit such a distribution. It has since become a common rule of thumb in business, with many critical areas often displaying a similar distribution, namely:
(or Pareto Distribution)
The Hits Typically 80% of the value measured will come from only 20% of the categories or classes
The Tail Conversely, in traditional markets the bottom 80% of Categories or classes contribute only 20% value
Categories or Classes
retail sales in 2013 was dominated at the top end, by the leading brands, franchises and sports. In fact, just the Top 10 brands in 2013 in terms of global licensing retail sales, including Walt Disney (US$40.9 Billion), Mattel (US$8 Billion), Warner Bros (US$6 Billion) and Major League Baseball (US$5.5 Billion), accounted for 48.1% of total global retail sales. Extend that to just the top 20 brands - which then includes the likes of Dreamworks (US$3.3 Billion) and the NFL (US$3.25 Billion) - and these account for 83.1% retail sales. Traditional licensing exists largely in a world of scarcity - a world where limited shelf space dictates choosing just the hits. Even now with the advent on online retail shops to a global marketplace, and warehouses reducing storage costs, pre-production decisions are still required to determine what will sell and what wont.
manifesting itself at the purchaser end.
(By Licensor Brands; 2013)
The Tail 17%
Brands 11 to 20 19%
It does not reflect a free market such as in music, where the product itself is digital, only
And the industry of licensing has been much the same. The US$185 billion in licensed
Breakdown Global Retail Licensing Sales
Brands 6 to 10 16%
Top 5 Brands 48%
(...and LFC & LBJ) This is where 3D Printing changes the world of retail forever. In a more advanced
Secondly: Building the LFC & LBJ platform of the future
age of digital, with online retail and consumer driven distribution and creation, we will exist in a world of abundance - where there are zero distribution costs and no cost limitation - where everything changes. In a world of abundance, suddenly right of the curve becomes very important. In online retail - not constrained by the same space and geographic restraints more niche products can be offered and find a consumer, as the world is your marketplace. So while Barnes & Noble, a Fortune 500 Company and the largest bricks and mortar retail bookseller in the US, typically stocks around 100,000 titles, Amazon has a total inventory of more than 10 million titles - and more than 30% of its total sales is generated by titles not offered in the largest retail stores. In the licensing space, the physical production of products still requires decisions to be made about what will sell, and what won’t. And this is where the true opportunity of 3D printing lies – the ability for companies to produce a wide range of objects on demand – or allow customization by the consumer themselves - with no inventory costs – to be produced by the consumer as needed. Just as we have seen with books, music and film, we will now see with objects in general.
On April 28, 2003, Apple threw open the virtual doors to its iTunes store, and music - the music industry hasn’t been the same since. Suddenly, an industry terrified of online piracy had a legitimate place to earn money from the sale of digital music. Listeners no longer had to drive to their neighborhood record store to buy that new album by Norah Jones or 50 Cent. A song cost only 99 cents, a bargain next to an $18 CD. And iTunes powered iPods, with their signature white earbuds, became a must-have mobile accessory. Not everyone was thrilled. Record labels grumbled at being strong-armed over song prices by Apple CEO Steve Jobs. Some musicians complained that they didn’t earn enough royalties from digital-music sales. But by 2010, iTunes was the largest music retailer on the planet. Today, it has 435 million registered users in 119 countries and recently served up its 25 billionth song. iTunes also now sells much more than music: Customers can download movies, TV shows, games, books, podcasts and more. Here’s the way it used to work: You’d hear a song on the radio. You’d have to figure out what it was (a challenge in the days before Shazam). You’d drive to a mall. You’d search for the record. You’d buy the record -- if it was in stock. You’d put it in your CD player or on your turntable. Finally, you’d get to listen.
Total Book Titles Stocked 12,000,000.00
“We sold more books today that didn’t sell at all yesterday than we sold today of all the books that did sell yesterday.” - an unnamed Amazon employee.
(Comparison; 2012)
10,000,000.00
Now: Hear song, download song. Instant gratification. We believe 3D Printing will have an identical impact upon the licenced merchandise industry. Desire Licenced Item, choose licenced product online, personalise, print. Simple.
8,000,000.00 6,000,000.00 4,000,000.00 2,000,000.00 0.00 Barnes & Noble
Amazon
THE NEXT STEPS Prepare FSG, LFC & LBJ for the next Revolution In order to simplify, we outline here (consistent with our diagram earlier in term of How 3D Printing works?) how we can work alongside and partner FSG to place you ahead of the curve in terms of 3D printing, and prepare you for the next industrial Revolution.
1 1 2 3 3
Make the file (& Underlying strategy) > T3D will work with FSG to develop a robust 3 - 5 year 3D printing strategy for LFC & LBJ , taking into account current licencing partnerships, and seeking to maximise revenues. > T3D will work with your team to identify the existing merchandise portfolio to be digitized, in addition to any additional items we can create, and the extent to which such items should be customizable to the end purchaser. > Using the latest in 3D imaging technology, and our team of designers, T3D will create a portfolio of 3D STL files for LFC & LBJ to create your digital merchandise catalog.
A
Download or buy the file > T3D will build a secure online marketplace which will ultimately house the FSG, LFC & LBJ Digital catalogue. > T3D will work closely with FSG to develop a robust pricing strategy that contemplates both simple file download for print at home, to printing by our distribution network and shipping to end user.
Print > Recognizing that in the short term penetration of 3D Printers into homes is low, T3D will establish a robust 3D printing distribution network, that feeds into the online site, allowing end users to have printed items shipped to them, or capable of delivery from a 3D Printing Bureau.
B 'slice' the file > T3D will work with FSG to ensure end users have the ability, utilising our online tools and process, that they are capable of manipulating the LFC & LBJ STL files consistent with agreed uses and in a way that adds ultimate value to value proposition.
A
B
print at home > Additionally, T3D will ensure at every stage best practice file security is employed to ensure that risk of cannibalization of value is minimized through multiple printing at home, or end user distribution of STL files.
OUR Proposed relationship A Next Generation Licencing Relationship Ultimately, T3D seeks, through FSG, to be a licensee of both LIverpool Football Club and Le Bron James. The Official 3D Printing Licensee of LFC and LBJ. However, this is a new generation of licensee. Unlike your traditional, existing bricks and mortar licensees who are defined by the product or category of product they wish to manufacture and distribute, we would be a licensee categorized through the mode of distribution. Through the creation and distribution of 3D STL digital files. However we recognise there is currently little to no market for the sale and distribution of LFC & LBJ 3D STL files, and accordingly we seek to work with FSG to create this market. We seek to create this market jointly, consistently with the steps outlined earlier, through: • • • •
•
development of a long term FSG, LFC & LBJ 3D Strategy; creation of a digitized LFC & LBJ merchandise portfolio; creation of a short to medium term pricing strategy; creation of a secure LFC & LBJ white labeled online marketplace (accommodating features allowing end user to manipulate and customize STL files consistent with the FSG strategy); and creation of a holistic distribution network (to cater for short term low penetration of 3D printers in homes).
In recognition for the opportunity to explore this opportunity with the FSG, and become the Official 3D Printing Licensee Partner of the LFC and LBJ, the above wholly represents an investment by T3D in the future of the FSG, LFC and LBJ 3D merchandising opportunity.
Our ultimate remuneration will come through the ability to receive a commission or similar on sales of merchandise through the 3D platform, both from downloads of STL files, or in the short term sales of 3D printable merchandise through the 3D distribution network, printed on behalf of end users. This remuneration structure would not be unlike what is currently in place with traditional licensees, and we would sincerely appreciate the opportunity to speak further with you regarding how this may operate. We view this a long term partnership in which we are prepared to significantly invest in the creation of a new platform in the short to medium term, to provide the FSG and your partners with a long term commercial asset, and place you at the forefront of a technology that will ultimately transform the retail and licenced merchandise industry.
Frank Pertile Managing Director frank.pertile@3dg.com.au P. +61 403 439 466 www.333d.com.au 333D Pty Ltd 435 Williamstown Rd, Port Melbourne VIC , Australia