Entertainment by User Generated Content Video Sharing & Social Networking
FACTSHEET
:::::::::::::::::::::::::::::::::BUSINESS:::::::::::::::::::::::::::::::: StarNet Media AG has specialised in the market of Social Commerce and digital media. The business offers solutions and platforms for the commercial use of user generated content. The user thus becomes, with the help of the internet, the co-creator of a brand or a community. No other medium has changed social behaviour in such as short time as the internet. At the end of the 90’s it was still feared that the internet would lead to the isolation of people, whereas the opposite has proved to be the case. The world has become connected, borders can be crossed, distances are unimportant. Via the internet you can gather information, can communicate and discuss. The internet is considered the central element in the new market of social commerce and as an ideal platform for the education and guidance of communities. Groups of people connected by joint interests or fate, exchange opinions, have virtual discussions and by means of this active exchange, perhaps even promote understanding between different cultures. The continuously increasing rate at which user generated content is appearing on the internet is due to the success of web 2.0 technology. Through the new user-experience of using an application, rather than a normal website, the trend has spread far and wide and turned into a mass phenomenon. Millions of internet users spend a large portion of their free-time in numerous blogs (electronic diaries), forums (electronic discussion forums) and video sharing portals (video clip exchanges). StarNet Media has created a platform, which combines the favourite web 2.0 applications, the swopping and viewing of video clips, with geo-specific representation via an integrated application «Google Map». From this a virtual social networking platform has developed, which can be used for various business models in the area of social commerce. In StarNet Media authorities from the marketing- and web 2.0 world have come together. A top-team, which actively sets up marketing, ranging from one to one marketing to social commerce. The individual thereby gains more authority; the need for individualisation is supported and promoted. Since the start of the still young firm’s history an extremely modern and innovative business basis was created founded on this knowledge. A basis, which consists of HR competency in interdisciplinary areas, be they with your own workers or in the network group with outstanding performance. Recently this specialist team has created a pioneering software platform for the setting up and administration of social communities and by means of innovatory marketing ideas and technological advantage has secured a considerable competitive advantage.
::::::::::::::::::::::::::GO TO
MARKET:::::::::::::::::::::::::::
From the numerous usage possibilities of this pioneering platform three possible business fields crystalised. In order to minimise risk and to optimise value for share-holders StarNet Media follows a go to market strategy based on three principles. public
theme oriented
plebsTV
syndicates
product oriented
Business Edition
HR :: Technology :: Marketing :: The brand plebsTV :: rights of use/library
Column 1 portrays the news and content sharing platform under the brand plebsTV, which fills an obvious need of the wider public for information and opinion exchange with what it offers. plebsTV is the first internet portal in the world to combine content sharing and social networking with geo-referenced data. From this a unique infotainment experience has arisen: Events and impressions are documented by people for people and are easily located by means of the connection to «Google Maps». In column 2 StarNet Media makes the platform available for topic orientated syndicates. In column 3 the platform is offered to large businesses by means of the business edition. Whilst plebsTV is available to the general public, the contents of the other 2 columns can be steered by the platform owner. For example it can be used for market research and opinion polls or education as well as for community care.
:::::::::::::::::::MAIN
PRODUCT plebsTV:::::::::::::::::::
As plebsTV is the main product with its own face and registered brand, we will concentrate on this platform for more detailed description and further remarks. The uses and values for the business models of both of the two other columns can easily be derived from it. With the brand of plebsTV we are present not only in the news market but also in the area of virtual social networking with video sharing portals. Currently a fragmentation of the news market can be observed, news is becoming ever more varied. Traditional channels such as TV and newspapers cannot compete with this development, which is why a misalignment to IPTV can be observed. IPTV makes a multiplicity of programs possible, which can be produced with less cost and more quickly. News is becoming more current. With the concept of «citizen journalism» plebsTV supports its own membership needs of the individual and follows the tendency for news to increasingly be taken away from the control of media giants, and to be led by individualized platforms. The fastest journalists nowadays are no longer reporters, but passers by, who just happen to be passing the «scene». Almost everyone today carries some form of picture recording equipment, whether in the form of a mobile phone, a camera or even a digital camera. Thanks to this development almost every second of every event is recorded. Happenings and unique events, which document a current event; are always in the eye of the viewer.
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:::::plebsTV CORRESPONDENCE
Social Media Scale :: Major online Communities seem to converge on the Social Media Scale :: Yahoo
MySpace
Media oriented Portals YouTube
:: plebsTV ::
Linkedin Social oriented Networks Facebook
In plebsTV all picture contributions (moving, still or animated), which refer to news, opinions or entertainment are arranged by time, theme and geography «place of the event ». The spread of plebsTV should follow the successful example of Wikipedia. Wikipedia began in a very small way placing an emphasis on quality and today is one of the giants in the community and still represents quality in the internet. plebsTV follows a dual strategy and publishes both eye-witness reports as well as experience reports. Apart from short-lived information with news content (news, catastrophes) plebsTV is a platform for long-life content such as life histories and views of everyday life and other cultures. Members can travel to different regions in the virtual world, travel to cities and continents and gain an insight into life, culture and customs. Typical scenes from life give a cultural and historical feel to information. Thus cultures can be brought closer together and get to be known better through high interest content. Life is documented like a doku soap on the TV; by people for people. A contribution section, which is exactly suited for a portal such as plebsTV. Doku soaps equally serve for the dissemination of information and entertainment and are therefore typical representatives of the infotainment genre. By which it isn’t trying to bring unusual facts closer to the viewer, but rather to bring perhaps unknown, but everyday events to his attention, in the manner of a report.
„A platform such as plebsTV could enrich traditional reporting with
the local personal view and at the same time include the general public more. Spiegel Online, November 14, 2007
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NETWORK :::::
The plebsTV team shows through projects and its own content, the direction in which the portal should develop content-wise and qualitatively. For this an international and partly theme-specific correspondent network is being set up. The correspondents are acquired direct or via their own portal. Commissioned by plebsTV these private reporters document life (experience reports) and special events in their region (eyewitness reports): The reporters are at the centre of their own world. These reports inspire and motivate other users to set up their own content (user generated content) and to publish via plebsTV, so that a community grows up, in which impressions, experiences or fate are portrayed and exchanged. It is conceivable and should be borne in mind that in the near future there may be remuneration and a hierarchy concept for particularly active and good correspondents. Eye-witness reports (top stories) in particular, are singled out by plebsTV, editorially reworked and if necessary translated into other languages. A further defined aim of plebsTV is the setting up of its own weekly news show with the top stories of regional eye-witness reports. The programmes will be hosted by active users of the community; from the community, for the community. :::::::::::::::::::::::::::::COMMUNITY::::::::::::::::::::::::::::: Legal form: Headquarters: Share capital:
corporation Thalwil / ZH / Switzerland CHF 500‘000 up to 100 % paid-up, divided into 5 million shares with limited transferability
:::::::::::::::::::::::::YIELD MECHANICS::::::::::::::::::::::: The yield mechanics of StarNet Media AG are based on the 3 column principles, respectively from the resulting advertising and license income as well as the cost-based value services. With the main product of plebsTV yields are generated in particular by the sale of advertising space and additional value services for the users. In the areas of the syndicate and business editions, income results from license fees and rights of use. In line with current planned figures it is to be inferred that in five years (2012) net proceeds of at least 90 million Euro will be realised. The value of participation in StarNet Media AG is expected to increase through the planned turnover and yield growth. ::::::::::::::::::::::::MEMBER
PROFIT:::::::::::::::::::::::::::
Basically we can assume with portals like that of plebsTV, that the critical mass in Europe is about 20‘000 to 30‘000 members. Beyond that an above average gravitational force is released. As a rather young portal plebsTV is surely only just beginning, StarNet Media has however, already initialized a raft of measures besides active public relations work, to increase membership numbers. Besides the electronic direct speech to «regular holders» of other platforms, other measures such as search engine marketing or banner advertising campaigns have been instigated. Furthermore members are recruited via posting. Posting is a report within a newsgroup or a forum. Similar to the traditional «Blackboard» an electronic report is written which is available to numerous users at the same time.
Population numbers sorted by age category and geographical region Age
Western Europe USA
Total
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59
22‘956‘215 23‘519‘637 25‘043‘751 26‘449‘583 29‘940‘727 31‘801‘916 29‘869‘739 26‘711‘408 25‘106‘273
21‘728‘978 21‘156‘421 21‘161‘376 19‘531‘264 20‘909‘399 21‘428‘750 22‘858‘209 21‘463‘268 18‘580‘896
44‘685‘193 44‘706‘058 46‘205‘127 45‘980‘847 50‘850‘126 53‘230‘666 52‘727‘948 48‘174‘676 43‘687‘169
188‘848‘561
430‘247‘810
Total
241‘399‘249
The market capacity with respect to the market potential is a multiple of the number of video sharing members, as each person in the list can be a member of more than one video sharing community at the same time.
A central measure is the production of its own viral videos, which refer to plebsTV and are spread in the manner of viral marketing across all large platforms. A further measure is affiliate marketing. Via various measures a stream of internet users will be directed to the portal of plebsTV.com thus generating interest and attention. One of the most important measures however, is surely to be found in the concept of the correspondent network: plebsTV makes community members reporters and reporters are the stars. Most new members are gained because of interesting, exciting content. Other platforms such as Facebook, YouTube or MySpace have already done this successfully.
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::::::::::::::::::::::::::::MARKET VIEW:::::::::::::::::::::::::: plebsTV combines market services from two markets: online news and video sharing and social networking. In the USA about 50 million people or a sixth of the population consume internet online news. If we use these figures to calculate the demand in Europe, we arrive at around 65 million consumers. That this number is realistic is shown by the figures from Germany: In the first quarter of 2007 the use of internet news portals in Germany (representing West-Europe) reached a new high. The 20 most successful German portals were visited 896 million times in this period. Source BITKOM, April 2007
In the area of video sharing and social networking the USA and English speaking countries are still the most developed markets and are dominated by YouTube (www.youtube.com), MySpace (www.myspace.com) and Facebook (www.facebook. com). Facebook in particular is gaining an ever greater fan base. The USA has shown an unparalleled increase in the last few years. Founded in 2003, MySpace is the pionier in this market. In the first quarter of 2007 MySpace registered 160 million members, who swopped videos and used the platform as a meeting point (social networking). With regard to data traffic, MySpace has in the meantime been overtaken by the YouTube portal founded in 2005. YouTube and MySpace have since entered the European market –Facebook plans to expand in the second quarter of 2008 – nevertheless there is still enormous potential for local portals, as these are more aware of the language and cultural aspects. The following graphic shows the immense growth in social networking sites.
Worldwide Growth of Selected Social Networking Sites Age:15+ Social Networking Site
Total Unique Visitors (000) Jun 06 Jun 07 % Change
MySpace Facebook Hi5 Friendster Orkut Bebo Tagged
66,401 14,083 18,098 14,917 13,588 6,694 1,506
114,147 52,167 28,174 24,675 24,120 18,200 13,167
172 % 270 % 56 % 65 % 78 % 172 % 774 %
Sources: Facebook, ComScore Media Metrix, faberNovel analyses, October 2007
Facebook, currently the second largest networking platform, had in September 2007 over 42 million active members. This is a doubling of the registrations since Facebook also opened to the public. Facebook is a social networking platform in the English language area and was developed by Mark Zuckerberg at Harvard University in February 2004. Originally the site was only aimed at students at Harvard University, later it was released for students in the whole of the USA. In September 2006 it finally became generally available. The last statistics show 63 million active users, of which half do not belong to a US College or University. The site receives more than 65 billion visits per month. The 25- to 34- year age group is the fastest growing public sector; between May 2006 and May 2007 an increase of 181 % was measured.
Charakteristic Facebook User :: More than half of the active members return daily :: On average the members spend 20 minutes on the site daily :: Facebook counts more than 6 million user groups :: And over 55000 regional, work oriented & educational networking groups
The European market, with an estimated current market penetration of 7 to 10%, is at the beginning of a growth phase. Until now no European portal has been ranked in the top ten. We can assume that MyVideo (www.myvideo.de) with up to 7 million hits per day is the largest portal in the German speaking region. If we compare this number with up to 100 million hits that YouTube gets, the immense potential of Europe in particular becomes obvious. In principle every person between 12 and 59 years of age, who lives in a western industrialised nation belongs to the target group and can be counted as a potential member, as statistically all these people have internet access; either at home, at school, at work, through a friend or in public zones. And as social networking users may be members of several portals at the same time, this appears to be one of the largest virtual markets. In the first quarter of 2007 Europe and the English language region had, it is estimated, between 200 and 300 million members; with a growing tendency.
::::PLANNED Financial year
FIGURES FOR STARNET MEDIA::: 2008
2010
2012
Turnover in EUR 220‘060 15‘778‘464 EBIT in EUR -3‘986‘028 3‘313‘477 EBIT % of turnover 21 %
90‘447‘726 32‘561‘181 36 %
On the basis of the planned figures of the company there is a company value on the basis of DCF/yield returns of approximately 72 million Euro. The risk interest is valued at 30 %. The break even point is expected to be reached in 2010.
The European market is in our opinion at the end of the introductory phase and at the start of the large growth phase. If we assume a maximum market penetration for 2007 of 10 %, and define the target group as 12- to 34-year olds and assume similar explosive growth to that in the USA, then the potential could rise as high as 100 million members by 2010.
::::::::::::::::::::::::::::::::::MORE THAN
NEWS – 8 GOOD REASONS FOR AN INVESTMENT:::::::::::::::::::::::::::
:: Top management with experience of marketing and web 2.0 :: Unique software platform with technological advantage :: Minimising the risk and optimising the value by using the 3 column principle :: Registered brand of plebsTV in a strongly growing market :: Own, established portal (www.plebstv.com) with successful membership gains in the shortest time :: Stock exchange entry by plebsTV planned :: Attractive assessment of business value using conservative valuation factors :: No additional watering down of share capital
„At least on the local basis new business models develop. «The big metropolitan papers cannot compete with the hyper-local journalism, demanded by
the readers », maintains Rosen. «They want to experience what is happening right in their neighbourhood, in their parks, in the schools their children go to, and on the way to them.» Cooperation with start-ups such as plebsTV, where recently thanks to Google map material news from citizen journalists can be published with accurate map references, therefore seems inevitable.
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Article abstract Focus online, November 1, 2007
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::StarNet Media AG Tischenloostrasse 59 CH-8800 Thalwil www.starnetmedia.ch www.plebstv.com
::Investor Relations Tischenloostrasse 59 CH-8800 Thalwil Marcus Riva Phone: +41 44 722 60 60 Email: mr@starnetmedia.ch
This Factsheet has been developped by Yima Group GmbH in collaboration with the management of StarNet Media AG to the best of one’s knowledge and based on the current level of information. It represents for the investors an information about the company and its positioning; it does not fulfil the function of a sales brochure.