Yes. Here's an upddated version of those reasons.
As for the $6 billion, that's a bit unclear to me, as it takes into account consumer-burning, which may or may not include some future Titlematch licensing/involvement IMO. That's why I primarily focus on the 25,000-35,000 projected by William Blair. If TitleMatch gets a 20% market share, which given the small number of players, the technical barriers to entry, and their current position is very reasonable, than I think several dollars is not at all unlikely.
*The market is considered to be very large, many billions of dollars. See recent PR regarding industry research/projections by William Blair.
*CSS language finally was approved by the studios for on-demand DVDS. This was in the making for a long, long time. It's the same protection major studies use now against copywriting DVD's they make. This opens the door to the eventual on-demand production of any movie ever made by the major studios (assuming they still have the master).
*PCLI is (we think) the only company which has currently CSS incorporated into software for on-demand DVDS.
*Already two MAJOR studios appear to be on board (in Peapod PR).
*The 200 store major retailer trial (in Peapod PR). This isn't a one or two person trial as we've seen with some competitors. A large number implies 2 things: 1. High confidence from any preliminary discussions and/or testing with the retailer. 2. A much larger store base--and potential deployment. Though not announced, Walgreens (which has some 6000 stores) has been suggested sy some here as possibly the retailer since both TitleMatch and Walgreens have mentioned an upcoming trial, at the same general period of time, and without giving the name of who the partners are. Note too that Walgreens appears to be on-board with Qflix, based on prior PR's which mentioned, along with others--TitleMatch. Whoever it is, it is "national" and likely has thousands of stores.
*This will be a consumer-visible product. Such stocks tend to capture investors imaginations better than those consumers never interact with.
*Deals with respected industry names--Bollywood, CityLights, Monarch, etc...
*Studios like this because it requires no upfront production and potentially unsold inventory. See yesterday's PR for mention of the cost savings to studios. They also like it because of the "Long Tail" theory--ie they can sell older items as easily as newer items (no supply issues once mastered). On Amazon, used books outsell new ones. That's a lot of money. I suspect the same will occur with movies.
*Retailers like it because there is no inventory. They can carry thousands of items in virtual inventory, within a small kiosk. This evens the playing field with monsters like Walmart. They can pre-burn popular titles for sale. The accounting is taking care of by TitleMatch too.
*Consumers should like it because it will over time offer flexibility to purchase any movie they desire, within about 6 minutes (2 can burn at once). Also, for customization--you will be able to combine titles, etc... Also, it will include DVD-quality wrapping (a feature I understand is NOT offered currently by Polar Frog). Should appeal to avg consumers, impulse buyers, gift-givers, and collectors.
*Internet consumers should like it because they can order from home and pick up anytime in the day at their convenience at the local retailer.
*Lots of flexibility for future enhancements, ie downloading to digital devices of one's own, etc..So, opportunity for tie-ins with any set-top maker with burning capability, or storage capability such as a TIVO.
*Lots of promise for on-line fulfillment with all kinds of on-line retailers-from small independant producers of digital content to large retailer/resellers. I forsee literally hundreds if not thousands of online sites using TitleMatch fulfillment services. TitleMatch is already being used by Overstock.com--the 2nd largest retail site on the internet.
*The kiosks are very affordable to mass deployment, starting at about $5,000. Your neighborhood mom and pop store can compete with Walmart and Target! Payback on investment is just one year if they sell 3 DVD's a day, with the retailer keeping $5 of the sales price. The cost enables mass deployment. Just a year ago or so the costs were much more prohibitive, at about $20,000. Now, they are affordable to just about any enterprising business.
*Once deployed, costs to PCLI will be fairly minimal IMO. This means that once machines are installed margins should improve exponentially, with ongoing fees paid to PCLI per transaction, and license fees paid per kiosk.
*The stock currently has a very small dollar float, which I estimate to be at around $1-$2 million, 20 million shares currently. The stock moves quickly. Increased demand from positive events/PR may result in a very fast move up.
*Working with big players in the kiosk world (Primera), software world (Sonic and Macrovision), and the hardware electronics world (Pioneer).
*Their security engine and database features require sophisticated development, having invested lots of R&D over time. This should be a real advantage for first-mover status. Certain features are patent-protected.
The primary negative is the weak financials and the outstanding convertibles (less than $1 million). Hopefully these will NOT be a problem as financers get a handle on just what PCLI really has here.
Needless to say, there is a lot to like here. At only 6-7 cents.
It is a fantastic business model. 2008 is supposed to be the breakout year, and it is looking like it will be with the national trial slated for Q1. The technology is there, the price is there, the retailers are there (just about), and at least 2 of the major studios appear to now be there. And PCLI is right in the middle of all of it. We should begin seeing increasing press about these kiosks, and soon more BIG retailers should come knocking.
ted
AI
