InCapta Inc (INCT)

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UK Biz Channel Gets Backing

http://www.redherring.com/Article.aspx?a=17710&hed=Game+Firm+Backs+UK+Biz+Channel

American game-and-movie-rental company invests in a London TV station.
July 25, 2006

GameZnFlix, an unprofitable American company that rents video games and movies, unveiled an ambitious plan on Tuesday to invest millions of dollars in London International Television to help create a London-based business channel.



GameZnFlix said it will invest $2 million to purchase a 25 percent interest in London International Television. The company said it may invest an “additional $10 million to $25 million” in the project over the next year.



It said some of that investment will be used toward the creation of The Business Channel, a digital satellite TV station spun off of LITV’s web site, TheBusinessChannel.com. At present, the site offers a handful of video profiles of companies—including GameZnFlix, but none of the interactive features commonly associated with the leading business web sites.



GameZnFlix President Donald Gallent said The Business Channel is still in its design stages, but more than likely will not be focused on stocks and investing. Rather, the content will be based on executive profiles and business news and know-how from around the world.


‘There currently is no U.K.-based business channel. How profitable they will be, however, remains to be seen as CNBC and Bloomberg both have fairly established and loyal audiences.’
-Daniel Schmitt,
Screen Digest






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Daunting Challenge

While the project may fill a void in the United Kingdom, the challenge of creating a successful business channel is daunting.



“There currently is no U.K.-based business channel,” Daniel Schmitt, a television analyst at Screen Digest, told RedHerring.com. “How profitable they will be, however, remains to be seen as CNBC and Bloomberg both have fairly established and loyal audiences.”



Mr. Schmitt noted both CNBC and Bloomberg are “very profitable,” thanks to a viewership made up of businesspeople who are “very high spenders.”



The LITV project is ambitious for GameZnFlix, which lost $1.59 million on revenue of $403,600 in the first quarter. Its stock, which trades under the ticker GZFX.OB on the Nasdaq Bulletin Board, was selling at less than half a penny in recent trading of 22 million shares compared with an average daily volume of 39 million.



The company, which has a market cap of $18.9 million, saw its stock peak at $0.18 per share in November. It is based in Frankfurt, Kentucky, but also has operations in California, Colorado, and Massachusetts.



Stories on the Shelf

“The major expense is developing the content for these kinds of networks, not the technology. They already have a vast library [of stories] on the shelves at LITV that are ready to be seen,” said Mr. Gallent, explaining the relatively modest size of the investment. “We have the opportunity to take that content and repurpose it to reach even more people.”



This is not GameZnFlix’s first venture into the television arena. GnF Entertainment Network offers two streaming channels, one for video games and music and another one for movies broadcasted out to 2 million satellite televisions in the United States, said Mr. Gallent.



The London-based television company has been providing marketing and promotional materials for GameZnFlix for the last four to five years, said LITV owner Martin Everard. “We’ve seen them grow from a small startup to the presence they have today.”



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