Some shareholders have asked, WHERE do we see the MyFlix brand falling within the scope of competitive options for the S.V.O.D. space? In order to best answer such a question, let's take a look at the principal Subscription-based entertainment streaming suppliers servicing North America:
NETFLIX is the 900-pound gorilla, with over $1-Billion in monthly subscription revenues. Amazon is a distant second place, with HULU in third, and HBO NOW targeting to close-in on $100-mm in monthly revenues by early 2019.
The comparable suppliers to MYFLIX are most likely viewed as ACORN.TVand FILMSTRUCK. Acorn has a mix of British TV programming, PBS and Urban features with an impressive 710,000 monthly subscriber base after less than 5-years of operations. FilmStruck launched just last October, and already has over 250,000 monthly subscribers generating about $2.8-million in monthly grosses. VRV is a label consolidator (not unlike MyFlix)and they represent a handful of specialty labels, primarily on a non-exclusive basis (MyFlix will have MANY of the same titles that VRV is offering). UFC and SCREAMBOX are specialty subscription channels (wrestling / horror).
Based on the MyFlix revenue-sharing model with our 30+ program supplier labels, the venture should be operating in a cash-flow-positive mode after only 15,000 Monthly Subscribers - which is a revenue level so far below these other principal SVOD sites that it boggles the mind to try to justify any forecasts which do not significantly exceed this threshold.
The variable costs impacting the MyFlix launch and growth is MARKETING and ADVERTISING. How does the company build brand-name visibility and awareness with consumers in a cost-effective manner? Obviously, the company is not looking to rely on word-of-mouth, but is also not planning to buy a multi-million-dollar Superbowl TV commercial. The company's MyFlix marketing plan is extensive, creative and is designed to deliver tens-of-millions of consumer impressions at a very cost-effective level. The launch campaign includes paid internet ads and banners onto high-traffic sites catering to film consumers... other major support activities include extensive "barter" web placement activities, social media outreach, taste-maker and influencer campaigns, traditional publicity support and viral-style videos designed to build the MyFlix brand.
After reaching the cash-flow-positive threshold, MyFlix will work to expand its subscriber and user base through ongoing marketing and advertising - as well as a robust program of NEW TITLES to be added at over 300 per month. In short order, HHSE believes the site has the elements and panache' to become an entertainment brand name and a hugely popular destination portal.
