$VNUE VNUE CEO ZACH BAIR PROVIDES YEAR-END UPDATE
Press Release | 12/24/2020
CEOs Year End Update
***Note that this is a rough transcript of CEO Zach Bair's video update, which will be posted to the Company Youtube Channel.
Dear Shareholders,
I hope you are staying safe in these trying times. And indeed, 2020 has been a year like no other (at least in my memory). Despite the challenges, VNUE is still here and making progress, albeit a little slower than we would have liked.
I know that many of you have reached out hungry for news, but I will remind you that VNUE is a technology company at heart, and cycles of development can be lengthy. Please be reminded that I cannot answer individual emails in regard to information that is not shared publicly, with everyone. I will also remind you that I am a CEO that doesnt put out news unless we have it in other words, real news, not fluff.
The good news, if any in this crazy year - the silver lining if you will, is that the downturn in the live music touring industry has provided opportunities to advance Soundstr. This is due to a few reasons, but mainly (a) venues and other businesses are and will be looking for cost savings they can take advantage of, and (b) because we have had more time to focus on Soundstr development with zero touring going on.
As the country, especially the entertainment, restaurant and bar industry, gradually emerges from this catastrophe, Soundstr will be needed more than ever.
Soundstr development and beta testing has been going well, and as you have no doubt seen in the press, we will be installing Soundstr on a commercial basis at RockHouse Live Clearwater in February, and all other RockHouse Live International locations going forward.
We are also working on onboarding quite a few other early adopter physical locations, and in fact are in the process of identifying and bringing on more radio stations, in addition to those who have already been testing. We had some important breakthroughs, including with data partners, as well as identifying untapped potential in regard to radio and other services when music is NOT being played, for example, advertising, production music, and talk.
As I mentioned, touring ground to a halt but the good news is we already had close to $100,000 in presales through our partnership with Ticketmaster for the matchbox twenty tour that was supposed to kick off this past July, but which now will commence in July 2021. Unfortunately due to accounting rules, the revenue cannot be booked until next year when the tour is executed, but Im sharing this with you because it is pretty exciting that we generated that much before the bottom dropped out due to Covid, and is a testament to the continued strength of the instant live CD and download model. We do expect this model to rebound with a vengeance next year, because of all the artists who will be looking to make up for revenue they lost THIS year.
We have not yet received our funding, but as Ive said, we are working on a $3-5mm round so that we may accelerate development and fully commercialize Soundstr. I wish I could tell you more in this regard, but we have indeed made a lot of progress, and been having some very encouraging conversations which will resume immediately after the holiday.
We continue to have friendly angel investors assisting us until we close that round, and have no fear we have taken on no more convertible debt and have no plans to do so. Nor do we have any plans for a reverse split or other capitalization changes.
I will also add that if any of you who are believers in the company, who are accredited investors, and who are buying up shares on the market, there could be some real opportunity for you by participating in the private round, either the main round or interim funding, so I would encourage you to send a message to contact@vnue.com if you are interested in learning more.
And yes, to a few questions I have received, we have set some budget aside for a share buy-back once our $3-5mm round comes in.
So how far have we really come?
Four years ago five in May when I came into this company, there was little or no workable technology, zero revenue, and the company was FAR behind in its SEC filings. In fact, we had to re-do a full two years of audits!
Since that time, VNUE as a company has accomplished nothing short of miracles on what ANYONE would call razor-thin funding. In fact, I would challenge any company to have accomplished what we have done with as few resources as we have had. Weve done this, mostly, because of sheer tenacity and dedication to accomplishing what we set out to do.
Anyone who knows me will tell you that I am like a dog on a bone and one of the most driven individuals you will ever meet. VNUE is not the exception by any means. When I joined the company, I knew it was not going to be easy. But what fun would that be, without a challenge?
So for those who are wondering about our accomplishments, or those who are new to the company, I thought I would go through some of the things we have managed to get done, from the time I joined, until now.
First, I immediately cut costs and eliminated dead-weight employees.
I then identified lacking technologies the company had been developing; took the company in a new direction, focusing on revenue generation, and sustainable, scalable, and interwoven architecture.
I Brought with me my longtime friend and business colleague from my company DiscLive Network, Tony Cardenas (Montana), as well as my main investor who has worked with me on multiple projects over the last 20 years.
We identified and eliminated toxic debt, and immediately negotiated and ended a few litigation cases against the company that I had inherited.
I brought in Jeff Zakim, who I had worked with at Capitol Records / EMI. Jeff was head of digital at Blue Note/EMI, and worked with some fantastic artists like Norah Jones.
Structured an exclusive license agreement with DiscLive, leveraging it and its assets to start generating revenues for VNUE in Mid/Late 2017 through instant recordings with Scott Stapp, lead singer of Creed.
We acquired the assets of set.fm, increasing our visibility and credibility in the business. Set.fm previously had approximately $3M in investment, and the company acquired if for about 10% of that.
Immediately leveraged set.fm to record and produce instant live content with platinum-selling artist Rob Thomas of Matchbox Twenty in early 2018, achieving a 30% sales conversion rate at the shows. This is a relationship I had been developing for several years before I became CEO of VNUE.
Brought on all-star key team members through longstanding relationships, including Lou Mann, former GM and EVP of Capitol Records, and Jock Weaver, former president of Hard Rock Cafe International. Also brought in Jim King, former CTO of BMI.
Articulated, evangelized and identified the intersection of set.fm and content generation with artist rights management, specifically identifying music in played venues and ensuring the right artists are paid.
Negotiated and acquired the assets of Soundstr to realize this intersection, and to create our blue ocean strategy. Soundstr previously has over $1.1M invested, and the company acquired it for about 10% of that.
Brought on radio veteran John Madison as a consultant, to further validate the need for Soundstr in the radio industry.
Investment so far, including prior investment by acquired companies, has been used to do all the hard work R&D, roundup, acquisition of tech, cleanup of public entity, talent acquisition. This was inherently the riskier investment. 95% of work is done at this point in regard to Soundstr the rest now is commercialization and execution.
The company has pending patents and will be working to secure additional IP protection as we continue to execute.
Signed Rob Thomas for his entire summer tour in 2019, including Australia, and executed this tour.
Signed Matchbox Twenty for 2020 tour, now 2021, partnered with Live Nations Ticketmaster, and generated $100K revenue pre-sales in just 3 weeks when tickets went on sale.
Signed multiple other artists and executed tours with Set.fm and DiscLive, including Patty Smyth and Scandal, Kings X, Paul Rodgers of Bad Company, Fishbone, Vans Warped Tour, the Music of Cream, and others.
Deployed multiple Soundstr units to the field for beta testing, resulting in success, in the time period we projected to do so.
Signed our first commercial agreement with RockHouse Live International in the time frame we expected for initial commercialization and rollout.
Have utilized my public platform as a CEO of VNUE as well as an artist to continue to evangelize Soundstr and what we are doing to change the industry, and I continue to do so every day.
From 2018 to 2019 (before the pandemic hit), increased revenues by 149%, and our losses decreased by 40%. If the pandemic had not hit, we estimated that we would have realized well over $1.5mm in 2020, if not more. As it stands, due to the pandemic, our revenues will be low for 2020, because the vast majority of revenue we projected was from touring.
The good news is that 2021 should be very strong for both touring and for Soundstr, assuming there are no further pandemic setbacks.
All in all, we are in a great position as we move into 2021. We have weathered the storm much better than a lot of businesses who operate in our space. This, mostly, is due to the gritty determination of my awesome team, who I am extremely grateful to have on this journey. I can say that Ive been fortunate enough to have some great teams in my past startups, and great market opportunities, but by far, this is the best team Ive had the pleasure to work with, and the biggest market opportunity yet. With the funding round we are raising, and all the prior hard work we have done to this point, we are literally poised to help change an industry that has been in the dark ages for decades. These folks truly a rock star team are here with me in VNUE because we all believe in this company and the technology, and what we are working to accomplish for the greater good.
In closing nothing is easy, especially when you are working to change something so monolithic as the music business. And for those who have been with me as a shareholder on this journey so far, we are not there yet, but we are getting much closer to our lynchpin moment.
And by the way, thats when the REAL work starts, but also the successes and where we build real value!
For those of you who have recently joined us, welcome to the world of VNUE. This is a very exciting time for us, and I am happy to have you on board.
And as I often quote one of my biggest heroes and role models, the late great Steve Jobs, Stay Hungry. Stay Foolish. Because if you want to change the world, you need to push. You need to try new things despite the naysayers. You have to sometimes make sometimes daring decisions, and fully believe you can facilitate change. Because if you put your mind to it and you stay focused and driven you absolutely can.
Thank you for being a part of this adventure! Lets change the world together.
Merry Christmas and Happy Holidays
Zach Bair, CEO & Chairman
