Hey guys, just catching up.
Let's face it, $107k this weekend was a dismal opening by anyone's standards for Twelve. Doesn't matter how you slice it or dice it; that stunk. I'm as long as anyone on TDGI but I'll call a spade a spade at the same time. But, that is why we are not a one trick pony. I have always believed that HTYMP would be the real sleeper but a couple things we all learned this weekend with theatrical releases (and that goes for HTYMP IMO):
1. If you don't advertise or promote, nobody knows the movie and hence nobody goes and see's it. We know 12 cause we talk about it ... apparently the rest of the US doesn't.
2. With a limited release, don't feel pressure from anyone (including shareholders) to open in more theatres than you can easily focus on to build the hype (maybe 10 in NY/LA would have been a better way to start - albeit every shareholder on this board would have screamed blue murder ... so live and learn with this one).
Now, saying all this, like any business, do you give up or tweak your strategy? Eric will now tweak to get out of the markets that are too expensive to promote and laser focus on the high density, target audiences. Twelve is just starting so we need to watch the ebb and flow of how it moves forward - a nice test of HH/EP at dealing with a little adversity.
What this demonstrates so vividly and hopefully now the board sees it HOW CRITICAL the move to team up with 20TH CENTURY FOX was (some still don't get this yet). If you didn't believe it before, you sure do now. These guys are marketing machines with the resources/networks/smarts to expand HH reach by over 10 fold in my estimation. This is key to our future and more details will help us understand this better.
As stated last week, the nice thing about the PPS at this level is that it really has no growth what so ever built into it including Twelve, HTYMP, Fox opportunity ... maybe just the originally HH library. So since 12 was valued at about zero revenue, that is a good thing from a PPS perspective.
So, if your a momo/short term/day trader - this will suck huge for you as the price could get hit hard first thing Monday IMO. After a few days, a little news, people settle down and the audits begin to unfold, the PPS will work its way back to and likely above current levels IMO. If your long, you sit back relax and let the business plan unfold.
Again, the 20th Century Fox deal is the biggest thing that has happened to TDGI since HH became the company and now you see why that is. The largest concern for me know is not how the $4.0MM cost for Twelve will hurt shareholders, it is how it will hurt the off balance sheet financing and attracting similar financing in the future - but, now with FOX in the picture, that really eases this concern with the DVD/VOD potential.
Actually looking forward to this week and how HH regroups on Twelve and some of the additional news starts to flow.
2011 TDGI Charter Member
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