In January 2012, we introduced our Gander.tv service. This service provides online streaming video and audio images from performance spaces, bars and clubs to consumers via a website called “Gander.tv.” We have developed a proprietary software program that runs on computer platforms at customers’ facilities that streams video images and sound from multiple cameras and microphones or soundboards and makes them available to consumers on the Gander.tv website. The Company has entered into a hosting agreement with Amazon Web Services for the consolidation of these video and audio images and their presentation to consumers via the Gander.tv website. We rely on third parties for the implementation services and for onsite maintenance.
The Company is focused on acquiring unique and interesting content and is currently working with New York City area venues. During the 3rd quarter 2013, the company identified six existing venues where the content was not of great value and has de-installed the equipment. While some of these may remain on the web site with existing content, the company expects that they will be eliminated over time. During the 3rd quarter, the company installed 5 new venues, with a net installed base of 36. The Company has signed agreements for additional sites that we will install in the 4th quarter. We will continue to qualify venues that fit the criteria of unique and valuable content and estimate that we will average 2-3 per month. At the end of September 2013, the Company was broadcasting over 200 performances each week, which was up from 75 performances at the beginning of the 3rd quarter. All broadcast events are also recorded for repurposing later.
We have developed website applications for Gander.tv that enable our customers to schedule live broadcasts, or to post previously recorded segments which would be shown during slow or down times. In addition, we have a pay-per-view application that enables customers to schedule and broadcast shows and performances for a fee determined by the Company, the venue and the performers for each show in the form of an online ticket paid by major credit card or PayPal®. The purchase of an on-line ticket entitles the purchaser to watch the live performance and have future unlimited access to the recording. The service is targeted to the performance of music, spoken word, plays and musicals, comedy, karaoke, and other performances determined by the venue. The Company collects these fees and remits an agreed portion to the venue. The customers are responsible for contracts with performers, including the terms for broadcasting and releases.
The Gander.tv website was released in beta mode in mid-March 2012. We launched to the general public by the end of March 2012. Each venue has a dedicated web page that allows for personalization including logos, description of venue, hours of operation, address and a map showing the location of the venue and a video player window. In addition, all future and previous broadcast events are listed in thumbnail form on the venue page. Except for pay-per-view or private event performances, access to the Gander.tv website is free to consumers. The Company provides for enhanced functions to consumers who sign up for free membership including personalized web pages with highlighted favorites.
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Our sources of revenue for Gander.tv services online streaming video and audio website include installation fees to cover basic installation services. The Company retains ownership of all hardware and software including the on-site controller, cameras and microphones. We also receive monthly recurring revenue for providing these services; including all video and audio image storage and access to consumers and depending upon the number of components installed. In addition, the Company receives a portion of the pay-per-view fees charged to the consumer as a revenue sharing arrangement with the venues. We are generating fees for providing social media marketing services including graphics, creating web pages and landing pages, and posting and other communications to consumers. The Company has recently launched relationships with a number of video and banner ad networks which are providing ads electronically. The Company expects to generate future revenue through video and banner ad placements on its web site.
In May 2013 the Company introduced several new applications including “Tip Jar”, where an icon is available for the consumer to tip the performers and “Donate Now”, where the consumer can donate to a performance dedicated to or hosted by a not-for-profit organization. In both cases, the Company retains a portion of the fees for credit card processing and hosting.
In July 2013 the Company expanded its services to include partnerships with third party web sites for the repurposing of its captured performance content. The Company expects that this will be a significant portion of its revenue in the future. In July, the Company entered into relationships with Riot Cast, Film Annex, One Screen and Daily Motion for their use of the content from the Company’s customers’ performances. The Company is curating content to short segments for the purpose of posting to these third parties. Once viewed, the consumer is directed to the Gander.tv web site to see additional clips from the performance or for the full length version. The Company is generating revenue through a share of the advertising proceeds with the partner as it posts video and banner ads associated with these clips.
In the future, the Company expects to generate additional revenue through promotional programs and venue placement fees, and with select consumer product company sponsorships.
We market directly with our own sales force, using leads that are generated internally and by marketing efforts and other third parties. We support the sales once closed with Program Managers who engage with the client and coordinate Company efforts including the coordination of the installation, design and customize venue pages, coordinate streaming live schedules, schedule and program broadcast events, develop and execute social media marketing programs for venue and performers, and provide maintenance of systems components. We rely on third parties for the equipment necessary including the controller, cameras and microphones to render our services and for on-site installation and maintenance services. We are increasing our sales efforts.
We are marketing our Gander.tv services primarily to business owners and managers in the entertainment and hospitality industries, which comprises restaurants, bars, nightclubs, and performance spaces. Our video streaming services are adaptable to other businesses and industry segments and, at some time in the future, we may seek to promote our services in these areas.
We commenced operations in August 2010 as a development-stage company; as of the first quarter of 2011, we no longer met the criteria for a development stage company.
The Company believes that it has taken advantage of new technologies at lower costs to provide a competitive proprietary platform for streaming live and recorded video to its web site. This lower cost is enabling the Company to provide a very competitive alternative to venues and performers to market themselves via the Internet. The Company has also developed robust and innovative applications to leverage the video streams for marketing purposes and for revenue. Other factors enhancing the interest in its services include the wide spread and growing use of social media by consumers to view events, learn about venues they would like to visit and performers that they are interested in, or as fans to experience performances by favorite groups while not being able to attend in person. The availability of faster bandwidth, the expanding market and capabilities of mobile devices are all creating greater demand for the company’s services, where approximately 45% of viewing is done on mobile devices.
We have signed Digital Rights Agreements with the three leading music licensing companies: ASCAP, BMI, and SESAC. This provides us the rights to broadcast any licensed work over the Internet, and covers more than 17 million works. We have also entered into agreements with a number of ad networks including Tremor Video, Adap.tv, a division of AOL, and SpotXchange for video ads and Google, Value Click Media, Federated Media and Lijit for display ads. We will continue to search for additional ad network relationships to obtain the highest paying video and banner ads.
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