The deal with 10 million-plus subscriber Poolworks Germany
is a perfect fit for an acquisitive and already diversified entertainment and
direct response marketing company like Momentous Entertainment Group, Inc.
(OTC: MMEG). Momentous has an operational footprint spanning unique content
production for documentary, film and reality TV, as well as live music events,
adult contemporary and faith-based music, and even covers film
finance/distribution, and direct response TV marketing. Laying the groundwork
for a vibrant synergy longer-term, the July 25 announcement of a binding
agreement with this Berlin-based developer of the widely successful social
networking platforms for (mostly college) students across Europe, StudiVZ and
MeinVZ, represents a solid revenue engine for MMEG.
One of the big valuation gripes by investors about social
networking operators in general has always been the absence of clear revenue
generation pipeline solutions in the business model. It has always been network
first, content and capital later (build it and they will come). Twitter
(NYSE:TWTR) might be the most notorious case, with its massive user base and
seemingly unimpeachable status as a new cultural norm, combined with an
inability to really harness the revenue generation potential of that user base.
Twitter has continued to go the ad route and has had some
success in doing so, but it is becoming increasingly obvious to many sector
operators that content is indeed still king, and meaningful impressions are
driven by original, high-quality video/image content. In order to carve off an
ever larger slice of the social network ad spend pie alone, which is on track
to hit nearly $36 billion next year (or 16 percent of total global digital ad
spend) according to eMarketer analysts, network proprietors and all businesses
that use those social networks to engage their customers will be forced to
channel high quality and/or original content at users. Symbiosis is required
between networks, advertisers and content providers in order to make the
chemical equation balance.
Poolworks is an interesting case, as StudiVZ and MeinVZ are
more like a Facebook (NASDAQ: FB) geared toward students, with its core user
base in Germany, Switzerland and Austria. The platform has seen some bleed in
recent years, as have all entrenched social networks, given the continual rise
of new entities and other instant messaging environments like Yahoo’s (NASDAQ:
YHOO) Flickr, Facebook-acquired Instagram, or sites such as Pinterest and
Snapchat. However, Poolworks’ tight rapport with a choice demographic and its
core user base being in these highly sought after European markets make it
ideal pipeline for a company like Momentous Entertainment Group.
MMEG will funnel Hollywood-quality film and TV via a
branded, streaming, end-to-end “internet TV” over-the-top (OTT) content
platform, functionally akin to Netflix (NASDAQ: NFLX) or Amazon Prime (NASDAQ:
AMZN) streaming. The numerous shared revenue streams enabled by the deal will
help to foster a strong relationship between the two companies, coming from
sources ranging from ad sales and transactional VOD (video on demand), to
monthly subscription fees via the company’s own SVOD (subscription video on
demand) service, which looks like it will function in much the same way as
Amazon Prime membership in that it will grant subscribers unfettered access to
premium streaming content. The deal is also a rapid development vector for the
branded SVOD implementation itself, and MMEG intends to take the service
worldwide into the aforementioned $36 billion social network ad spend
ecosystem.
For more information, visit www.momentousent.com
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