REVENUE STREAMS
C-3D Digital?s 2D to 3D conversion technology is being leveraged to establish several revenue sources, which should continue to drive DDD?s dramatic top-line growth and lead to near-term profitability.
Channel Subscriptions
Partnerships with leading cable operators nationwide will fuel subscriptions to the C-3D Television Network. As channel subscription sales increase and costs remain stable, DDD will enjoy expanding gross profit margins. DDD?s pay-per- view television offering, the Hotel Movie Network, is also gaining momentum. HMN revenue experienced explosive growth with a 400% annual increase.
Software Sales
Recent revenue gains are attributable to Strata, Inc., a leading computer graphics software firm acquired by the Company in mid-1999. Currently over one million creative professionals worldwide use Strata software.
Strata has established a healthy presence in the entertainment industry. Notably, Strata software helped produce the world?s top selling CD-ROM game MYST; popular TV shows Hercules, Xena; and the 1998 MTV ¸ Movie Awards; the Warner Brothers and Blockbuster websites; and Hollywood movies Batman Forever, Contact, and Wild, Wild, West. Strata is a best-seller in Japan and additional distribution agreements abroad should be highly profitable.
Consumer Products
DDD has the capability to take billions of dollars of feature films that have brought comfort, satisfaction, and excitement to viewers worldwide and reintroduce the films in 3D to meet existing demand and enter new markets.
By retaining the exclusive rights to license titles domestically and internationally, DDD?s converted 3D films will drive a burgeoning consumer products market. Videos and Dads of C-3D Digital?s 3D films will be marketed to a large global base of VCR-owners and will be distributed to major retail stores and sold over its Internet portal.
Technology Licenses
DDD is licensing its proprietary 3D conversion technology to television, VCR, and other electronics manufacturers. DDD also plans to license its 3D stereoscopic technology to Web companies interested in adding a 3D component to their websites.
Bundling Deals
The Company is reaping the rewards of several marketing agreements that combine DDD?s Strata software VideoShop? with popular video editing equipment. Copies of the Strata VideoShop software are ?bundled? with video converters, creating a premium package for home users and professionals to create their own videos in true, stereoscopic 3D. Revenues from bundling agreements are million-dollar transactions that have the potential to grow significantly in the future.
Advertising Revenue
DDD?s stereoscopic 3D technology creates a new spin on Internet-based advertising. Due to its uniqueness, the 3D.COM Virtual Reality Portal? is expected to drive a large flow of traffic to the site to provide the perfect landscape for Internet advertisers.
--------------------------------------------------------------------------------
EXPANSION STRATEGY
C-3D Digital is aggressively pursuing its position in 3D entertainment on television and the Internet. The Company?s rapid expansion is focused on:
Cable Partnerships
C-3D Television Network is significantly expanding its broadcast footprint through retaining exclusive relationships with cable and satellite operators nationwide and overseas. DDD?s 3D channel is now available across the U.S. A partnership to broadcast the channel on the GE-3 satellite exposes DDD to 70 million homes and broadens the Company?s reach to Latin America, Alaska and Hawaii, while enhancing its ability to deliver the network to its Asian broadcast partners.
Lucrative Marketing Agreements
DDD?s Strata software division is forging marketing agreements with makers of popular video editing equipment, including Apple Computer, Eskape Labs, and Belkin Components. Bundling services (adding Strata software to computer hardware and peripherals) creates a premium product to penetrate the consumer and business markets. These bundling deals are expected to draw over $1 million in sales in 2000.
The Company also recently announced that its Internet subsidiary 3D.COM will be designated as a primary portal to download Cycore Inc.?s leading 3D e-commerce technology, Cult3D. The agreement between Cycore Inc. and DDD will increase software licensing revenues and boost Web traffic significantly for both parties.
Strategic Acquisitions
The Company?s HMN division is focused on creating a high-tech entertainment and information network through key acquisitions. HMN acquired Capital Associates hotel properties to further its operating platform.
To increase in-room offerings, HMN signed agreements with three major entertainment and media companies: Twentieth Century Fox, New Line Cinema, and Warner Brothers, to gain access to additional high-quality, in-demand first run movies. The Company expects acquiring additional film rights will contribute to profitable revenue sharing arrangements in the near future. |
