To: Fred Thornell who wrote (35396 ) 10/10/1999 10:00:00 AM From: Fred Thornell Respond to of 44908
FROM MARTY; "What do you think the likelihood of competitors coming into the marketplace should the TSIG model start working....On the surface it seems that almost anyone could do it if so inclined....Provided they have a source with a music inventory.......Such as CDNOW or Musicmakers? These companies would make for very formidable competition....and have the resources to make it happen quickly if they want.....perhaps commercially as opposed to the charitable pipeline of distribution....." I believe John has given you a good opinion in his post #20268. In addition, I think it should be mentioned that some of the competition has already been doing just what you refer to... but not, and this is, IMO, an important difference, with the same business plan. Amazon, for example, is offering to pay something in the neighborhood of 5% of sales to organizations who direct people to their website. Between their ever expanding advertising costs and now paying groups to send buyers to their site (and only if these people actually buy from the site) they are, at least IMO, digging themselves into a hole. Every company needs revenues and that is what I believe TSIG is now focusing on. But, even more important, again IMO, is black ink on the bottomline. Would you rather TSIG had one billion dollars in annual revenues, but was showing a loss? Or would you rather see $200 million in annual revenue with a $100 million dollar profit on the bottomline? I'll take the latter... especially if we can get the execution moving rapidly and the growth becomes expotential. In reality, at least from my perspective, TSIG's gameplan is like an annuity... for TSIG and for their alliances. Yes, TSIG has debt. Very few companies don't. But once the execution of the alliances starts the revenue flow, the debt will dwindle rapidly. On the other hand, the "competition" is locked into long-term costly advertising contracts... which TSIG does not have. Remember... TSIG gets paid to advertise... a significant difference... I think you will agree. TSIG, as we know it, is a very young company and all good things take time, but if they can get the ball rolling, which I believe is now starting to happen, they will, IMHO, become a winner. In a similar fashion to John's E-Bay analogy, rapid execution is important because everyone always wants to do business with a winner. Can we do it? IMO... yes. Will we do it? Only time will tell. Best always, Marty