From marketdd.com
Shares outstanding: 23 Million Float: 4 Million Current Trading Range: $1.50 - $1.75 52wk Target: $6 - $8 Contact: New York (212) 521-4075 Geneva (022) 707-6009
The 'DVD Juke System'
Take a unique high-tech DVD jukebox, strong management, the connections, distribution channels and a high speed satellite network, mix it all together and you have all the ingredients needed for one success story ready to happen.
There are approximately 350,000 jukeboxes currently operating in the United States alone, these are you standard coin drop operated machines... soon to be extinct once DVDT's next-generation Juke box system makes its appearance.
The company is creating the next-generation interactive, audio-visual jukebox system that is set to revolutionize the industry and take it into the next century.
Today's traditional jukeboxes play off a CD, a problem that commonly arises is when there is only one popular song on a particular CD, the owner has no choice but to place the entire CD in the machine, wasting money and storage space. The DVD Juke Systems created by DVDT are connected through a high speed satellite network and can update and replace information in a digital format on the system hard drive. New songs can be downloaded to the Jukes as they come out, a function that many potential owners will definitely be interested in.
An added feature is the ability to connect TV screens to the system allowing for music videos to be played. In addition, each Juke system is also connected to the internet, from which users can interface with through an icon display screen. Basically, the system serves as a satellite "downlink" for distribution of high bandwidth audio and video content. The content can also be transmitted, or "uplinked", from the Company's central server to satellites, and then "downlinked" from the satellites to satellite dishes stationed at each location.
If you do not have a dollar in your pocket to play your favorite song or video, not a problem, the DVD Juke System allows for payment by cash, credit cards, debit cards and smart cards. The company has future plans to make available (by the third quarter of 2000) the function of being able to 'burn' your own custom CD at the Juke System. A user would select the songs and copy them onto a CD on a fee-per-song basis.
The company is planning to have 20 prototype DVD Juke Systems in place by January 2000 to conduct a test market in the New York metropolitan area.
DISTRIBUTION
The company's management has relationships with distributors who control the jukebox industry, there are also verbal and written agreements with certain distributors to market the DVD Juke System to the locations that they service. As incentive for owners to install the DVD Juke System, the company is offering all of the coin drop income from the system to the owner and distributors.
MANAGEMENT
Lee Edmondson, CEO, specializes in venture capital, management acquisitions and strategic relationships in retail and multimedia companies. Over the past two decades he has been involved with several kiosk and multimedia companies. Since 1990 he has been involved with the development of a video juke box kiosk research and development company. In 1998 he assisted in the formation of Digital Video Display Technology and is responsible for the formative activities of the commercialization of the products and business.
Marilyn Haft, Executive Vice President and General Council. Ms Haft specializes in business and legal affairs in the television, film and multimedia industries. During the Carter administration, Ms. Haft served as the Associate Director of the Office of Public Liason in the White House, Deputy Council to Vice President Walter Mondale in the White House and to top it off she was also the U.S. representative to the United Nations. More recently Ms. Haft was a law partner of Tanner, Propp and Farber, a partner of Fischbein, Badillo, Wagner and Itzler and of Council to Summit, Rovins and Feldesman.
The Marshal Firm
The Marshal Firm is an entertainment law firm located in New York City. The firm is well known in the music industry and has been retained by the company to obtain and negotiate licenses for music and music content for the DVD Juke System. Some clients that turned to Marshal for advice over the years include CBS Records, Atlantic Records, United Artists, PolyGram, Bertelsmann, DreamWorks Records and Twentieth Century Fox to name but a few.
NeTune Communications
Netune will provide the satellite links and communications technology that will allow the company to transmit content to each DVD Juke System.
THE NUMBERS
DVDT plans to sell the Juke System to distributors for $6000 per unit. The cost of producing one unit is approximately $3500, thus giving the company $2500 initial profit per unit. The company already has commitments from one distributor to buy 1000 units in the first year of operations. Once the system is installed, the company charges $100 per month for content updates, communication and remote management. Since the system is linked to TV screens, sponsorship and custom content advertising are projected to be another major source of revenue. The company is projecting additional income of approximately $2.6M in the first year of operations from advertising alone.
The following figures come from the company's Executive Summary: 'Financial projections forecast total income in year one of between approximately $9 million and $23 million, depending on the assumptions used in the projections, and net income of up to approximately $4.5 million. By year five, the projections forecast total income of between approximately $300 million and $600 million with net income of between approximately $108 million and $250 million.'
Assuming the lower estimate of net earnings in the first year of $4.5M as stated above, with roughly 23M shares outstanding, this equates to an EPS of .20 cents per share. With an extremely low PE of 20, this would put the stock at $4. An upper range PE of 40 would put the stock at $8.
-------------------------------------------------------------------------------- SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS: Except for historical information contained herein,are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results in the future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product price volatility, product demand, market competition and risk inherent in the companies operations.
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