PopMail.com Announces Aggressive Growth Strategy; PopMail.com Outlines
Pathway to Additional Revenue Streams
IRVING, Texas, Sep 21, 2000 (BUSINESS WIRE) --
PopMail.com, Inc.
(Nasdaq:POPM) today announced an aggressive growth strategy to build
out its fan club business model focusing on the music, sports,
broadcast and entertainment industries.
PopMail anticipates this revenue growth to come from three primary
sources:
-- Leveraging Fan Asylum's services across PopMail Network
Affiliates -- Fan Asylum generates $50,000 to in excess of
$1,000,000 in annual revenues per Affiliate through a variety
of fan club marketing services. The Company's goal is to
market these high value-added services to PopMail Network's
existing base of high affinity Affiliates in the sports,
broadcast and entertainment industries, thereby increasing
revenues per PopMail Network Affiliate.
-- Growing Fan Asylum's Affiliate base -- The average Fan Asylum
Affiliate generates approximately $350,000 in annual revenues.
The average Fan Asylum Fan(1) generates approximately $175 in
annual revenues. The addition of only ten high profile
Affiliates, bringing with them 20,000 Fans, can significantly
impact the Company's revenues.
-- Pursuing additional revenue generating opportunities -- The
Company currently reaches approximately 1.5 million Fans. It
generates almost no revenues from advertising and
sponsorships, despite the fact it distributes over 25 million
emails per quarter. The Company intends to leverage this
critical mass of Fans and email distribution to generate
advertising and promotion revenue opportunities
Going forward, PopMail intends to further consolidate its Internet
division's operations and to further expand its sports, broadcast, and
entertainment Services beyond those of an application service provider
("ASP"). The Company believes the new strategy positions PopMail as a
leading online fan club marketing company for the music, sports,
broadcast, and entertainment industries. In essence, connecting people
with their passions.
Gary Schneider, CEO of PopMail, states, "We're excited about this
new initiative and the additional revenue streams they present. We
have received positive feedback from many of our clients that want to
incorporate a robust, interactive and turnkey fan club model in
addition to our permission and affinity based fan club email services.
This places PopMail as a premier provider of fan clubs for some of the
biggest names in their respective industries."
Mr. Schneider also stated, "The fan club strategy differentiates
PopMail in its marketing and service offerings from its rivals since
PopMail helps brands target interests, not demographics. Most rivals
have to spend millions of dollars to acquire customers, but PopMail's
clients' brands are a magnet for fans. PopMail's clients have natural,
built in promotional platforms to promote their brands, such as on
air, in venue, and in print mediums. In addition, PopMail's model
creates a valuable database of fans and their interests. This database
gives PopMail and its clients the ability to target and market
products and services that are from the artist, team, or client that
are related to their Fans passion."
Mission
PopMail.com ("PopMail" or the "Company") is "connecting people
with their passions" through online, affinity fan club services (the
"Services"). These Services give consumers, viewers, listeners,
subscribers, members, and fans (together, the "Fans") of PopMail's
clients (the "Affiliates") the information they want, from the source
they trust, tied to a community they care about and delivered on the
platform they prefer.
-- Information they want -- The Services deliver to Fans
exclusive news, first hand information, client merchandise and
preferred tickets on the subjects they care about most --
music, sports, broadcast, and entertainment.
-- Sources they trust -- The Services deliver content,
newsletters and offers authored or promoted by "trusted
agents" -- teams, athletes, celebrities, artists, experts, and
others who can speak with authority, conviction, and
reliability.
-- Community they care about -- Our Affiliates' Fans are more
than subscribers. They are enthusiasts and supporters of a
brand with an emotional attachment to that brand. The Fans
have a passionate, emotional attachment to a larger community.
The Fans choose to receive only the information and offers
they request on the community about which they are most
passionate.
-- Platform they prefer -- Affiliate's content, information,
offers, and newsletters can be delivered in multiple formats:
plain text email, HTML email, wireless, and future platforms
as they become mainstream.
Background
Fans are passionate towards their most desired interests. In fact,
many are fanatics. This passion could be a favorite sports team, music
group, recording artist, entertainer, and/or television program. These
passions represent something unique that strikes awe in the fan and
makes them want to connect with their passion or interest on a more
personal and exclusive level. Fans want to get first hand information
and make purchases on products or services related to their passion.
Witness Fans that camp out for concert tickets or viewers that
schedule their lives around their favorite TV show.
In this environment Fans look for information that is of interest
to them from sources they know, respect, and admire. It is this
"emotional branding" strategy that makes affinity based marketing a
phenomenon. Fans don't unsubscribe from their passion and are more
active in and driven toward making purchases relating to their chosen
passion or interest. This is the value added proposition in an
affinity fan club marketing model.
PopMail positions itself as an Online, Affinity Fan Club Marketing
Company..."connecting people with their passions." The Company serves
Affiliates that have brands marked by strong affinity characteristics.
These Affiliates desire to frequently interact with their Fans and
strengthen the passion and emotional attachment that their Fans
possess toward the Affiliate and the Affiliate's community. Through
two of the Company's subsidiaries, PopMail Network and Fan Asylum, it
targets and serves over 500 clients in four affinity-based markets:
sports, music, entertainment, and media. The Company currently offers
three main lines of fan club products and services.
Official Fan Club Management and Web Sites -- Through its
subsidiary Fan Asylum, they provide official fan club Web sites
for artists and bands in the recording industry including Whitney
Houston, Boyz II Men, Melissa Etheridge, Aerosmith, Matchbox
Twenty, and more. Fans generally pay $19 per year to receive fan
cards, artist email newsletters, free email accounts, access to
artist sound files and photos, and opportunities to purchase
merchandise, preferred tickets and travel packages through the fan
club. Fan Asylum provides the turnkey fulfillment on all
offerings.
Self-publishing fan club email services -- The Company offers,
through PopMail Network, ENewsNotifier(TM) (ENN) and
PopFanMail(TM). ENN is a proprietary outbound email management
service that allows Affiliates to target news, content and offers
to their Fans based on their Fans preferences. PopFanMail is a
web-based email service for Affiliates wishing to provide free
email to their fans from their Web site.
Branded and co-branded content and newsletters -- Via a custom,
proprietary content authoring and distribution engine, the Company
publishes newsletters that are owned or co-owned by PopMail and
publishes exclusive content provided by the Affiliate to
interested Fans. The Company creates and distributes client
branded newsletters for many of its clients and assists Affiliates
in generating their content. These newsletters will become ad
supported to generate additional revenue for our clients and for
the Company.
Over the past twelve months PopMail has, through acquisitions,
positioned itself to execute on its goal of becoming a leading online,
affinity fan club marketer. The company has made four acquisitions
(PopMail.com, ROI Interactive, IZ.com, and Fan Asylum) and has evolved
into a leading affinity-based marketing company for Affiliates and
their Fans in the music, sports, broadcast and entertainment markets.
Each of these companies brings strategic assets to the fan club model,
as follows:
-- PopMail.com: Free branded fan club email (PopFanMail(TM)) and
entree into the key radio station affinity vertical.
-- ROI Interactive: Outbound fan club email service
(ENewsNotifier), professional sales force, and 250 high
profile sports, entertainment and television Affiliates.
-- IZ.com: Newsletter content authoring and distribution engine,
email expertise, management and entree to additional
entertainment Affiliates.
-- Fan Asylum: A fan club business model, proven and honed over
its 15 years of operations, approximately 15 high profile
music Affiliates, and introductions to numerous other music
artists.
With the proposed sale of its Cafe Odyssey restaurant division
announced on Sept. 15, 2000, PopMail is now positioned to take
significant steps to focus its management and financial resources on
the Internet operations, unlocking additional value from within the
businesses. Selling the restaurant division will enable PopMail to
focus on increasing shareholder value by fulfilling its Internet
vision through executing on the online, affinity fan club strategy.
The end result will be a company with an experienced management team,
strong fan club services, and marquee clients. Both PopMail Network
and Fan Asylum have recurring revenue streams and look to add
additional revenue as it rolls out its enhanced fan club services.
Consolidation
Over the past two months, PopMail implemented a cost reduction and
consolidation plan that reduced company-wide expenses by approximately
25% allowing it to execute on its new vision; focusing on strategic
partnerships and alliances to implement and enhance its fan club
model. This substantial reduction was accomplished by moving the
corporate headquarters to Dallas, consolidating PopMail.com and ROI
Interactive, and through the elimination of redundant expenses and
overhead among its subsidiaries.
Future Growth Strategy
Implementation of the new strategy began with the announcement of
the Company's intent to sell the restaurant division. The sale will
allow PopMail to focus 100% of its resources towards its Internet
division, which has shown triple digit quarter over quarter revenue
growth since launched. PopMail intends to further consolidate its
Internet division's operations and to further expand its sports,
broadcast, and entertainment Services beyond those of an application
service provider ("asp"). The Company believes the new strategy
positions PopMail as a leading online fan club marketing company for
the music, sports, broadcast, and entertainment industries. In
essence, connecting people with their passions. PopMail anticipates
its revenue growth to come from three primary sources.
First, PopMail will implement many of the services from Fan
Asylum's proven fan club model onto PopMail Network's high
affinity-based Affiliates. Currently, PopMail Network boasts over 250
high profile Affiliates, each generating approximately $5,000 to
$10,000 per year in license and hosting revenues. However, Fan Asylum
typically generates revenues of $50,000 to in excess of $1 million per
Affiliate. The Company's goal is to market a wide range of fan club
Services to its untapped PopMail Network Affiliates. Those Services
include tools that Fan Asylum already markets to its Affiliates, and
would be focused on services that are of interest to the PopMail
Network Fans. For example:
-- If PopMail Network can assist its clients in selling an
additional 250,000 tickets or products per year through an ENN
ticketing application module, it could add an additional $1.25
million in revenue if the Company could charge a service fee
of $5 per ticket or generate $5 per transaction.
-- If PopMail Network can market and sell to 50 of its
Affiliates, at a cumulative price of $75,000 per year, ENN
add-on video capabilities, wireless applications, fan club
member registrations, and contests, and move these Affiliates
up to the full services of a fan club model, the Company could
generate an additional $3,750,000 in annual revenue.
-- If PopMail Network can facilitate the sale of $10 million of
branded merchandise for its Affiliates at a 10% revenue
share, the Company could generate an additional $1,000,000 in
annual revenue.
Second, the Company will focus on growing the Affiliate bases of
both Fan Asylum and PopMail Network. Although Fan Asylum Affiliates
generate a range of $50,000 to in excess of $1,000,000 in revenues per
year, the average Fan Asylum Affiliate generated over $350,000 in
annual revenues in 1999. The average Fan Asylum Fan(2) generated over
$175 in annual revenues in 1999. The addition of ten high profile Fan
Asylum Affiliates, which would likely translate to approximately
20,000 new Fans, can significantly increase the Company's revenues, as
follows:
-- Over $375,000 in annual revenues from membership sales
-- Over $3 million in annual revenues from ticket, merchandise
and travel package sales
However, it is critical to note that the single most contributing
factor to the amount of revenue generated by a Fan Asylum Affiliate is
the frequency and success of an Affiliate's CD release. A successful
CD release directly impacts the success of an Affiliates concert tour;
a successful concert tour directly correlates to the magnitude of
revenues generated by Fan Asylum.
Finally, the Company intends to pursue additional revenue
generating opportunities, primarily relating to advertising and
sponsorships, for both PopMail Network and Fan Asylum. PopMail has
grown its critical mass as follows:
Quarter Ending
(Estimated) Statistic Mar 31, '00 Jun 30, '00 Sep 30, '00 --------- -----------
----------- ----------- ENN Affiliates(3) 160 230 260 Fans served by ENN 350,000
740,000 1,240,000 PopMail Network emails
distributed 25,825,000(4) 21,000,000 26,000,000 Fan Asylum Web site page
views(5) 8,100,000 7,500,000 6,500,000
PopMail currently generates almost no revenue from advertising.
The Company believes it can leverage the above critical mass to begin
generating advertising and sponsorship revenues. For example, if the
Company can monetize an advertising space in its newsletters, email
distributions, and its Web site page views at the rate of a $5 CPM,
then the Company could generate additional banner advertising revenues
of over $600,000.
Key Assets and Competitive Advantages
Affiliate Base
PopMail has and will continue to focus its resources on acquiring
clients that are characterized by high affinity followings in the
music, sports, broadcast, and entertainment markets through its
subsidiaries Fan Asylum and PopMail Network. These target markets
naturally attract Fans with strong emotional attachments and the
willingness to purchase products and services relating to their
community of interest. PopMail.com, through Fan Asylum and PopMail
Network, is a leading provider of online, affinity fan club services
and email services for such clients as:
PopMail Network
--------------------------------------------------------------
70 Plus 350 Plus Broadcast Media Clients Entertainment Professional Clients
Clients Sports Teams ------------- --------------------- ------------
--------------------- All NBA teams TV stations from: Esquire Ticketmaster
ABC, CBS, FOX, All WNBA teams Benedek, Granite, Cosmo Girl Madison Square
LIN, and more. Garden New York Mets New York Post
TV shows including: Radio City Dallas Stars Rebecca's Garden, Gaylord Digital
Music Hall
Michael Holigan's Texas Rangers Your New House, Arizona Dallas Symphony
and more. Republic Denver Broncos LA Opera
300 plus broadcast Minnesota Wild radio stations. St. Louis
Symphony
Fan Asylum
---------------------
Recording Artists
--------------------
Aerosmith
Whitney Houston
TLC
Boyz II Men
Melissa Etheridge
Lenny Kravitz
Mya
*T
PopMail Network and Fan Asylum's databases, through their marquee list of
Affiliates, are growing at the rate of approximately 400,000 Fans per quarter
and currently reach approximately 1.5 million Fans combined.
Low Acquisition Costs
The fan club strategy differentiates PopMail in its marketing and service
offerings from its rivals. While PopMail's rivals spend into the millions of
dollars to acquire customers, PopMail spends almost nothing on Fan acquisition
costs. Its Affiliates' brands have already built the Fan base, brand and
emotional attachments via a variety of promotional platforms including on air,
in venue, and in print media.
Proven Business Model
Fan Asylum has been in operation for approximately 15 years. Since inception, it
has needed only approximately $1,000,000 in net financing. In 1999, it generated
approximately $5,000,000 in revenues with only approximately 20 employees and 12
Affiliates.
About PopMail.com, Inc.
PopMail.com, Inc. is a NASDAQ publicly traded company (POPM) and is a provider
of permission and affinity-based email marketing services. The Company serves
clients that have a great affinity with their fans -- listeners, viewers,
readers, subscribers and customers. PopMail's services allow their clients to
richly interact with their fan's passions and interests. The company serves over
550 clients in four affinity-based industries: music, sports, broadcast and
entertainment.
The Private Securities Litigation Reform Act of 1995 provides a "safe-harbor"
for forward-looking statements. Certain information included in this press
release (as well as information included in oral statements or other written
statements made by or to be made by the Company) contains statements that are
forward-looking, such as statements relating to plans for future expansion. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future; and accordingly,
such results may differ from those expressed in any forward-looking statement
made by or on behalf of the Company. These risks and uncertainties include, but
are not limited to, completion of definitive purchase agreements, ability to
obtain needed capital, ability to attract and retain key and other personnel,
those relating to development activities, dependence on existing management,
leverage and debt service, domestic or global economic conditions, and changes
in customer preferences and attitudes. For more information, review the
Company's filings with the Securities and Exchange Commission.
(1) Includes only those Fans that paid a $19 annual membership
fee; the membership fee entitles Fans access to merchandise,
preferred concert tickets, tour packages, and other exclusive
offers and content.
(2) Includes only those Fans that paid a $19 annual membership
fee; the membership fee entitles Fans access to merchandise,
preferred concert tickets, tour packages, and other exclusive
offers and content.
(3) Excludes Affiliates using only the PopFanMail branded email
service.
(4) Q1 and Q4 of each year will be skewed higher as the activity
around the NBA teams and season represents a significant
component of the Company's Affiliate base and annual email
activity.
(5) The decreasing trend is directly attributable to the fact that
there were more Affiliate artists touring in Q1 than in Q3
CONTACT: PopMail.com, Inc., Irving
Adrienne Campbell, 972/550-5589
Adrienne.campbell@us.popmail.com
or
Continental Capital & Equity Corporation
Dodi Handy, 407/682-2001
dodi@insidewallstreet.com
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