A Mirriad of growing revenue opportunities
We were delighted to have Stephan Beringer, CEO and David Dorans, CFO, present at the latest Yellowstone Advisory webinar on 17th December. A recording can be viewed here.
The company has just completed a very successful fundraise and the webinar was an opportunity for management to outline some of the exciting opportunities that are opening up for the company.
The presentation started with a quick recap of the company origins as a technology supplier to the movie industry working on feature films where it won an Academy award for its’ work in the feature film Black Swan. Roll forward to today and the company’s’ patented technology enables product and brand messages (advertising) to be digitally inserted into entertainment content.
The latest show reel was played which really gives a great visual introduction to the power of the technology and how it is currently being used by a host of brands including: Pepsi, Ford, Samsung, Sony, Universal, Nissan and Dominos. As well as highlighting some of the Channels and distributors signed up including: Sony, Conde Nast, France TV, Channel 4 and Tencent.
The context for Mirriads success and its much bigger potential is in the turmoil and change happening in advertising markets. Many consumers find ads annoying, resulting in a lot being skipped and not getting any attention. The growth of the streaming services has been predicated on a no advertising model placing further barriers to consumer brands reaching and impacting their target audiences.
Covid has accelerated some of the entertainment trends with the hours of media consumed continuing to rise. Video entertainment is viewed the most followed by music video and then social platforms. Another interesting trend is the increase in the number of subscriptions each consumer has (from personal experience I can certainly testify to that).
Increased competition between subscription services is leading to greater pressure on the subscription which can be charged. The streamers business model and consumer offer precludes them from traditional advertising and consequently the subscription services are looking at alternative sources of revenue. Mirriad provides the solution to brands, content owners and distributors. In the US, Europe and China the annual spend advertising spend is $135bn/year and Mirriad seeks a portion of this spending.
In content advertising allows brands to go into a new range of opportunities. Mirriad has started in film entertainment and moved recently into music videos but there are future opportunities in live action sport, gaming and influencer content.
Market research indicates that the advertising experience provided by Mirriad is superior to traditional advertising and provides a better experience for consumer and enables content owners and distributors to monetise their inventory. When Mirriad is used in combination with traditional advertising there is a significant improvement in awareness, consideration and ultimately product sales delivering superior returns on advertising spend for brands.
There was a great slide shown which indicated Mirriad was engaging with the top 100 global advertisers, the major US entertainment companies, Broadcasters in the UK, France and Germany and Tencent Video China. In this regard the company has made huge progress this year. In so many regards they are much more of a household name in the industry now. Some film producers are now beginning to sign contracts too.
Looking at some specific events recently Stephan highlighted the signing of a contract with a major US streaming company, that has a number of platforms. This is two year commercial agreement with the first four programs being prepared for advertising inventory and the first campaign running in December. There are seven major streaming platforms in the US (Disney, CBS, Viacom, ATT Warner, Comcast NBC, Netflix and Amazon) and all are targets for Mirriad. The expectation is now that one of these majors has signed the domino effect will see a number following them soon. They are in very good discussions with 3 companies and hope to sign one of these in the next 6 months. In terms on monetary value of the contract already signed Stephan indicated they generated advertising revenues of $7bn and that the Mirriad target was 0.2-0.3 percent in the first year and then double this by the second or third year. This would translate into revenues of $14m at the lower end of that target. The first campaign in December has already been sold and is from a large cereal manufacturer.
Looking at China they are very pleased with the progress at Tencent. Mirriad is now a key part of the advertising offer that is sold by the Tencent sales team and over 50 advertisers have been signed up this year. Tencent now talk about in content advertising just like they talk about other advertising opportunities to their brand customers and see Mirriad as a key partner in developing this revenue stream over the coming years. In response to a question Stephan mentioned that quite a number of brands have signed up for a second time and major brands are booking inventory for major campaigns in 2021
The recently signed Music Alliance was also discussed. For the first time in the industry advertisers can place ads into music related content on YouTube, vimeo or on the artists own channels. Its now possible for advertisers to run campaigns across a range of music genre targeting specific customer segments. In Stephans’ view this has completely elevated their status in the advertising market and many brands are asking for proposals and they feel that the first deals are imminent (a number of RFP’s are out in the market). The music alliance showreel was shown which illustrates how powerful the proposition is and is available here. Later in the presentation the music alliance was described as providing a new and compelling offering to advertisers which was being very well received. Brands can buy into a package of artists and feedback from consumers and brands is very positive.
Covering the very successful capital raise the rationale was described as making the most of the opportunity which presents itself in the market. The last 18 months have been spent being very cautious on costs whilst delivering the technical capabilities to allow the business to scale and building up awareness, relationships and contracts in the industry. The time now is to accelerate the growth and go after market leadership which they have prepared for and sales and marketing will take 30% of the funds raised.
In addition on the tech side they have been approached by one of their existing relationship with good sports contracts in the NFL, NBA to develop a live and real-time version of their technology. It’s a great opportunity as they already have a paying customer willing to trial this and will enable the company to evolve into the real-time marketplace as well. Stephan described this as a real game changer and a monster new opportunity.
With everything going so well there was a question about competitive threats. The company believe the 20+ patents they have give them a lot of protection against a new competitor trying to provide in-content advertising at scale. The second thing is that the company heritage in film entertainment gives them a lot of credibility with the streaming services. The third area is that it has taken Mirriad quite some considerable time to build the relationships they have and these would take some for a competitor to replicate too.
It definitely felt like there is a lot more to come from Mirriad over the coming months.
A recording of the webinar can be viewed here.