Company Forecast 6,800 U.S Customers by end of FY18 with Revenue Run Rate of US$15.3m
Announce U.S. Update
BIG US Sales Model
Contracts on-boarded require a customer to sign a conditional agreement to take video technology and marketing products ranging in value from USD1,000 to USD12,000 pa. To date the sales team has been successful in converting customers into unconditional contracts at a rate of 50% and the ARPU of US customers is currently US$4,500 (AU$5,900).
In addition to the 800 signed agreements achieved in Q1, and the expected 1,400 signed agreements in Q2 and the company expect to deliver a further 4,600 signed agreements by 30 June 2017 resulting in 6,800 signed agreements for FY17/18. At a conversion rate of 50% and an ARPU of $4,500 this would represent US$15.3m in sales revenue.
The Company plan to expand US sales seats to 100 by the end of Q3 and therefore the above projections are conservative. Cash deposits in the US continue to grow and are expected to exceed Q1 FY18. Further updates will be provided in December 2017.
US Sales Strategy
The US sales team began offering high value video licensing packages to US customers in Q4 FY17. The Company offer video content as an integral element of a Big Review TV membership package, placing the emphasis on a 12 month membership experience based upon social video marketing across all three pillars of the business. US customers are not incentivized to pay money upfront and are signed onto a SaaS monthly payment arrangement, thus making it easier to on-board customers and facilitating faster growth than that experienced in Australia. US contracts are not discounted and the Company is actively in negotiations to secure US sponsorship options to further monetize the offer and increase cash flow.
The Company began exploratory operations to build its video content library in the US in 2015 and is operational in New York, California and Texas. The early proof of concept phase resulted in over 1200 US businesses being filmed and BIG now owns approximately 25 terabytes of US content for its video content library. Following appraisal of US opportunities by the executive team, the Company has expanded its sales operations in the US by establishing a 15 seat sales office in Austin, TX and more recently a 14 seat sales office in Los Angeles, CA. with plans to increase to 100 seats Q3.
In line with the Company's global expansion strategy, on 16/11/17 the Company announced the proposed acquisition of Tipsly LLC (Tipsly), a US hospitality platform. BIG's global expansion strategy includes partnering with local, trusted aggregators to facilitate swift and cost effective market penetration. The proposed acquisition of Tipsly was negotiated immediately prior to Tipsly's intended US launch and provides the Company with "ready to implement", sophisticated mobile and platform application code.
Jason Short, Global CTO of Big Review TV Ltd commented "We are excited about our timely technology acquisition of Tipsly and expect their contribution to catapult our mobile strategy. Technology features such as GEO targeted content, ratings, following contributors, and commenting will provide not only us, but also our customers the ability to interact with our users directly".
The Tipsly code is currently being integrated into BIG's video review app and is anticipated to be ready for soft launch in March quarter 2018. The launch will be fully backed with both digital and experiential marketing campaigns.
"We have been developing Tipsly's code, application and platform over the last 3 years and were planning to launch in late 2017. When we realized that the missing link was the ability to incorporate video content into the business model, we started discussions with the management team at BIG. Following BETA testing, Tipsly had everything ready to launch including relationships with advertisers, marketing agencies, an Uber ride-share program and a database of over 140,000 SMEs. By partnering with BIG, I feel that we have struck a win/win situation for both companies" says Tipsly Co-Founder and CEO Ryan O'Rear who will remain with BIG to help run the US hospitality vertical using the new BIG mobile video review app that incorporates Tipsly technology.
The Company previously advised on 16/11/17 that due diligence regarding the second part of the Tipsly acquisition is ongoing.
US Business Strategy & Three Pillar Application
Pillar One - Video Licensing Subscription
- 5.2 million US SMEs suitable for BIG packages
- Sales expansion planned to target key US states
- Negotiations on foot with US partners to target US SME space
Pillar Two - Video Content Curation & Monetisation
- Significant opportunity and demand for short form native video content e.g. Facebook
- BIG video library and ability to re-purpose and market content for US brand sponsorship
- Negotiations commenced with US partners to monetize video content
Pillar Three - Video Platform & App
- Significant US market opportunity for incentivized user generated reviews
- Negotiations underway with high profile US brand ambassadors to promote large volumes of BIG app downloads
- Significant market opportunity to monetise consumer analytics and Big Data
Commenting on the US outlook, Hugh Massie Chairman of Big Un Limited said, "The US outlook is huge. The sales process and metrics developed by the Company are highly scalable and exceptionally reliable. We have experienced 3 years of robust Australian sales data and we are now seeing these metrics mirrored and even surpassed by the recent US sales results. I am very excited by the Australian sales results that have been achieved to date. The sales revenue uplift from boosting our sales team headcount can now be predicted with a high degree of certainty. By taking a considered and strategic approach to rolling out our business model with targeted expansion in the US market we have ensured that expansion costs have been carefully managed with the foundation properly laid for a strong roll-out. The Company is now cash flow positive and at a tipping point. The resources and market opportunity in the US for BIG is exceptional. We have now established sales operations in Texas and California and plan further expans ion on the East Coast during 2018. We genuinely look forward to BIG becoming a successful and recognised brand in the US market in 2018".
The Company is laser focused on rolling out the BIG business model into the US and will provide further updates on US operations and marketing plans in the coming weeks. BIG's US public relations campaign commenced on 22/11/17 with encouraging US media coverage to date including TV interviews and online coverage supplemented by brand promotion across the front of the NASDQ building in Times Square. See: http://www.abnnewswire.net/lnk/OFYWL9CP
The Company anticipates further news on the launch and marketing of its Apple TV application, to be released before the end of the year.
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About Big Un Ltd
Big Un Ltd (ASX:BIG) is the parent company of Big Review TV Ltd. Big Review TV are innovative disruptors in the online video space delivering subscription based video technology products and services. The Company has operations across Australia and in New Zealand, the United Kingdom and the United States, Hong Kong, Singapore and Vancouver and was listed on the ASX in December 2014.
Big Un Ltd