pledgemusic is a digital music company, directly connecting rhk... · dan rowe - ceo & managing...
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PledgeMusic is a Digital Music Company, directly connecting artists and fans to create, enjoy, and buy unique music related
merchandise, products and experiences in all its forms. We drive greater revenue, loyalty, and engagement across the
artist and fan relationship and create a more effective way for an artist to make their music.
Our innovative music industry platform will scale into additional verticals including books, television, film, and sports.
David Walsh - Chairman of PledgeMusic Russell Rieger - Vice-Chairman/GM of PledgeMusicDon Ienner - Former Chairman & CEO Sony MusicBenji Rogers - Co-Founder of PledgeMusic Dan Rowe - CEO & Managing Director of Sword RoweJosh Sason - Founder & CEO of Magna
Board Observer:Sam Holdsworth - Former CEO of RykoDisk
BOARD OF DIRECTORSMANAGEMENTDominic Pandiscia - CEORussell Rieger - GMMalcolm Dunbar - President UK/EUCaedmon Judd - CTO
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REGISTERED USERS
NET NEW USERS PER MONTHAVERAGE PURCHASE VALUE
3.5M25K$57
PledgeMusic Today
CROWDFUNDING SUCCESS RATE
AVG. INCREMENTAL ARTIST REVENUE
87%34%
REPEAT CAMPAIGNS20%
2017 GROSS REVENUE YOY Growth
CREDIT CARDS & PAYPAL ON FILE1.5M
+27%
Please Note: FY2016 Revenue and Growth expressed on a constant currency basis.
50,000+ Successful Campaigns
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PledgeMusic ImpactUnited States Key Chart & Revenue Contribution Results:• Lindsey Stirling (#2 debut) - 14% of first week sales, 51% of first week revenue.• Thomas Rhett (#1 debut) - 9.8% of first week sales, 30% of first week revenue.• Melissa Etheridge - 24% of first week sales, 66% of first week revenue.• Judas Priest (#5 debut - HIGHEST IN THEIR CAREER! ) - 10% of first week
sales, 30% of first week revenue.• Motley Crue “The End” Box Set - Over 1,800 in sales and $315K in revenue.
• Libertines (#3 debut) - 26% of first week sales, 51% of first week revenue.• Passenger (#1 debut) - 6% of first week sales, 14% of first week revenue• Marillion (#4 debut) - 53% of first week sales, 91% of first week revenue.• Gary Numan (#2 debut) - 27% of first week sales, 28% of first week revenue.• The Damned (#4 debut) - 54% of first week sales, 66% of first week revenue.
United Kingdom Key Chart & Revenue Contribution Results:
**PledgeMusic Artists Received 17 Grammy Nominations in 2018!!!**
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REGISTERED USERS
NET NEW USERS PER MONTH
3.3M25K
CROWDFUNDING SUCCESS RATE
AVG. INCREMENTAL ARTIST REVENUE
87%REPEAT CAMPAIGNS
CREDIT CARDS & PAYPAL ON FILE1.5M
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BUILD LAUNCH MARKET FULFILL GOAL PAYArtist and PM
Team develop a bespoke campaign
Key Elements include product mix, messaging, strategies, and manufacturing
approach
Campaign is optimized
prelaunch to deliver greatest fan
response
Launch strategy designed to
activate superfine and amplify
awareness via social syndication
Artist & PM marketing efforts
coordinated to attract both fans and existing PM
community
Artists currently generate over 400 pieces of unique content per week as the foundation of this promotion
For an additional fee, PM oversees manufacturing and fulfillment using our
unique relationships
Otherwise, Artist handles fulfillment
and delivery
87% of our crowdfunding
campaigns reach their targets
90% of our preorder
campaigns reach their goals
Campaigns exceed target by 12% on
average
REPORT
PM controls payment schedule to ensure project delivery and fan
satisfaction
PM reports sales to charts in US, UK, Canada, Australia,
and Germany
CONFIDENTIALCONFIDENTIAL�6
How a PledgeMusic Campaign Works
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”WEIRD AL” YANKOVIC : THE COMPLETE WORKS CASE STUDY• $284 average user transaction over 5,120 orders (and counting)• 33% of total traffic driven by PledgeMusic community• Lifetime Facebook ads have converted 14% total units sold,
delivering 136X ROI• 27 sets of signed Test Pressings (priced at $1500 each) sold out
within 6 hours• Highest grossing campaign in the history of PledgeMusic, with
over 3 months left to go
Notable Exclusives
Signed Test Pressing Set
Platinum Vinyl Bundle: 15 LPs, 100-page book, signed test pressing, turntable mat, socks, t-shirt, magnet, all in
replica accordion boxRetro Pennant
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THOMAS RHETT : LIVE! FROM THE B-STAGE
• This unique campaign celebrated Thomas Rhett’s new album release by offering limited edition bundles which included reserved spots at one of three live performances in Boston, Philadelphia, and Chicago
• Each bundle included a signed CD, digital album, limited-edition event t-shirt, and entry to the performance
• Average transaction of $51 over 2707 orders• Album debuted at #1 on the Billboard 200, with PledgeMusic
accounting for 10% of first week sales
CASE STUDY
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MELISSA ETHERIDGE : ALBUM PRE-ORDER CASE STUDY• $79 average user transaction over 2,357 orders• 24% of first week sales, 66% of first week revenue• 45% of total traffic driven by PledgeMusic community• Lifetime Facebook ads converted > 1000 sales, delivering 58X ROI• 20 signed guitars sold• Revenue from CD sales accounted for 1/3 total• #1 Blues / #9 Rock Billboard debut
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GARY NUMAN: “SAVAGE” CASE STUDY• $57 average user transaction and over 6,700 orders• 48% of total traffic driven by PledgeMusic community• Artist/project signed and released by BMG off the strength of the
PledgeMusic Campaign• #2 debut in the UK with PledgeMusic representing 28% of first
week sales.
Notable Exclusives
Signed Awards Show Bracelet Signed tour boarding pass Guitar rig used on tour
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Financial Overview
Note: exchange rate is 1.39 GBP / USD; 2018 amounts are Budget amounts.
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Campaign Revenue Growth Drivers Expanding our industry relationships.• Driving larger, more consistent deal flow of larger acts and higher-profile content.
• Corporate relationships with UMG, SONY, Orchard, E1, ADA , Spotify, Pandora and more secured.• Leverage recently signed Sony, Universal, and Warner deals to generate consistent campaign flow from key labels.
Broadening our geographic and genre reach.• 2017 launched our first focused push into the Continental European market.• We are adding artist acquisition talent focused on the pop, country, christian, latin, and urban
markets to build on our existing strong penetration in the singer/songwriter, rock, alternative, and metal markets.
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Strategic InitiativesRepricing Strategy• Company has approved and will be implementing a new pricing strategy to increase gross margins• Increase standard frontline campaign pricing from 15% to 20% gross margin, with higher rates for
specialized offerings
Technology Platform Investment• Real-time API inventory management• Automated campaign payment processing• Self service portal to onboard campaigns from smaller, unsigned artists on a scalable platform• Campaign cross-shopping functionality for the website• Improved and updated reporting, artist/internal dashboards, and business management tools
Advertising Platform and Strategy• PledgeMusic drives significant campaign revenue through high-ROI advertising spend• Opportunity to create an automated platform within Pledge (like Etsy / Amazon) that artists can use to
promote their campaigns• Generates more campaign revenue without additional Pledge resources• Pledge can charge a commission for any ad spend that comes through the platform
• Pledge can provide more sophisticated strategies at a higher margin for campaigns willing to pay for it
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Strategic Initiatives (continued)Content Licensing with 3rd Party Financing• Pledge often can license rights (either new releases or catalog) for an upfront advance and a small
royalty percentage• Multiple 3rd parties are interested in providing the advances for a reasonable cost of capital• Pledge can then earn a significantly higher gross margin on any campaigns using these rights
(50% - 90%) versus its base commission rate• Pledge is well positioned to evaluate the potential for these rights based on past campaign activity
and knowledge of the user base
Direct-to-Consumer Platform• PledgeMusic currently benefits from the pre-release album campaign cycle• Pledge does not participate once the album is released and/or the campaign is over despite intricate
involvement in the release promotion and strategy• By operating artists’ online storefronts, Pledge can capture margin on anything sold by the artist and
benefit from its initial commitment to release the album• There is potentially an opportunity to jump-start this effort through an attractive strategic merger
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Management TeamDominic PandisciaCEO
Joined 4/1/16 following 3 years as President of Caroline which experienced a record setting 2015 under his leadership, inclusive of achieving four #1 albums and record market-share and EBITDA. Prior to his time at Caroline, Dominic oversaw all revenue and commercial development for EMI North America inclusive of negotiating the deal that brought The Beatles to iTunes in 2011.
Russ RiegerGM
Russell Rieger has been involved with Pledge in multiple capacities since the fall of 2015 and brings significant music industry experience in his current role of General Manager. He’s previously served as General Manager and Executive Vice President of Creative for Maverick Records (of which Madonna was one of the founders), building the label into a freestanding record company with over 100 employees and working with successful artists including the Prodigy, Alanis Morissette, Muse, and the Deftones, as well as was executive producing movie soundtracks, including The Matrix. He has also served in various consulting roles for investment firms over the years in addition to his music career.
Malcolm DunbarPresident, UK & EU
A Founder of Pledge, Malcolm has lead the UK and European territory to explosive growth. Dunbar has previously worked in A&R roles at a number of major and independent record companies, including Universal, Warner, V2 and Sanctuary.
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Investment Terms
The Board has approved an attractive set of terms for the current round
• $7 million round with $4.5 million committed and $2.6 million funded to date
• Effective pre-money value of $6.75 million
• 3X liquidation preference
• Full ratchet anti-dilution rights