We first launched to the record companies in 2003 and faced a “chicken or egg” problem in that radio didn’t want to use the service unless there was content and the labels didn’t want to pay for the service unless radio was actively using it. It took four years and heavy subsidization by our investors to build up a network of active recipients in the US alone.

This network effect is an extremely powerful barrier to entry that will make it extremely difficult for a new competitor to displace our system. Both Universal Music Group and Warner Music Group have signed global agreements and Universal is working with us to roll the system out actively into 77 countries. It is extremely valuable to the industry for the entire world to be on the same standard and a standard readily adopted by all industry players. As we’ve encountered regional competitors, we’ve been successful in either partnering with them or displacing them as our offering is clearly the most advanced.

As of September 7, 2011, we have over 500,000 individual tracks, representing 250 million deliveries. There are over 50,000 industry professionals in our network and new professionals are automatically being added by the labels at a rate of about 150 new users per week. Current statistics are available  on the Play MPE® site.

A team of developers has been working on the Play MPE® system since 2002 without interruption and the system uses proprietary technologies that are not available for license elsewhere. The system is expensive to provide, with large fixed costs for R&D and infrastructure. We currently have four separate physical server facilities in North America and the UK, with a number of servers and storage arrays at each location. We currently have direct fiber optic connections to the internet backbone totaling 2200 Mbps.

We believe competitive risks are low and expect to continue to roll out globally with our existing pricing model and value proposition as it isn’t economic to compete with us unless a new competitor can achieve the same economy of scale.

Emailed attachments and standard FTP-based systems have no security, are slower, lower quality and provide no reporting and typically have low download rates. That said, they are cheaper and we plan to offer a competing low end solution under another brand which we would own, but that would compete with Play MPE®.

We still do see competition from CDs, especially for hit songs, where there is a perception that a couriered song might be more likely to stand out and be played. This CD usage has been in steady decline since we launched and because of cost pressures, we don’t see this as a long term threat.

System Overview
How it Works
Economics
Server Infrastructure
Competitive Landscape
Partners
Current Penetration
Growth Path