One Media Ip Group (LSE:OMIP) — Preliminary Results

0:00 Good morning. Welcome to the ONE MEDIA IP GROUP PLC preliminary results investor presentation. We do apologize for the slight delay in starting this morning. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, can be submitted any time by the q and a tab situated in the right hand corner of your screen. Simply click q and a, scroll to the bottom, type your question, and press in. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Michael Infante, CEO. Good

0:30 morning. Good morning, and thank you all for joining us this sunny morning down down here on our webinar. It's great to speak to everybody. We have a presentation that's going to walk you through both our annual results and also strategically point out the direction in which ONE MEDIA is going. So without further ado, we'll get started. We have four parts to this presentation and overview, financial results, operational update, and an outlook, and a conclusion. First, the overview. Let me introduce the presenting team. Today, we have with us Steve Gunning, our FD, and we have Alice Dyson, our COO.

1:15 We are the executive team, and we are responsible for the day to day running of the business. Our two nonexecs, not on the call, Brian Berg, over twenty five, thirty years with Universal and stalwart of our industry, and we're very pleased to have Brian on our board. Brings a wealth of experience. And our chairman, Claire Blunt. Claire, currently CEO of The Guardian across European territories and Australasia. Claire brings with her a wealth of publishing, previous experience having worked for Hearst, and, indeed, we're very fortunate to have both of these people as board members and bring, as I say, a wealth of experience to to what we do.

2:03 The company ONE MEDIA was founded by me back in 2005, 2006. We went to the OFX market. We recognized at that time that there was a digital market growing. Apple had launched. They've been around since 2002, 2003, and digital rights were just beginning to launch. However, they were not being monetized. We set about at that point to raise some money on OFX. We raised a million pounds, and off we went with our buying of digital rights. Back in those days, it was literally Apple and a few other stores. There was no Amazon. There was no Spotify they were to follow, and streaming would have been something far off into the future. Downloading was the model of what we do. We acquired under license an awful lot of content, and over the years, we've converted some of those licenses to full ownership.

2:53 And that's been helping us with our delivery to good performance to bottom line. The, as other assets that we've developed along the way, Harmony IP, which we'll talk about a little later, but it's a method of actually not buying full rights. It's a method of buying part rights, a little bit like asset release in your house. Artists own and control certain performing rights. And, again, we'll cover how the, money is derived from our industry. And, of course, TCAT, our technical copyright analysis tool, which is a first in the way that, a content company has got involved in developing a software business, and, again, we're going to cover that a little more. TCAT is predominantly an anti piracy tool and is predominantly also a tool for investigating and auditing where your content is currently being developed over the many, many stores, some 600 digital stores in over 200 territories globally.

3:50 Understanding where money comes from in our industry has eluded many people, including colleagues in the industry. Primarily, there are three avenues of income. There is the writer's income, there is the performer's income, and there is the record label's income. They are the three major sources in following the money, which is important to understand, And and I'll just briefly touch on how this works, and I'll give some examples. Let's take the writer's share first. And the writer's share, we always use the example of Lennon and McCartney. Yes. It would be really good if ONE MEDIA controlled some Lennon and McCartney tracks. We don't at the moment, but it's a good example. The writer pens the words a bit like poetry and also pens the music scores that go behind the music. If we take the case of Leonard McCartney, a writing duo, the protection of rights in their in their income is for seventy years after their death.

4:43 Now that's seventy years after the last death in the in terms of a writing combo. So with mister McCartney still with us, the rights continue until his demise. The writer collects his his, royalties through a number of mechanical royalty collection societies. Here in The UK, we have the MCPS, and in every territory around the world, there are separate under statute collection systems for taking those royalties in. This controls both digital and physical earnings, so it will be the same on a record as it is on a stream, as it is on a download. We then have the performance itself, the recording. So once those writings, the writers have been written, turn them into a recording, we then have what we call the performer rights, and those performer rights are in the form of a track, in the form of a record.

5:30 They get uploaded now to digital stores or indeed embodied inside of a CD and or record vinyl, DAT tape, you name it, any method of of containing a recording. Those rights are collected again. There are performance royalties collected by, in this country, people like the PPL. Every time a record is played on the radio, every time it's streamed, it generates a particular right. And indeed, of course, the two rights together, the performer and the writer, if you're the Beatles and the McCartney, you'd be collecting on both of those. Finally, there's the record label, and let's use ONE MEDIA as an example of being a record label. Under contract, not under statute, we'd make an arrangement with the performer to acquire, buy, and or license the rights. We would then have the job of task of uploading those to the digital stores, collecting the money on those digital stores, and then sharing whatever under contract back to the performer.

6:31 Along the way, we may do deals with synchronization. That's the use of music being into movies, gaming, TV shows, any particular use, right the way down to music in an elevator, right the way down to music in clubs. There is a a usage fee that's paid and then collected. So, hopefully, there there's an understanding of following the money where the money comes from. We're now going to talk about financial, results, and I shall pass over to my FP, mister Steve Gunning, to pick up on this. Thanks, Michael. So we obviously now move on to the next slide, which is the financial results for the full year. In November, we sent out a net RNS confirming a trading update of a 4,400,000 revenue,

7:17 which is 10% up, which we were keen to see on the US dollar effect, but we also had a very good steady year. We also had a strong EBITDA performance of 11 11%. Obviously, with our business model, a lot of revenues flows down to the EBITDA and bottom line cash. Operating profit wasn't quite as high, but we did have a little bit of step cost mainly relating to some overheads to do with IT systems internally to make sure our royalty reporting and internal management information is strong and robust to help us deliver what we need from an internal and external analysis point of view. We also have a very good full free cash flow yield, which is a strong we are a strong cash generative business. Throughout the year, we spent, well, £4,300,000 at the nine acquisitions, which is 11.2 multiple.

8:08 Although the acquisitions may not have been as quick as we would like throughout the year, we do pride ourselves in making sure the multiples we pay are we're comfortable with, what we think is delivering future value to the investors, but we feel that it's the good and actual analytical view on what we spent on putting our money on. We also then were able to, as previous year, announce a final dividend, which we're very keen to, having hopefully help investors, get receive from us our confidence in the business that it stands. So overall, I think we had a very comp good year, a strong performance, and we're very happy with the main results that were delivered. We then move on to really these are just some high level graphical views of what we how we see the business.

8:53 Now, obviously, the revenue we've touched on, we've been acquiring stuff mainly for 2,019, 2020, but we've also been been buying stuff previously, which we've delivered some very good EBITDA numbers. We went past the dip in two thousand fourteen, fifteen, and now we've seen six year six years of beyond year growth, which confirms business model we believe is strong, robust, and as we said before, cash generative. The next slide really is sort of pulling out some key numbers from the income statement and our main year p and l performance. So for this year, we've obviously moved into analyzing or identifying the net revenue number. So, obviously, we the the revenue number is the number that everyone looks at, but really from our perspective, we see the net revenue has been quite a key number to look at.

9:43 The net revenue is effectively the revenue less any distribution charges or royalty costs. So we would call that in in simple terms, the NPS or net publisher share. So that's a good performance measure for us because really that's what we look at, from an industry perspective. It's how the the catalogs are delivering and what we see as a very strong, indicator on how what we're doing as a business. So, obviously, the gross margin from that perspective is 63% compared to 61% from the prior year. We then moved down the amortization of catalogs. The nature of our business is we although we acquire the assets, we have to amortize them over a period of time as well. Whereas from our perspective, obviously, we believe they increase in value, which we'll touch on in a bit. Then as I said, we know the slight step cost in administration expenses.

10:30 We don't as a business, we have a very tight overhead management system. We don't really require to increase our admin expenses or overheads in relation to revenue. So in reality, where we can increase our revenue, it doesn't mean we have to increase our overheads in in context in the same way. Then it flows through nicely to also a good EBITDA performance we were happy with, and we think it's very consistent in what we're expecting for the performance of the business. Then, obviously, our balance sheet, I mean, we have a very quite simple balance sheet from our perspective. We obviously have our intangible assets, which are what we require. As I mentioned, we obviously we we have to amortize them. So in theory, they're reducing our balance sheet rather than what we believe in increasing value. We have a good strong cash position. Obviously, we spent money in the year, which is noting reason for the reduction, but we had some money at the year end. And post year end, we acquired some additional IP, which is we're actually in an RNS.

11:27 So we our main point really is that we obviously we have money to spend, and we will probably spend it in the right way to the right multiples where we see the correct assets for future value. And then really onto what we see was a a separate process which we acquired at the end of the well, at the end of the year and last month was an independent valuation of the catalog. Our industry is very, is quite complicated in and that people understanding how we value the assets. And as I mentioned, really, we we have to the balance sheet doesn't truly reflect what the value behind it is. Now in in the other areas, people like Hypnosis and Roundhill have taken a very simple similar view.

12:12 They obviously have to do a certain a way of accounting for the asset, but they also want an independent person to say, we believe that this is what the true reflection of what you had to pay. If you had to buy this asset in the market, what you would expect it to pay. So although, in technically, we've got 40,000,000 of assets on the balance sheet, It was valued by independent valuer at 35,000,000. Michael, would you want to maybe add a bit of commercial view on that side of the evaluation? Yeah. Thank you, Steve. I think it's generally known and understood that multiples play a big part in the way that companies go out and acquire. In the last three years or so, we've seen many more players coming into the marketplace and picking up content. This has pushed prices up. In pushing prices up, it doesn't necessarily increase the value. It just means you're buying at a higher price. ONE MEDIA has had a policy of being conservative and taking a much longer view over the way in which it pays for its content because prices do have a habit of going up and down. And in my thirty years of working in the industry, it doesn't matter whether it was a pound or a £100. It's the multiple that is the governing, point, I guess, of making a value on a product and how long it's gonna take you to get your money back.

13:26 The way that we've taken a view on this is to say that our blended rates over the last fifteen years of buying have varied from the original ones that I spoke about when we set about buying digital rights in the very early days up to and including the last three years where we've paid

13:42 a little higher multiple, still within the directors' expectations. The view we've taken that or should I say the valuers have taken, with guidance from us in terms of understanding the markets is that a multiple sitting at about 12 and a half times is a way of of valuing content at a grassroots level. If somebody's paying fifteen, twenty or 25 times, that's fine. And maybe the blended rate in the next ten years does go up to 15 or 17. We like to value well below that to give us a bottom line position. We took 12 and a half. I looked at the markets along with the valuers, and Steve and the valuers then took a view of saying, if we had to buy the catalog that we own today and we pay 12 and a half times for it, that's the maximum that we would look at in terms of valuation. It's not about ramping. It's about a conservative view on on valuations.

14:34 So that's where we lie. At 12 and a half times, if I had to buy back the catalog tomorrow of what we currently have, there we have our value. And and quite frankly, if I could buy back the catalog or a similar catalog to what we have at the moment at 12 and a half times, I'd do it day after day. Steve, back to you. Thanks, Michael. Yes. So, obviously, the the the main point of this was really to as an industry evaluation now, we try to move on to a position where this will be something we'll be looking to probably add into our things, not every year because I don't think it has a value of of a yearly evaluation process, but certainly every every couple of years or it doesn't certain change in the market or the valuation process. I think it was a very useful exercise for us as a business because it helps us understand our business even more than we did before.

15:22 But we're hoping to try and add into a further external understanding of the business because the market isn't as straightforward as people may believe. Hypnosis and and Roundhore are certainly helping to explain things more, but we obviously want people to understand ONE MEDIA's positions in that market where we're not exactly the same or very similar. So, hopefully, this this will help demonstrate our position in the in the in the industry, but also is something which confirms what we've said internally for a while that we are undervalued. And this hopefully explains a bit more well why we believe such a valuation is more realistic.

16:05 So Yeah. Just talk now about an operational update. I'd like to invite Alice to comment on our acquisitions and talk a little more about this. Hi. Thank you, Michael. So we've we've had a very strong acquisition strategy over the the last few years. We we raised 6,000,000 in 2020 to go and acquire more catalogs. And we look to identify overlooked and undervalued content so that we can maximize exposure and usage and ultimately improve the returns. So we've invested, to date 4,300,000 of that 6,000,000 across nine acquisitions at an average blended multiple of 11.2.

16:58 And that's testament to the way that we,

17:01 value catalogs and look to add value to them. So it may mean that we're we're slower in finding catalogs, but we'll make sure that we don't overpay and that we find the right kind of catalogs that are in those in terms of, the life cycle of the the music. They've degraded in terms of all of the risk has been taken out of it, and they're an annuity like, income stream. So the largest acquisition undertaken by ONE MEDIA to date was a catalog by American country music star, Don Williams, and there's over 200 tracks in that. So and additionally,

17:39 I'm sure you will have heard of Take That Song, A Million Love Songs, Could It Be Magic and I Find Found Heaven. We bought the producer royalties. So Michael's touched on earlier about the different income streams associated with music. And And there's there's producer royalties, there's writers royalties, performer royalties. So we've looked to spread our risk in acquiring different rights attached to different music. Additionally, we've acquired Barry Blue's producer rights to Heat Wound, Boogie Nights, and Always and Forever. So and additionally, the the rights to Culture Club. So these all sit within, if you think about it, the eighties and nineties. So consistent evergreen tracks that are gonna continue to produce very steady income stream streams.

18:30 Good music doesn't have an expiry date. So, additionally, we we acquired Kid Crayola and the Coconuts compositions rights, Annie, I'm not your daddy. So hopefully, there's lots of tracks in here that you remember fondly from nights on the dance floor. Michael, would you like to add anything?

18:51 Yeah. I'm just trying to remember nights on the dance floor. Don't know who who sang that, but there we go. Yes. I think Alice has coined, what we need to be talking about there on acquisitions, and that continues. That is just another day in the office for ONE MEDIA and working with artists. Our specialized areas are sixties, seventies, eighties, and now nineties. We're acquiring music that has, forgive the pun, track records. We're not buying music on the front line.

19:18 Typically, what tends to happen is that when a track is released and if we took it took it at its highest, an Ed Sheeran track, there's a huge spike in sales for the first few years as it goes global and and and gathers a great following. Now, you know, ten years down the line, is that a one hit wonder or is that a track that's got real traction? We tend to look at those ten years and older. So the spikes have actually finished, and now we're down to to level pegging, and we're looking at recurring income. They are the sweet spots that we that we look to buy. Moving on.

19:56 Where are we here? Here we go. I'm sorry. My screen is just on a little okay. We're talking now about Partly IP. Partly IP is the I suppose the initiative. It sits within us as an initiative of the way that ONE MEDIA has been acquiring much of the way our products we've built over the period under review. It's a method of not buying all content. And if you think about, the way I explained the income that was coming in through, the writers, the performance, the, publishers, and the record label, artists that own the rights often own many different avenues of income. Consequently, what we get here is an ability for them to release some of their earnings and part and package of their income. So Harmony, we believe that, it was a first in the way that we went out of gold by as a percentage.

20:51 That means that we've been able to deploy our income and our monies, accordingly, and we've been able to actually take a piece of the action, to coin a phrase, and start to actually get the artist to release part and package of their income without separating themselves completely from their their their tracks, which now after thirty or forty years, these tracks are their babies. It is the family silver. They want to be attached to them. They get the benefits also of our TCAT, which Alice will cover shortly after this slide, and the TCAT protection that gives them, almost a hidden audit trail that ONE MEDIA then carries on. Because if we bought twenty, thirty, 40% of the track, we have a vested interest.

21:36 We want to police our side of it, which means that, automatically, their side is being policed. This has been very attractive to artists because auditing is a very, very expensive route. So the way that Harmony works is on introduction and and meeting with our with our with our pipeline targets of artists and our producers and record labels that we work with. A deal is struck on a percentage basis or a part of their they may sell us their writers' shares. They may keep their performance shares. They may keep their publishers' shares. But, of course, the moment that we've got involved with those tracks, then, of course, we start policing them. If they take twenty, thirty, 40% of of of the income that we take, obviously, we're gonna have first dibs on trying to then buy the other side of the income streams that are there.

22:21 This seems to work well, and we seem to form great long term relationships with the artists and performers and and labels that we're doing these deals with.

22:29 As far as we're concerned, there aren't very many operators doing this. In fact, we don't know of any. It's a little bit like asset release in your house, except there's no payback. It provides artists with a a valuable aligned partnership with us and, of course, access to TCATs, and there's been significant interest from artists underpinning strong growth prospects. Now what this really does is it allows them to start to plan. They get a chunk of money. They can start their whatever their plans are, inheritance planning, tax planning for the future. So we believe that Harmony is a very good tool to be working with artists. It doesn't give them a 100%, out, but most of them aren't really wanting that at this stage. Alice, perhaps you can talk about TCAM. Yeah. I'll just I'll just add to that the Harmony I IP conversation.

23:18 So writers and music musicians, they the tracks they create are really important to them, and they love them like their children. It's creative process, and they they choose very carefully their partners. ONE MEDIA is in a unique position on the London Stock Exchange, but we're also considered by the record industry as a boutique record industry that is very well respected by artists and musicians. So if you take, for example, Mongo Jerry's track in the summertime, it's over 50 years old. And so it's provided for for Ray Dorsett, take care Mongo Jerry, for all of his life. So it's it's older than his children, and, and I laugh him and say, actually, it's and it's lasted longer than some of his his marriages. So in terms of how important it is to him, it's extremely important. As I say, it's provided a revenue. So when he thinks about what he's going to do in terms of planning for his future, he's gonna think very carefully. And he may not want to sell all of those rights in one go.

24:18 He will want to find the right partner who's gonna understand what he wants for the legacy of his track, that they're gonna be able to make sure that it's future proofed. And this is where TCAT comes in. So TCAT was in invented by ONE MEDIA. It's a unique software tool that because we work in the music industry, we understand the challenges that face record companies in terms of piracy. So there are over 200 different stores, DSPs, we call them, but digital store providers. And that when we talk about that, we mean Apple, Amazon, Spotify, Deezer, all of all of the stores that are in the cloud. So so making sure that, the tracks are not being pirated is a real issue.

25:05 So within those stores, 60,000 tracks are being uploaded to Spotify daily, and there is no tool or there was no tool that enabled artists and musicians to be able to make sure that their tracks were not being stolen and and misappropriated. So TCAT, which, has a very dry name technical copyright analysis tool, when we developed it, it actually stands for to catch a thief. And that describes exactly what it does. So we developed this platform, and it enables you to make sure your track is not being pirated in all the stores, and it's absolutely unique in this space. We put together an amazing team. I'll just Mike, would you wanna just skip to the the team?

25:54 We put together this unbelievable team. ONE MEDIA is a content company, and we acquire content. We're not a software business. And we've been in a unique position in order to the problem within the music industry, but then we had to recognize that we don't know how to write algorithms, and we needed to put in place the very best possible team to make sure that TCAT could fly as a business. And so we put together a team that we knew would be accepted by the music industry. So the the music industry is about relationships and bringing in a technology business that is gonna be trusted and respected means that you have to have the right team in place. So we've put in place the chair, doctor Ed Vernon, OBE, who is, has huge experience in taking businesses, tech businesses. He sold his business to BT Northern Ireland, and he comes with a wealth of experience and is very respected within the software and tech world.

26:58 Have a CTO, Gareth Waller, who is a rock star in terms of analyzing data, putting together the kit and the stack. That means we're able to search the stores stores on a daily basis and draw back the results, and he heads up the the technology team. We have Michael and myself overlooking and overseeing and making sure that TCAT stays on tracks and and and delivers what ONE MEDIA's ambition is for the business.

27:28 Robin Abbasini is our CFO and COO, and he was actually involved with Michael in launching ONE MEDIA IP back in 2006. We have Nick Stewart, is the CEO, and he comes with huge record industry credentials. He actually was involved in signing you two back in the day, so he's widely respected. And when he he worked with us on acquisitions, which is how we worked, he became aware of TCAT. And he actually was so blown away by what we had managed to do. He wanted to be involved in the team, and we're absolutely privileged to have him taking over as CEO to run this next journey for TCAT. We have, as an adviser, we have, doctor Benoit, who is a rock star god in the data analysis.

28:20 So he checks the stats and make sure we're absolutely, in terms of our fingerprint technology and all of all of the resources we're putting together, that our mission is, well led and well protected. Thank you, Alice. We'll move to the next slide. We'll look at the outlook and then conclusion, and then we'll go to the q and a. Let me just bring this page up. Excellent. Market opportunities continue to be a supportive growth area. There's been a lot of forecasting in the last two to three years. Goldman Sachs, specifically three years ago, took a view of the industry and saying it was taking $20,000,000,000 then, and it was forecast by 2030 to, start looking at, then $42,000,000,000.

29:17 Since then, the industry has been upgraded. There's been some, phenomenal figures out there, a 131,000,000,000 billion dollars by 2030, and global live music revenues to reach 38,000,000,000. All of these things point in a graph upwards. Whether or not we believe it'll be a 131,000,000,000 or whether it's half that at 80,000,000,000, It really doesn't matter when you're talking about an industry that three years ago was sitting at just under 20,000,000,000. It's going places. The digital marketplaces, remains immature. We have a long way to go. We're seeing new avenues, not just new platforms and new stores opening in the likes of Peloton, and people like that are now adding significant income to the industry outside of just Apple, outside of Spotify, outside of even Facebook.

30:09 We're seeing the new areas of where music is being monetized. We can talk at length about digital radio. We can talk at length about the metaverse and and the way that music will be consumed, specifically legacy music that, typically, teenagers might not have tuned in through Spotify to listen to Bill Haley's Rock Around the Clock. But in metaverse, they will be sitting in a in a jukebox cafe having a virtual cappuccino, and this will be playing on in the background. A smart speaker smart speaker, should I say, technology. A lot of us now, you know, don't even talk about saying, let's play this record or let's find that record on our mobiles. Walk into your house, Alexa or Google, please

30:52 play this, and away the track goes. And, of course, it doesn't play one track. It goes onto a playlist and plays many tracks. So we're being helped, we're being advanced in digital music distribution with technology. That's not even going into what's happening with NFTs, and it's a a subject I've mentioned previously. And NFTs is something which, at the moment, we watch with interest. Where our asset may be available to become an NFT is something the company will start looking at towards the end of the year. At the moment, again, there there's there's a a feeling that the blockchain cryptocurrency ways of running this are still not understood. While media is conservative, we would want to make sure that if we're going to get involved in these, new avenues, that we understand them fully and that we make sure that we are able to monetize them to the best and and then to the interest of our shareholders.

31:45 So there's a positive outlook supported by accelerating structural trend trends and market growth expectations. We we could wax lyrical for many, many hours, and I know that there are some questions, and I'm keen to answer some of these questions. So I think what I'll do without further ado is pass back, to Alice to now talk about the growing market. Thank you, Michael. So this graph actually is a really good explanation about what happened to the music industry from 1999 to 2021. So if we start at the beginning, this this first column is all in red. And this is the physical market. So the record industry was all about CDs, vinyl, compact discs.

32:35 There was to carry home media, DVDs. You can see over the next ten years that there was just a a shift, and then there were new colors coming in. Well, what did that represent? So you had download and other digital. And this was the new education for consumers that there was another way to consume music. You didn't just have to listen to a compact disc or listen to the radio. So then you can see the the blue the dark blue color. Well, this is streaming. And now you can see that in 2021, this accounts for most of the way that consumers consume music. So there's been a huge shift and a huge change in behavior. And so with streaming, you have elastic walls. So there's no limit on the music that is available to you. And then if you Michael's talked about the metaverse, which I get

33:26 very excited about because that adds another dimension, a virtual world where you can go out with your friends and go to a concert and listen to music, or you can go to McDonald's with your virtual goggles on, and and you you can can be be served by Louis Armstrong. And then your your McDonald's will be delivered by delivery to your home. You know, this is a whole world that we haven't even begun to explore properly. But within this, all along the way, music will accompany this journey and it will be monetized. So the global revenue growth has from 2020 to '21 has grown 18.5%, which shows that the opportunity here is still vast. There's been a 65% streaming share of global revenue, which is very exciting.

34:15 And then most importantly for ONE MEDIA, because this is where we get income from, is subscriptions. So 21.9% growth in paid subscription revenue. Now add into that the new areas whereby you have an exercise bike in your home, Peloton, and then there's licensing opportunities there. So they're doubling up. So you're you're consuming not just from Spotify, but you're also got a subscription to a bike which comes with music that we earn and generate income from. So there's lots of new opportunities, and you can see the market is just set to grow. Consumers have been educated that they have to pay for music in this digital world, which, as you can see, there was a dip in 2010 whereby there was just a shift in understanding. We had to educate consumers that just to listen to music on your Alexa, you were gonna have to pay. They've been educated. They understand, and the model is robust. But But it it isn't finished yet. The music industry isn't done. It's gonna continue to grow. So this is a very exciting space for ONE MEDIA and for investors to be in.

35:23 Mike?

35:29 Mic back on. Sorry about that. Thank you, Alice. And, very succinctly put, we, we know that the, the industry is growing, and we'll now draw towards the conclusions that, hopefully, we can begin to convince some of the viewers today that ONE MEDIA is a is a good bet and a sound investment with positive performance delivering a double digit revenue growth. Some strong income, a credit acquisition pipeline. It is it is without a shadow of a doubt that, the amount of music out there from the legacy days, whether we're dealing with artists or estates, is still out there. It is not in any way in short supply. Harmony and TCAT approving additional income streams with strategic op opportunities.

36:16 Great potential. I think the backdrop remains supportive with positive outlook of underpinning dividend policy that we have. We have a had an independent portfolio of valuation of our catalog, such a strong hidden asset, hidden hidden value. We have the TCAT question of where we're going to be going with TCAT in the future, and we've spoken and made this public that we've made TCAT now an independent business. We've made TCAT now in in in in, I suppose, infused with a whole new team that are gonna take TCAT to the next levels.

36:53 We're very excited about that. We're very excited also that we can take advantage of new opportunities that, we've spoken about with regards to where digital music will be selling in the future, not just through digital platforms that we know today.

37:08 Where music is and the formats that if we go back over the years and we look at saying, well, it started with wax tapes, the Edison rolls. It went to vinyl. From vinyl, I suppose the next thing was cassettes, cassettes to CDs, CDs to downloading, downloading to streaming. Who would have actually thought Vinyl would have actually outlived, downloading? Downloading now has gone the way of the dodo.

37:31 Streaming isn't the final format. It really isn't. Where we go in two to three or four years' time, and we're not just talking about the sideways growth of the the pelotons, the metaverse, the the the other avenues of music synchronization. It's where will the next format be, whether it's smart speakers that continue to grow. What we do know is that the legacy music that ONE MEDIA has is always there to be rediscovered, and it's always there to be taken into a new format. There are no new hits from the fifties, sixties, seventies, and eighties. It is a finite collection. So, consequently, we believe that our continued investment into legacy content is the way forward. Now whether that's something that, you know, we do eight, ten, 12 acquisitions in one year and deploy our our our our and then we have a slow period where we consolidate. We're not about a fit and forget business. We have a team of creative technicians that sit back and disseminate the content when we buy it. They will make sure that the artwork that accompanies that content, that the

38:32 metadata is really important, it can be discovered. So from when we take on an acquisition and we take on content, there is work to do to get that product to continue to grow and be discovered by all these new avenues. So I think that from a perspective of the way that ONE MEDIA is looking forward to the future is very different to just a straightforward fund going out, buying, fitting and forgetting, and just taking in taking in that that income. We work hard every day to to make sure that our content is discoverable, and as a small cap and a small business with a small team, that's kind of our nine till five and what we do. So we'll be ready to take some, q and a. If I can pass back to our moderator, and I think we can always let me just allow Alice and and Steve just to add any final comments at this point or even just a goodbye. Firstly, Steve, is there anything that you feel you might need to unmute if you're not gonna say something?

39:29 Is there anything you want to add at this stage or wrap up? I I was just gonna just reinforce the point about the discovery. Children well, certainly my children, they think they're discovering new music when they they find the sixties and seventies and eighties. And this is a repeated generation after generation. And the content within ONE MEDIA's portfolio has no expiry date. Good music lasts forever. And so with ONE MEDIA, this is a a very sound investment piece.

40:04 Steve, anything to add? I think it's just to confirm what we've discussed, really. I think we have a very healthy, strong business in ONE MEDIA. We have some positives on-site with OMIP and TCAT, and I think the independent valuation helps hopefully educate the market in what we have. So it's it's it's sometimes slowly steps. Well, I think we're getting there to progress to the next level and hopefully prove the value that ONE MEDIA has. So other than that, I think thank you, everyone. Thank you. Thank you. Just as a final note because my father wouldn't forgive me as being the eternal salesman. You know, it's very easy to buy ONE MEDIA shares these days. You don't need an expensive broker. You can go online and you can buy. So we'll be ready to take your orders after the show. As they say in most theaters, merchandise is available in the foyer. Thank you for thank you for participating today. Michael, Alice, Steve, thank you very much indeed. What a great way to end, the presentation or the formalities. But anyway, look, thank you very much indeed for the presentation. Ladies and gentlemen, do please continue to submit your questions using the q and a tab situated in the right hand corner of your screen. Just while the company, take a few moments to review those questions submitted already, I'd like to remind you the recording of the presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

41:19 And Michael, as you said, we have received a number of questions from investors today. Thank you to all those investors who have submitted them. And if you do have a question, please continue to do so. Can I please just hand back to you? And where appropriate to do so, just read out the question and either give your response or direct it to one of the team, please.

41:34 Yes. Thank you. We'll take the first question that, that is here. It says, why is the fundraise for TCAP being done in the subsidiary company? Why not a fundraise on AIM? What is the nature of the funding equity in TCAT debt something else? This is from Paul B. There's a lot there to disseminate in in in a simple answer, but but let me try and and address the reasons that we put TCAT into a separate subsidiary as a limited company sitting within the group. We're firstly, we're a content company. We raised money, which was EIS and VCT money, to buy content. We've discussed that earlier. All the money that we've actually supported into TCAT has not been part of that fundraiser, and we didn't want confusion to say, we raising money for content? Are we raising money for a software business? So we've used our hard earned to support TCAT to this point.

42:30 We believe that TCAT is going to be best served by being independent. As a record company ourselves, it's going to be always slightly awkward with TCAT being a subsidiary and then trying to help the rest of the industry. So giving it its independence was the first thing. The second thing was that we needed to raise money. We were using EIS and VCT funding. We already have advanced approval from HMRC that TCAT is a qualifying business for the for EIS and VCT. ONE MEDIA needs to drop below 49.9% for that to be for that to be so. The last part of the, the equation as to why we didn't raise money through TOPCO is the is the question that haunts me every day is our share price. Our market cap is not recognized today. We have said that, you know, we've discovered a valuation within our catalog.

43:22 It's an extra £20,000,000 over and above the what sits, you know, in our balance sheet at the moment, in our asset sheet register. We also have TCAT itself, which doesn't have any reflection of value at the moment within the business. So enhancing and and putting TCAT out there was a way of not diluting those investing in content at a share price of 6.7 p, raising money, diluting those content holders to go into TCAT. And with regards to it going through a debt or loan from the company, we already do have some loans in TCAT. Part and package of its independence will be to repay those loans. ONE MEDIA also has a management position, albeit as advisers in TCAT, and that will sit there so we can keep an eye. And, also, we will be, in perpetuity, customers of TCAT.

44:12 That's really important to us and and our clients. Finally, ONE MEDIA does have a royalty that comes through from TCAT, so we will be working with TCAT very closely. We think this is the best way forward as a small cap. As I said, we're not a software incubator house, and and and we think we're absolutely on the right track. There's a second question, which is, again, a TCAT question. TCAT looks very interesting. What is what is currently in the market offering in this service, and how do you expect to compete, disrupt here? What is the business model, and how do you think you can take the market share? I'm gonna ask Alice just to talk initially about what ECAT and the market offering of this service is, with whom we're currently and have been on trial basis.

45:03 There are certain confidential things we can't answer. But I but, Alice, if you could just give a brief overview of the market offering of what TCAT does. Okay. So thank you, Michael. T TCAT metadata and fingerprint searching within the digital store providers, and we are the only company in this space at the moment. So we have a a first move advantage to land grab this opportunity, which is absolutely our intention. There are other providers in the marketplace who do something similar but not the same. So there's there's anti piracy within royalty that they identify within YouTube.

45:52 There's things like PEX. There's Audio Magic, but they're not the same. So they offer similar services, but they're not in the space that we're in. And this is where the the real opportunity lies with TCAT. Because if you think about piracy outside of digital stores, there's no money to go after. Whereas within digital stores, there's revenue and there's royalties being paid. And if that money is being paid to the wrong person, you've actually got some something tangible to go after. So whereas the BPI will shut down pirate torrent stores, there's no money to go after. They're the best the best conclusion is that they're just taken down or they're moved from Google search. But within the DSPs, there's actually real money to go after and real people to hold accountable to to and call for accounting, regarding the tracks that have been misappropriated.

46:45 Thank you. I think also, Alice, could you just talk a little bit about the street date report system as well with the positive side of TCAT, not just the infringing? Yeah. Absolutely. So I mentioned earlier that 60,000 tracks are being uploaded to Spotify daily. So how do you know that they've arrived in all of the territories at the right price at the right time? It was very difficult. There's no solution currently. TCAT offers a we call it the street date report. So if you think that you've got a a new release being coming out on Friday, which is the the global day for for tracks to be released there. How do you know that it's made it to store in time? You're doing a concert. You're a global artist, and you're doing a concert in America that night, your new track has hits is meant to hit stores in order that you can benefit from all of the promotion around that track, but it didn't make it to store. So what's gonna happen? Well, Tika actually can identify those issues, and it provides an exceptions report, to so that there's an action you can take to make sure that that track is back live doing what it needs to do.

47:51 It also makes sure that no other label at the same time has delivered into that same territory. So if you think that you had two the same track delivered twice into the same store, that's gonna split your market. Gonna affect your your chart positions, and it needs to be dealt with very quickly. So TCAT is the only solution that can deliver that information so that you know what to do and you can fix the problem. So deliver this service. There are three major record companies globally, and and we work with two of them. So they don't have a solution in house, and we're able to provide that solution for them. We additionally additionally, we we work work for for one of the largest distributors globally. So in terms of they're not looking to build this software internally, they look to third party, this service. And at the moment, we are the only people in this space.

48:44 Thank you. Just just a very last mention on CCAP before we go to the next question. The pirates haven't gone home. They haven't packed up their tents and gone home. The pirates are still very active, as Alice has mentioned, within within plain sights on the digital stores. One of the more worrying things facing our industry at the moment is is fake uploads and metadata hacking. One can assume that, if you're a pirate and you've been used to drawing people away from the legitimate stores to the pirate bay or wherever where you are downloading and streaming content from where nobody's being paid, if suddenly business is down, which it is now that streaming is now the 65% of the way that the global listeners, I guess, consumers now take take their music. So the pirates are working busily by uploading music, changing the metadata, I. E. Changing the idents and diverting way money may be going to the rightful owners. TCAD at the moment is the only tool that can detect by by fingerprinting and bringing back results and checking and comparing our clients' version against those that have been changed. That brings back many, many matches, and that's only really set to grow as as time moves on. Thank you.

49:55 We have another question regarding, from Andy m. Is the market, to buy rights more competitive with the likes of hypnosis? In actual fact, the market is more competitive, but I have to thank Merck and the team because what they've actually done is brought music currency and brought awareness to our industry. Three or four years ago, ONE MEDIA and others would have been unnoticed, and right now, there was a global gold gold rush. Yes. It's pushed prices up. Alice comes up with a great, analogy whereby we say that if we were going onto an airplane and we're going up onto that plane, Merck and his team would turn left and go into first class and buy Madonna and and Neil Young and everybody else. We we we turn right and we go down into economy. Now that's not in any way saying our rights are any worse or otherwise, but we're go we're dealing with a whole different set of targets that perhaps, not on the front page of, say, hypnosis, roundhills, or others, those with much, much deeper pockets.

50:58 I'd like to say to them in a few years' time, we'll be worrying them more than they'll be be worrying us. Finally, last question we'll take today from David s. Can you please provide some case studies re TCAT? How much piracy or misreporting have you typically uncovered at DPSs? A lot of the work we're doing on TCAT here is highly confidential between us and the clients. The case studies that we have done have been used to demonstrate to our target clients, to demonstrate working in tandem with them. The content is theirs. The content is is is is provided to us. We upload and we search, and we bring back, the results, which then prove to them that there there may be a problem, and often, there may not be a problem. It may be unmolested.

51:50 If we look at tracks that are gonna attract a problem, those problems usually are on frontline, you know, maybe the top 20% of music that's being distributed today. Are the, are the problems lying in the lower levels? No. But TCAT then works in two ways. It'll work in a way where it's discovering, products are being attacked in the top 20% of of releases, in the lower levels where people want to discover what's going on. They may not being hacked, but where their problem is is where their product's being made available. It could be being ignored in territories as Alice mentioned in this street data report. So that end, part and package of what TCATs are gonna be doing is to service both ends of the market. It already has created its own dashboard for the major record labels that we're working with. They now can upload and ingest their own queries, which remains confidential to them. Now that service is open to all record labels.

52:43 But, of course, to an independent, if you're just a guitarist in a pub band, you're not really gonna be able to afford that that subscription level. So what we're looking to do with CCAS over the next eighteen months is create a mobile app, do TCAS lite if you like. Artists will be able to drop in one track, two tracks, three tracks, get a heat map of where they're being sold, have a little look at popularity indexes, and more as more platforms are being worked out. We may be able to tell them, yes. This is streamed a thousand times on Peloton, but that's something that we're developing for the future. It isn't a dream. It's happening, and it's something which we will be developing, and TCAP Limited as an independent business will be keeping the market informed onto that. So I think that concludes the the the q and a.

53:30 I think I can pass pass back to our moderator. And, again, just thank everybody for their time and efforts today of joining us. That's great. Look. Thank you very much indeed for answering all those questions. And, of course, any further questions do come through for investors, the company will be able to remove those from a published published responses where appropriate to do so on the Investor Me company platform. Michael, perhaps just before redirecting investors to provide you with some feedback, which I know is particularly important to you, can I ask you just for a few final closing comments, please? Well, yes. I mean, in the famous words of Warren Buffett, you know, the the the stock exchange, you know, effectively is a voting machine and a weighing machine. I think we need to canvass more votes for our for our, our share price and our following. It's disappointing to the board, and I'm sure to to shareholders to see after the announcements recently, that there isn't more enthusiasm at our level of the market. So, I I really would like people to take a a better look at ONE MEDIA and to understand who we are and what we are and how we how we can change things by not just being a sit back fund that just invests.

54:34 We work very hard. We sweat our assets in terms of the way that we want those products to be up. We ensure the integrity of the content once it's up on the on the stores, and we ensure actually that all participants are receiving their royalties. We we are very much a fair play company in that respect. So I would welcome any direct content at any time. My email address is michael@1mediaip.com. Feel free to email me. I'm ever so accessible, and and I welcome any questions. And I know Alice and Steve would be the same, so, you know, you only have to substitute Michael for Alice at or Steve at. So, we're not hiding anywhere, and and we'd welcome any contact. And, thank you very much for today. That's fantastic, Michael.

55:19 Alice, Steve, thank you indeed for updating investors today. Could I please ask investors not to close the session? It should be automatically redirected to provide your feedback in order the management can better understand your views and expectations. This will only take a few minutes to complete, and that's greatly valued by the company. On behalf of the management team of ONE MEDIA IP GROUP, we'd like to thank you for attending today's presentation. That concludes today's session. Thank you very much, and good morning to you all.