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Augme Technologies, Inc. Message Board

  • wakemewhenthedaisiesbloom wakemewhenthedaisiesbloom Dec 6, 2012 4:25 PM Flag

    An intersting twist in the Pandora news

    An article on IV titled "CNN - What Pandora should really be worrying about - (and it ain't Augme)",
    posted by counting-heads is why the news about pandora may be a hollow victory for augt in some respect. Ultimately it may work in Aug-cricket's favor, because P is rendered a weaker adversary in the court battle, and they may have been thinking "what more bad could happen?" before the joyous news here.

    But as 'they' say, 'you cant squeeze blood from a cheese puff', if there is nothing there to get, then there is nothing to get. In the article it makes it clear that the music royalty rates for P are way too high for them now, and they may go higher as the music industry cuts its own greedy throat. They have a tendency to do that. It was the case with boombox radio that had many millions of listener hours in around 2002, and would have been way beyond where P is now, but they dumped their considerable music formats in favor of brokered talk-radio when they were informed by the industry they would have to pay 1 cent per song played, at a time when they had zero revenue from advertising. Pandora currently pays a royalty of $0.001 per play, and that eats 55% of their revenue.

    The music industry is run by very greedy organizations that promise way too much to the artists, who demand way too much and really mostly deliver a very mediocre product. They may not realize the role that 'air-play' plays in the promotion of music. It is a fine balancing act, but people are reluctant to buy music unless and until they sample it (hear it) a number of times first, thus the role of what used to be radio stations, and now is the pandora's and other on-line sources. If they put them out of that business as they did BBR, they will find it all that much harder to promote the sale of music. IMO, they will have to give some to get some.

    Now as for the IP, we may win against P and we may not. We may settle with them, but that would probably not produce as big a windfall as one might imagine due to their current predicament, but what I am confident is that it would further establish the validity, and enforceability of the IP, and that is worth the pot of gold.

    BTW, velti has also shrunk to a mouse so I don't expect much windfall there either. MM may be the biggest score if landed short term, then eventually AOL and Yahoo and even bigger fish. Too bad we did not start with the smaller ones first, but what can you do?

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    • Wake, there are couple of ways that Augme can prosper in case of settlement or legal victory. Its not always cash based or based on the size of their purse. To me the most beneficial and rewarding is to take their clients! How? Lets say that we win a legal battle against P or they settle. Even if they can not afford to pay us the past royalties, the future licencing fees will put a much harder pressure on their margins along with their rising royalty cost of music. This could put pressure on their on business enough to effect their customer base via layoff or lowered customer service. The legal win or settlement is something that their customer will know about and the combination of this and derogation of services will compel their clients to slowly defect to competitors....specially augme that just won the patent lawsuit for the technology that they were using. If we can get thier clients then the revenue will be a reward by itself right? This is just an example of how we can win by put our competition in a licencing choke. So, IMO, a win for augme can be rewarded via cash or validation of IP and in combination obviously.

      Sentiment: Strong Buy

      • 2 Replies to sirius_yomama_2
      • Remember how much of Pandora's revs come from mobile and that they have stated they are a mobile advertising company. My theory on why Augme did not release a PR on that devastating Markman ruling against Pandora is that the parties might have been talking settlement before the ruling and Augme may not want to kick them when their down unless they need to. Maybe Hussey says to Kennedy I'm going to be a gentleman and not issue a release allerting the masses unless we need to. Pandora is in trouble and has no choice to settle. This case is nothing like the others and this judge gets it. Just shows how strong Augme's patents and cases really are when you have a good and educated judge. If we had got this guy instead of McMahon and the other, AOL and Yahoo would be over and this might already be a double digit stock.

      • siri, I agree with everything you say about how aug-cricket may come out ahead, and could acquire some of their customer base. Too much cost pressure on P may force them into adopting a pay per view model, which are generally commercial ad free, since the advertising model may not allow them to make any money.

        As it stands now with P, based on the advertising revenue model, they loose money on every song they play, so the more listeners they have, the larger their losses are. In that case, we would hopefully absorb some of their customers which would no longer advertise with them.

    • wakeme, as far as velti goes, i know they're divesting some of their assets, none US related that i can see. They just had a record quarter of 62mm in revenue and are very pleased with their US business...not that they're flush with cash...but they don't see the need to raise money and going fwd, expect to be CF breakeven or positive...not that i'm bringing this up as a possible huge score augt should they win a suit vs them, but i think US biz is pretty good

      "We had a tremendous quarter in terms of contracts signed with new and existing customers and are very pleased with the size and scope of the attendant campaigns, as well as the geographic origin of the customers, reflecting our success in driving revenue from our target geographies, including the United States, United Kingdom and Western Europe. These geographies provide great opportunities and better support our business model objectives, including improved cash flow. We therefore made a key decision in the quarter to divest certain assets associated with economically challenged customers, such as Greece and the Balkan States.

      • 1 Reply to xziw34
      • also , wakeme....the ceo and coo aggressively purchases shares, something we'd all like to see here

        -- Velti plc (VELT), the leading global provider of mobile marketing and advertising technology and solutions today announced that certain members of it board of directors, including the CEO and the COO, have purchased ordinary shares of the Company on the open market, at an aggregate value of over $1.5 million.

    • I dont agree at all. As of 7/31/2012, Pandora had $49.5 million in cash, $33 in short term investments and another $80 million in receivables. Remember, they went public in 2012 and raised ~$90 million.

      • 3 Replies to imiami55
      • miami, ok that is today. If they settle soon, how much of that cash do you think they may be willing to offer up and part with when they are just trying to keep their heads above water. Much can happen between now and whenever things are ironed out. Read the article, it also talks about some pending legislation that may help pull their fat out, and that would probably work better for them and us in terms of royalties paid to everyone longer term, should we prevail; so anything is possible.

        I am not speculating on how it falls out one way or tuther, just that they are not as rich a target as some may have imagined, and as it sits right now, there is not as good a prospect for their long term survival. And that a victory against P may be more realized in the value of IP validation, than the cash windfall and royalty. Let us see what their situation is a year from now.

        ----------------------------------------
        BTW, this is the second attempt to post a reply!

      • Miami, point well made. And according to many observers, Pandora would not have a business model without our IP. So the argument can be made that a huge portion of their cash is directly the result of their infringement. As for me I was thinking long term in terms of the number of "infringers" this ruling could impact and also the fact that MM is a growing direct competitor and a win against them should have very significant material benefit going forward. Of course at this point it is all speculation anyway; but we shall see.

      • miami, ok that is today. If they settle soon, how much of that cash do you think they may be willing to offer up and part with when they are just trying to keep their heads above water. Much can happen between now and whenever things are ironed out. Read the article, it also talks about some pending legislation that may help pull their fat out, and that would probably work better for them and us in terms of royalties paid to everyone longer term, should we prevail; so anything is possible.

        I am not speculating on how it falls out one way or tuther, just that they are not as rich a target as some may have imagined, and as it sits right now, there is not as good a prospect for their long term survival. And that a victory against P may be more realized in the value of IP validation, than the cash windfall and royalty. Let us see what their situation is a year from now.

    • Wake, I completely agree with your thoughts on this. I think the biggest benefit of the Pandora Markman outcome is that it provides us with a legal "validation" that will provide additional leverage in future negotiations with other identified infringers where this and maybe other patents are at issue. I strongly believe that Hussey wants to avoid litigation going forward, and the leverage this "win" provides in settlement negotiations, whether done by us directly or by an NPE, is invaluable. In terms of direct material benefit, I agree that MM would be a more desirable win for us, and as Sirius has pointed out, the benefits of "winning" against a growing direct competitor are huge.

      • 1 Reply to hfb46
      • wake, hfb, I completely agree that a settlement with Pandora is more for validation then for money. don't get me wrong, cash, and we all know we need it, would be wonderful. but if pandora is losing money and we wait a year or so to actually settle with them we are not getting any more money than we would have gotten now. that being said, let's validate the IP with a settlement that is acceptable to us now, knowing that legal validation is much more important for us going forward than a few extra million bucks which we may not even get with Pandora losing money as has been posted here. a quick settlement with Pandora could also provide us with an NPE bidding war and we may get more money up front which will offset what we would've gotten with Pandora down the road anyway....." what a tangled web we weave."

        Sentiment: Strong Buy

 
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