Enterprise Values of 22 Public Mobile Entertainment Companies Aug 2010

Update June '10: Enterprise Values of 21 Public Mobile Entertainment Cos Including Motricity

Updated Enterprise Values of 15 Public Mobile Entertainment Companies

What a difference a week makes. I'm already updating this spreadsheet with some new data. Here are some notable changes:

• Buongiorno posted Q1 2010 earnings
• Velti filed updated earnings with the SEC as part of their bid to go public on the NASDAQ (they're currently listed on LSE)... their numbers are pretty impressive (more on that soon)
• Mandalay Media, parent of Twistbox & AMV, changed its name to NeuMedia, Inc. & announced a notice of default related to a cash balance provision from a key creditor
• ROK Entertainment's stock is down over 50% today (guessing they'll be more news to follow). Btw - did y'all know the biggest shareholder in ROK is the DeJoria family, which controls the Paul Mitchell salon product empire? Always thought the guy in the ads was Paul Mitchell... but that's actually John Paul DeJoria (Mitchell was his founding partner). Anyhoo, probably hasn't been a great investment no matter how you cut & color it

Latest Enterprise Values of 15 Public Mobile Entertainment Companies

• Data for Velti & ROK Entertainment should be taken with a grain of salt, since they haven't released financials in recent quarters
• It looks like a couple of these companies should consider giving their cash back to the investors, and calling it a day. Some of them shouldn't be public at all (and are barely going concerns)
• I think the shining stars of this lot are the mobile games publishers Gameloft, GAMEVIL & Com2uS
• I look forward to adding Motricity into the mix, once (if?) they go public
• Let me know your thoughts on this and if there are any other public mobile entertainment companies I should be tracking

Enterprise Values of 15 Public Mobile Entertainment Companies

Enterprise Values of 12 Public Mobile Entertainment Companies

ROK Expands Games Push With Player One Purchase

WirelessGamesBlog.com is reporting this morning that ROK Entertainment (ROKE) has acquired veteran UK mobile sports games publisher Player One for an undisclosed sum. ROK, which has been primarily focused on mobile streaming video services since it's launch in 2004, has recently been bolstering its ROK 8 games subsidiary... in August the company announced a distribution agreement with Inspired Gaming Group. With regard to the Player One purchase ROK Chairman and CEO Jonathan Kendrick, said “Mobile gaming is proving to be evermore popular worldwide, so we are delighted to add Player One to our portfolio of revenue-generating mobile products and we look forward very much to the successful deployment of their existing library of world-class mobile games as well as developing new games, going forward.” In theory this diversification strategy isn't a bad idea, since games do continue to have the best business model in the mobile entertainment space (and video might have the worst one, frankly). The challenge here is that Player One isn't exactly on the bleeding edge of mobile gaming... they're a very UK-centric, old-line Java games house (they have 1 title in the US iTunes App Store).... and they've been pretty quiet lately. So for ROK to maximize the financial potential from this acquisition they absolutely must invest some money to make Player One more relevant in the post-carrier-dominated, smartphone app store, world. Overcoming this challenge will be a non-trivial task for ROK, since the company is definitely not rolling in cash.

ROK E Road

According to post yesterday on The Lawyer website UK law firm Field Fisher Waterhouse LLP is taking mobile video streaming company ROK Entertainment Group (ROKE) to court to recover almost $125k (+ interest) in alleged unpaid fees for advisory work on a planned acquisition of a company called Inter Credit Group. The action seemed to spook investors, sending ROK's stock down 88% today to just over a penny (yikes). ROK, founded in the West Midlands in 2004, has long struggled to find its financial footing and like many mobile firms of its vintage has redefined its primary mission more than a few times. They did make an encouraging recent announcement that their ROK TV product is now compatible with BlackBerry devices, which is no mean feat given how restrictive RIM has been with video players on its platform. Unfortunately this may be a case of too little, too late given the financial, and now legal, obstacles the company faces.

Mickey Flashing Japanese DVD Buyers

Engadget is reporting this morning that The Walt Disney Company (DIS) is embarking on a pilot project in Japan to bundle microSD cards containing full length features, with the DVDs of the same film, in order to give consumers a portable digital copy option. The packages, featuring Panasonic cards, will be available starting in November with films such as Pirates of the Caribbean & National Treasure and will set Japanese consumers back about $51 (ouch) ...which is $11 more than than a typical DVD (I assume/hope they mean Blu-ray). Disney envisions that the cards will primarily be used in mobile phones, portable media players and GPS devices (sounds dangerous). It will be very interesting to see what how much uptake Disney gets on this product and whether it sustains past the early adopter stage. Generally I like this idea, but always thought it would work better as a piracy mitigation strategy in markets like China (where pirated product owns the market).

Of course, this isn't the first time that full-length films have been put on flash memory cards. Most initiatives have surrounded handset promotions...like Motorola bundling Univeral's Bourne trilogy on a 1gb microSD with its Z10 handset to eventize its European launch. But codec companies, like Actimagine, ROK Entertainment & Mo-DV, as well as flash memory providers like Sandisk and Samsung, have been trying to convince the studios for years to compress movies on to cards as part of a bigger retail play. The most ambitious commercial initiative happened back in September 2005 when Sony Pictures Digital partnered with Carphone Warehouse to sell titles like Spiderman, Ghostbusters & Hitch through the handset retailer's British & French outlets on 256mb cards using Actimagine's codec. The quality of this product was very impressive (especially compared to other mobile playback options of the time). However the project ultimately failed because sales people in the hardware focused retailer didn't understand how to sell this entertainment product to the consumer, matching handsets to the right cards makes the shopping process a little klugy, the product didn't work with a lot of handsets, and...oh yeah, the cards were kinda expensive (like $50). Anyway, bundling is a great way to overcome these issues, if they can be sure that the cards will work with a very broad range of devices in the market. When we get to the point that every device with a microSD slot can play a movie file in one standard format, I think there's an opportunity for a scalable standalone business...particularly as the price of flash memory continues to plummet.