FilmDoo is an online video-on-demand (VOD) platform focused on helping people to discover and watch great films, short films and other content from around the world. Unlike other VOD platforms, FilmDoo focuses on building a thriving global film community and empowers users to drive social recommendations and to help bring a film to their region, many of which are festival award winning films that may not have received traditional mainstream distribution. In this way, we believe that FilmDoo is an innovative game changer, disrupting the way the traditional film distribution industry currently works by shifting the balance of power to end users to access content that they would be interested in viewing.
FilmDoo makes it easier, fun and more engaging for people to discover films they would otherwise not hear about while bring greater transparency and data analytics to the film industry.
Please note that whilst the campaign is labelled as EIS eligible, the company has the majority of its SEIS allowance remaining. We will therefore be looking to seek SEIS relief on the first £140,492.80 invested into the campaign and EIS relief on the balance. Any tax relief is dependent on personal circumstances and may be subject to change in the future.
Unlike other VOD platforms which rely on the traditional distribution system to distribute content, FilmDoo is able to source films directly from all levels of the film distribution chain from film makers through to sales agents and distributors. In doing so, users are able to discover films which FilmDoo are the first to bring to the region and to help discover emerging film talent.
FilmDoo is using our social community and recommendation algorithm to 'crowd-lift' content through user generated demand, thereby turning the traditional distribution system on its head. We believe our crowd-lifting technology will revolutionise the distribution of content from around the world by empowering users with timely knowledge and access to content they want to consume and to help with the distribution of these. This changes the traditional way content has been distributed and gives filmmakers from around the world a greater voice.
Not only are we making it faster and easier to help viewers discover and watch content they may not easily have found out about, to the film industry, FilmDoo also takes on the role similar to how accelerators are to help promote upcoming startups.
Substantial accomplishments to date
Broadly, our accomplishments to date are:
1. Platform launched in 2015 and our proprietary technology stack includes the front-end VOD platform, CMS, CRM and bespoke analytics system. FilmDoo is now globally accepting payments in 4 currencies with a mobile app due to go live later this year.
2. Seen month on month growth regularly exceed 30% in our visitors from 9,000 visitors in November to over 200,000 visitors in July 2016.
3. Over 22,000 returning visitors in July 2016.
4. Signed 50+ contracts with distributors, sales agents and studios.
5. We have over 1,400 films and short films available in the UK and have now expanded the platform globally.
6. We were also selected by the prestigious MassChallenge accelerator as a finalist for their UK program in 2015. Forbes picked FilmDoo as one of the top 5 start-ups graduating from Mass Challenge (out of a total of 90).
7. Secured £120,000 of investment to date.
8. Extensive press coverage in the Guardian, City AM, Variety and Screen Daily.
Our initial model is a B2C model where users pay for a film they watch on a transactional pay-per-view basis. At present, users can rent a film, with the average purchase price ranging from £1.99-£6.99. The price is dependent on a number of factors, with films released simultaneously in the cinema as a day-and-date release often priced at a premium. FilmDoo also offers short films for free, which shall soon be supported by advertising pre-rolls.
We offer a revenue split (typically 30% to 50% of net sales) with content owners and rarely pay for content in advance as we work with the content owners to promote their films and to assist with marketing. Cashflow for the content is positive as we receive immediate payment from users but pay content owners quarterly in arrears.
We are also launching a B2B arm of our business which shall aggregate content from around the world and supply it to broadcasters and telecommunication companies who are keen to acquire content. We have a contract signed with Ownzones to widen our distribution network and are negotiating a number of other contracts.This content shall either be shown as 'presented by FilmDoo or be available on a FilmDoo branded channel. The contract we have in place with FilmDoo provides distribution through a number of their channels which have around 65 million users.
We believe there is also great potential to make ancillary revenue from our B2B arm by selling data through the sales of aggregated data to third parties to provide transparency on film viewing and online habits and to charge for a service to help filmmakers and producers.
Use of proceeds
This seed round will help us work towards achieving important milestones from user growth to expanding our B2C offering and proving our B2B revenue model assumptions. 50% of the funds will be spent on tech and product development with the remaining 50% split between marketing and operations.
► Key aims include:
1. Finalising the development of a FilmDoo branded app launching on Android, iPhone and on Windows phones;
2. Implementing some of our innovative tech ideas to improve user functions;
3. Launching a wider marketing campaign; and
4. Further developing our B2B business.
► Our main milestones are to:
- Gain more user growth (from the current 150,000 visitors per month to at least 750,000 by year end 2016);
- Launch apps across multiple devices;
- Close at least two additional B2B partnerships;
- Launch our B2B revenue monetisation streams;
- Product development of new features for our main website.
Note: There is a convertible loan note for £50,000 that accrues interest at a rate of 7.5% per annum and has a 20% discount on conversion into equity on any raise which takes place over £300,000. The proceeds of investment will not be used for interest payments.
The entertainment industry is going through a substantial period of disruption as consumers find new ways to access content through a variety of devices and media. According to Digital TV Research, global Over The Top (OTT) TV and video revenues will reach $51.1 billion in 2020; a massive increase from the $4.2 billion recorded in 2010 and the $26.0 billion of 2015.
By 2019, 72 percent of all Internet video traffic will cross content delivery networks, up from 57 percent in 2014. The Video on Demand ("VOD") market is considered one of the fastest growing verticals with the VOD market expected to grow at a rate of 30% per year, overtaking cinema box office by 2017. In the UK alone, consumers will spend £1.31 billion on streaming and downloading in 2016 (23.7% more than 2015), compared to £956 million on DVDs (includes Blu-ray), a 16.3% decline to below the £1 billion mark for the first time since 1994.
Yet over 80% of global film revenue comes from just 6% of films. This is driven by marketing in-balance and the power of the 'Big Studios' to dominate the physical theatre and wider online distribution. We believe there is significant potential to promote the remaining 94% of content to a wider audience via VOD and targeted marketing. Furthermore, we believe that there is huge potential to widen the distribution of European content as at present only 10% of European language content is shown outside the EU.
Within Europe the content struggles especially hard to get a wider audience online outside its home territory. Only approximately 47% of European films exhibited in cinemas between 2005 and 2014 were made available on VOD by the end of 2015, compared with 87% in the case of American films. This leaves an opportunity for targeted platforms, such as FilmDoo, to work closely with the principal rights holders to give a wider exposure to such content and to be the first truly global platform to reach international audiences.
Characteristics of target market
According to figures provided by the BFI, in the UK alone total spending on documentary, international and independent films was £1.153 billion in 2014. FilmDoo is initially targeting those identified as those who watch films outside their own culture, which is estimated to be around 6.5m in the UK, 2.8m in Australia and 32m in the USA, highlighting an unfulfilled but valuable growing niche market for FilmDoo. Once FilmDoo expands into content beyond films (e.g. shorts and TV) and also cater to ethnic communities, these global markets become significantly larger.
FilmDoo's target market is clearly defined, individuals who watch international films, are aged 20-45, university educated, English speaking, have higher than average disposable incomes and love to travel. Additional segments targeted by FilmDoo include ethnic groups and specialist segmented communities, such as the LGBT community and film school students, which are significant on a global scale.
FilmDoo has a diverse strategy for reaching its market that can be divided into the following key categories:
1. SEO - FilmDoo has demonstrated significant capability, through it proprietary technology, to rank highly for a number of key organic search terms. FilmDoo is currently ranked in the first three search results for a number of key search terms predominantly in the LGBT, Asian and Italian film search terms, which is currently driving significant traffic.
2. Referral Programs - FilmDoo is rolling out an affiliate program, which already includes FilmDebate, MoviesOverTheRainbow and Vodzilla. Building an affiliate program we expect will also assist with improving our SEO rankings further.
3. Partnerships - FilmDoo aims to partner with organisations who share our target demographics to connect to their networks.
4. PR and content marketing - FilmDoo will leverage PR to raise our profile. This will be assisted by content marketing to be seen as being thought leaders and which should also improve our SEO rankings.
5. Social Media - FilmDoo is growing its social media presence (FB, Twitter, Pinterest, Instagram) to promote our brand to a wider audience. FilmDoo intends to also work with filmmakers and actors as influencers to leverage their own social media following as and when we release their films. FilmDoo will also try to develop viral videos to drive brand awareness.
6. Events - FilmDoo already presents at a number of films festivals and events including Cannes Film Festival, Raindance and Edinburgh Film Festival. FilmDoo intends to increase the number of events it presents at. FilmDoo also intends to speak at universities and film schools.
7. Gamification - FilmDoo's new website design, to be launched over the coming months, utilises a number of principles from the games industry to promote user loyalty and referrals.
8. Working with ethnic & community groups - FilmDoo will aim to work with community and language groups to promote language specific content to their communities.
The VOD is a fast growing market with a number of competitors established including Netflix, iTunes, Amazon Prime, Mubi, Fandor and others. Whilst Netflix, iTunes and Amazon Prime are certainly competitors, their focus is on the mass market.
Whilst Mubi and Fandor are more direct competitors, FilmDoo is differentiated to them and other similar platforms through having a focus on international and independent mass market, with a particular emphasis on leveraging community and curation.
We aim to compete through some of the following:
1. Unique content - Over two years, through our long developed relationships with filmmakers, sales agents and distributors, we will focus on gaining access to content on an exclusive basis, which will make it harder for other competitors to acquire this content and to provide a strong foundation for us to differentiate from other players and to appeal to users.
2. Product differentiation - We believe that our site is different to every other VOD platform in the market and we have a number of innovative ideas to stand apart from every other competitor in the market.
3. Community focus - As FilmDoo also has a strong social community focus, we believe this will increase the stickiness of users compare to other sites.
4. Tech focus - We have achieved significant growth in recent months driven by a very successful SEO campaign. We are further rolling out our SEO to include wider terms.
5. A great team with strong governance and lean operations.
6. Truly international platform - We have launched globally and now have active users from over 125 countries, which makes the platform one of the first truly global transactional platforms offering content in a variety of languages to a global audience.