PHILADELPHIA, Dec. 19, 2006 (PRIME NEWSWIRE) -- RMD Entertainment Group (Pink Sheets:RMDG) releases shareholder letter from CEO.
It is a pleasure to address the shareholders in my first end of year letter to detail the current state-of-the corporation for RMD Entertainment Group.
My ultimate intent for this letter is to ease frustration with the share price and perhaps, suggest that the current share price is an anomaly rather than cause for concern.
It has been a very busy year for my staff and me. Through our hard work and will to succeed we have been able to see the company successfully complete a total management transition, complete a company turnaround, and facilitate an absolute change in business focus.
Once we completed the aforementioned tasks, we then had to answer the challenge of assembling a competitive catalogue, planning our release schedule, working with our distributors to get our products in stores and on digital retail points of purchase, and promoting our products to the public.
I will say unequivocally, that we have successfully met and completed each of the responsibilities that were presented to us in less than 12 months! In laymen's terms, we have built a significant company from nothing in one year. Each day of the year we built the company's foundation up in a sensible strategic manner. Management remained committed to staying the course on our strategic plan and it paid off handsomely. We now have a living, functioning company that has a global reach for its extensive urban media catalogue and music releases. It makes me feel very proud to say RMDG is poised for success for many years to come.
I would now like to detail our progress in key areas of the corporation and then follow that with a look at 2007.
1. Paying Debt left From Sciax Regime
When the current management team took the reigns of RMDG over we were immediately charged with the chore of "cleaning up" the almost overwhelming debt left behind from the former regime. We immediately restructured the capitol of the company and paid off significant debts, adding up to hundreds of thousands of dollars. In my estimation, we have paid off over 75 to 80 percent of RMDG debts and fully expect to have all outstanding obligations paid in full by the end of 2007 without putting a major strain on the working capitol of the company.
2. Music and Video Catalogue Assembly for 2007
In 2006 RMDG acquired the rights to the following content for sale and distribution globally.
1. Roc Monee (Three Albums)
2. Big Kuntree (Three Albums)
3. Texas Beach Party feat Mike Jones and Chamillionaire
4. Blockstar DVD (4 Times a Year)
5. Rayshon (Sul Sol Entertainment)
6. Big John (Sul Sol Entertainment)
7. Heff (Sul Sol Entertainment)
8. Pickwick Group *see below
9. RHN **see below
Notes --
* We announced previously that we were in the final stages of discussion for distributing key catalogue titles in the North American market for the Pickwick Group. This unexpected delay in execution is in no way alarming. I have been in communication with Pickwick Executive George Ebenezer this week and we both expressed an interest in completing the deal soon so we can slate some space for them in our North American schedule 2007.
** In 2006, RMDG signed an agreement to redistribute and rebroadcast the live signal and content of The Real Hip Hop Network (RHN) on mobile phones and PDAs through RMDG subsidiary MOTV, Inc. Both companies expect this to be up and running in the first quarter of 2007 notwithstanding any unforeseen technical issues.
3. Initial Music Product Launch on Digital Platform
RMDG artist Roc Monee's debut album "Diamond in the Rough" was our first music release launched on our global digital music/ring-tone distribution platform with encouraging results. Our first single release off of the album was picked up by over 60 digital retailers world wide and we sold over 5000 downloads in the first 30 days with minimal promotion. (There were too many companies to name here but a full list is available by request from Mark Davis, email md@rmd-entertainment.com). This feedback was very encouraging for us. It has been our feeling that RMDG will eventually make more revenue from our vast digital partners than we will in the traditional brick and mortar retail outlets where we sell traditional compact discs.
4. Initial Music Product Launch in Bricks and Mortar Platform
While we were encouraged by the digital platform music launch of "Diamond in the Rough" we also recognize the importance of the Bricks and Mortar platform as well. Traditionally, this has been the main vein of revenue through the years for all record labels and we still see this as roughly half of our revenue from music content sales. We faced several major hurdles when it came to Roc's debut album release in stores. First, we released the album in the fourth quarter which is traditionally the most competitive time of the year when it comes to retail chain space on racks for product. Second, he is a brand new artist so we had to bang our own doors down so to speak.
When the album was released in North America via Bungalo/Universal the retailers purchased a very limited quantity for stores to have on hand and a larger quantity to keep for retail sales within their online stores. When Roc began getting substantial sales numbers online and selling out the limited initial orders that were shipped in stores the ordering cycle changed and became more aggressive. At this point I wanted to make sure that RMDG could forge a mutually productive relationship directly with the retail chains instead of counting on our distributor, Universal Music (by way of Bungalo Records), who is the largest music company on the planet, doing it for us. I immediately employed someone to call all the retail outlet stores of chains that are serviced by our distributor to check on orders by each location and build a relationship on the store manager level that would translate into more orders. We then passed the information back to the distributor and things began to change for the better. Stores that ordered 5 copies began ordering 20 copies and companies like Trans World (FYE and Coconuts) began national awareness programs for the album and began carrying it in almost every store. We are now working closely with Coconuts, FYE, and most recently Borders on Roc's album and continue to build an impressive relationship that we feel will be invaluable for us with each impressive national chain. I made the decision to begin the advertising schedule for radio and cable for Roc's album right after Christmas. In store appearances and promotional tours had to follow suit as well. The decision was strictly based on economics. It would have cost the company approximately 10 to 15 times the amount of money to do the same promotion during the holiday season than it will beginning on December 26th. Consequently, we made the decision to do major adds to radio rotation in key markets at the same time.
In order to maximize the revenue streams of the Bricks and Mortar platform we needed to have CDs in stock at stores, advertising on radio and TV, Roc in stores and in concert, and radio and video airplay. We have everything in place now for a large radio push in major markets to coincide with our advertising on radio and television in key markets. Fred Rollins has recently met with a top three concert and tour promoter specializing in Hip-Hop that is very interested in doing the bookings for Roc on an exclusive basis. This company has worked with the likes of the Ying Yang Twins and Funk Master Flex.
We feel confident that we have deployed an aggressive program for the Brick and Mortar platform and have employed the skills of the top radio promotion, street promotion, and radio advertising professionals in the industry. Each has had numerous successes in their careers and a proven track record.
While the music buying public can be fickle, we have received indications that we will be more than satisfied with the revenue yield from this album and remain encouraged about our 6 upcoming titles in 2007. Look for a bi-weekly update on Roc's album right after the new-year via PR.
Our release schedule with Pickwick will begin in 2007. After consulting with Pickwick executives it was agreed that we should release Roc's album in Europe at the end of January/early February for the best chance at success. The general consensus was that we should position his album very carefully in that market because it has so much potential for financial success.
5. Initial Video Product Launch Google Video and MOTV, Inc.
RMDG has assembled what we think is one of the most prolific urban media video catalogues in existence. It is comprised of original content from RHN and our subsidiary MOTV, Inc. as well as current Hip-Hop videos and exclusive video interviews with the biggest stars in the industry courtesy of Blockstar DVD magazine and Hip-Hop 2Night with Jay Milla.
With an impressive catalogue in hand we searched out and found key distributors of Video content such as Google Video. We originally signed a content deal with Clayton Entertainment that allowed us to place our content on Google Video but I was not satisfied with the speed of their services in terms of uploading content to Google Video on our behalf. As a result, I cancelled our contract with Clayton Entertainment for non-performance and RMDG contracted directly with Google Video.
Within the last twenty days we have placed over 300 pieces of unique content on Google Video and YouTube under the MOTV and RMDG branding. RMDG content on YouTube has performed extremely well, being ranked in the top viewed category consistently since its launch just over a week ago. This is very encouraging as Google is finalizing its advertising program for content partners currently and is tentatively slated to begin selling advertising for each piece of content that is posted on its massive site that has over 350,000,000 unique visitors a day after the holiday season. In our deal terms, RMDG and Google will split all ad revenues generated by Google selling ads for each unique piece of content. AOL runs a similar program now and management is definitely targeting them as key partners in our video content business in 2007 as well. RMDG has been offered a content deal with AOL through a third party already but it is my preference to deal directly so that we can build the proper relationship. I am confident I will get that done.
The opportunity for advertising revenue for RMDG is limitless if we can position ourselves correctly within the digital world. Having our content available for view on Google Video and potentially through AOL very soon puts us at the front of the pack when it comes to realizing large scale ad revenue opportunities for the company from an on demand environment on the web. It is my goal to have RMDG subsidiary MOTV, Inc. become the premier leader in this new and exciting arena for business.
In addition to attracting advertising dollars from the vast digital content we are also exploring the opportunities to sell and license it for additional profit.
Currently, we entered into discussions with one of our key content aggregators to sell RMDG content on iTunes. These discussions have moved quite quickly. We have been asked to compile a sample grouping of content for review right after the holidays, at which time we will collectively determine what is the most effective way to sell and market content on iTunes. We appreciate our current relationship with iTunes and look forward to continued success with our expanding music catalogue and selling our video catalogue through their superior services as well.
Other opportunities are being explored directly with mobile carriers that we currently market and sell our music catalogue to. This list includes the who's who of cellular service -- T-Mobile, Verizon, Sprint, Telnor in Norway and Orange of the United Kingdom.
6. Mobile Broadcast of RHN through MOTV, Inc.
In working with some top executives and consultants on an overview of RMDG's initiatives, the mobile broadcast of RHN to cell phones and PDAs has caught a lot of attention. One person in the meeting remarked, "There is nothing more Hip-Hop than a cell phone." In one sense they were correct; in another they were mistaken. There is one thing more Hip-Hop than a cell phone and that is RHN itself. Put the two together and we have the ability to reach people all over the planet with content that reaches the hottest demographic on Madison Avenue -- the 18 to 34 Hip-Hop consumer.
This will be a pay subscription service that is compatible with every mobile carrier world wide. The only qualification for the subscriber is that they have a Windows Media, QuickTime, or Real Player installed on their device. The broadcast subscription service will be marketed to the over 33,000,000 viewers of RHN as of Jan 1st initially and other territories will follow. MOTV, Inc. broadcast is also compatible with laptops and PCs through traditional internet connections.
7. Closing Statements
As we close out this year and begin to compile the numbers from our sales from the end of August through December, I want you to truly understand how far we have come as a company in this short year's time. We have earned the right to compete in a 70 billion dollar a year industry. We have earned the right to sell our products around the world with over 60 distribution partners that are considered the best at what they do in their industry. We have earned the right to be trailblazers in urban media content delivery and will continue to exploit and blur the line between technology and hip-hop for substantial gains in revenue. And most importantly, we have earned the right to reap the harvest in 2007 that we have planted through our hard work and dedication to the company and the shareholders of RMDG. Building a foundation from nothing is not an easy thing to do but we have succeeded in building a machine that can and will manufacture the payoff we all deserve. Your support has not gone unnoticed by our management team at RMDG. We thank you all and look forward to an outstanding 2007. Happy Holidays and God Bless us all.
Sincerely, Giorgio C Costonis CEO RMDG "Where Hip Hop Meets Wall Street"
About RMD Entertainment Group
RMD Entertainment (RMD) is a cutting-edge entertainment company that is primarily focused on the development and international marketing of hip-hop' music, including compact discs, digital downloads, and personal ring tones for mobile phone customers, as well as other hip-hop lifestyle products. The Company has also created MOTV, the ability to stream video content to mobile devices, including cell phones and PDAs. The Company current possesses an impressive hip-hop catalogue, which it distributes exclusively through Bungalo Records and Universal Music Group (a subsidiary of Vivendi Universal) in North America and in Europe through the Pickwick Group Ltd. of London.
The RMD Entertainment Group logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3149