Progress for FargoTube business

Posted: July 22, 2010 by chrisbagley in F3 Technologies, FargoTube, Uncategorized
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F3′s sales team is back from a productive trip to Music City USA and preparing for yet another Nashville trip, its fourth in two months.

Wednesday, Thursday and Friday were busy for Paul Campbell, our chief operating officer; and Stephanie Miller, our SVP of business development. They met with a talent-management agency, a public-relations firm, a large music-licensing firm, and a couple of country musicians who have become television stars.

We expect some of these meetings to have indirect but very important results for our FargoTube entertainment service. The licensing agency, essentially a group of sleuths that track down unlicensed use of songs, could eventually give FargoTube enormous credibility as a force for the rights of musicians and other content owners, who are trying to break their addiction to free online distribution.

“A lot of things we’re doing are not just short-term,” Paul said. “They’re things we’re doing to ensure that the site has longevity. Everything we do as a company is about getting to the point where we have sustainability.”

With some of the other meetings, the goal is a partnership where the content owner makes FargoTube a key part of distribution strategy. After signing Strange Celebrity Entertainment, LLC, and its country musicians last month, we’re aiming for a second major content partner. We expect that to happen soon because we’ve drawn a lot of interest from a lot of different content owners, who range from Nashville musicians to producers of instructional videos.

The sales process is a bit like planting a tree and waiting for it to bear fruit, even for the discussions with content partners and potential content partners. For one thing, FargoTube is pioneering a new business model that content owners are only beginning to understand. Artists have been using their online presence mainly to promote their concert tours and sales of physical albums, and the costs of such promotion are often larger than the revenue they generate. And while free music videos have helped generate advertising revenue and have probably aided in the sales of digitial music files through third-party websites such as iTunes, those two sources have replaced only a fraction of the loss from declining CD sales. In short, online distribution hasn’t been a smashing success, so content owners are having to become more judicious in how they fit the internet into their business models. F3 Technologies is working with them to ensure that FargoTube is the online source of the future.

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