Archive for January, 2011

Company Update

Posted: January 24, 2011 by f3technologies in F3 Technologies, Uncategorized
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In response to questions that we have received from shareholders over the last few days, F3 remains focused on executing against our business plan and strategies for 2011.

We are extremely excited about how our innovative products and partnerships help independent artists in creating sustainable careers and cities in improving communication with their residents to combat crime.

Our partnerships with Consolidated Independent, Music2Q and Ditto Music are all important relationships to help us expand awareness of FargoTube, build a significant catalogue of content and provide important connections for artists. In addition, our participation in the 2011 SXSW Conference in Austin, Texas, will be a key milestone for the company and we look forward to demonstrating FargoTube to a large film and music audience.

We thank you for your support of F3!

Frank Connor
CEO

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F3 investors and readers have this blog have posed several good questions about Interaction Community Systems this week, so I’ll take a crack at answering them here.

We’ve continued to add new communities to ICS at a pace comparable to the modest pace we saw through 2009 and early 2010. Our current sales pipeline leads us to believe that this pace will continue for the next couple of months.

We believe the pace will pick up substantially this year after we introduce automation that makes registration easier and faster for individual communities and even property management companies with multiple communities. We’re on track to complete the automation and have it active by early February.

When the automation is active, we plan to beef up marketing for ICS, with a particular focus on direct marketing to property managers. One aspect of the update will let ICS users select communications and accounting modules. This will mean additional flexibility for our clients, more clients, and more revenue for F3 Technologies.

Investor relations firm

Posted: January 21, 2011 by chrisbagley in F3 Technologies, Uncategorized
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A couple of you have asked about the state of F3’s investor-relations representation. Our contract with Houston-based SmallCap Support Services is drawing to a close and we’re in the process of engaging the Shareholder Development Group, which is located here in the Atlanta area. We will give you more details as they become available.

In the meantime, you may have noticed that SDG has hit the ground running with this audio interview of F3 chief executive Frank V. Connor.

A regular reader asked us yesterday about F3’s three main platforms — Interaction Community Systems, FargoTube and the Interactive Defense System — and how we’re dividing our resources among them. It was a good question, so I’m posting the answer here.

While we continue to update and refine all three periodically, we have been putting somewhat more time into FargoTube and IDS than into ICS because the first two are new platforms and we’ve made a point of getting them up to speed. Furthermore, we believe these two are cutting-edge platforms. The markets for them are brand-new, with significant upsides, so it has been important to move quickly.

In contrast, Interaction Community Systems is one of several online management platforms for homeowners associations and other membership groups, and the relatively saturated state of that market may moderate ICS’s potential for growth.

Nonetheless, we believe ICS has significant advantages over its competitors, including the integrated nature of its accounting, paymenting, communications and management functions; and lower price points. These strengths make ICS an especially useful platform for property managers who want to manage and interact with their various communities efficiently. For this reason and because property managers have lower acquisition costs per dollar of revenue, we have been focusing more heavily on selling to property managers than to individual communities.

Additionally, we believe ICS is benefiting indirectly from our new focus on the IDS platform. IDS’s adoption by a city or law-enforcement agency acclimates residents of that city to an interface that is very similar to that of ICS. The two platforms can be linked quite easily in areas where community associations and public-safety agencies are using them.

In a recent telephone interview, F3 Technologies founder and chief executive Frank Connor recently gave Tony Goldman an overview of FargoTube, the Interactive Defense System, Interaction Community Systems and the company the company as a whole. Tony Goldman is chief executive of the Shareholder Development Group, the investor relations firm that F3 recently engaged.

I highly recommend this interview, particularly for those of you who, like I, have gotten focused on the details of our individual platforms. Tony is only now discovering our platforms, so he focused on hitting the high points with Frank.

One highlight for me was hearing Frank’s pithy description of FargoTube, because it can be difficult to give explain such a unique platform within the nascent online-music industry.

“We like to describe FargoTube as having the functionality of YouTube with the monetization of iTunes (and) with the customizability of MySpace all the while supporting the monetization of both music and video.”

Click here to listen to interview, which is streaming on FargoTube.

As noted separately in a press release this morning, FargoTube and Music2Q, a service that connects independent musicians with potential licensees in the film, television and video-game industries, are launching a strategic partnership.

This is important both for FargoTube and for the independent music community because Music2Q, like FargoTube, represents a growing revenue segment at a time when traditional revenue streams are narrowing.  In this new environment, musicians have to be scrappier and more business-savvy. Helping them reach new fans and generate income in this environment are fundamental goals for both of our companies. Joining forces allows FargoTube artists to tap into the lucrative business of licensing music for movies, television and electronic games.

Some specifics of our partnership:

  • A free subscription to the www.music2q.com website, valued at $120, to be awarded to a randomly selected finalist at each Open Mic Monday held at Eddie’s Attic, the Atlanta area’s top venue for singer-songwriters and acoustic music;
  • Discounted subscription rates to Music2Q for all musicians using the FargoTube platform; includes a revenue-sharing arrangement for all business driven through FargoTube.
  • Music2Q becoming an affiliate to assist FargoTube in expanding into the film industry by leveraging its numerous connections.

As you probably know by now, FargoTube gives independent artists their first opportunity to profit directly from their creative works in the setting of a social network. Musicians, filmmakers, remote instructors and other artists can upload their content free of charge and then make it available on a per-view, per-media file and/or subscription basis, setting prices and receiving 70 percent of the resulting revenue.

As new artists continue to join our FargoTube video/entertainment service, F3 Technologies is developing a range of service offerings and a pricing structure that we believe will maximize FargoTube’s value for the artists, for the end users and for F3’s bottom line. We believe it’s especially important to standardize these levels of service in light of the growing influx of users we expect from a range of sources including the content-sharing agreement we recently signed with Ditto Music.

We realize that artists’ needs from FargoTube vary quite a bit, so we’re making the service flexible and accommodating for them. For now, four levels of service are shaping up:

1) As we’ve discussed all along, a content owner is able to upload one or more individual videos or music tracks, which users find through browsing, keyword searches, or suggestions from the system. The content owner pays nothing and receives 70 percent of the revenue generated through downloads and streaming.

2) Tools on the system have allowed and will continue to allow content owners to create their own “tubes” — fan sites — branded with personalized graphics and photos, and including biographical and contact information and social-networking features. These content owners also pay nothing and receive 70 percent of the revenue generated through downloads and streaming and 90 percent of the revenue from sales of any physical goods, such as DVDs or t-shirts, that the tube owner sells (owners themselves are responsible for fulfilling orders).

3) For an additional monthly fee, F3 creates and manages a branded, semi-custom tube for the content owner on the FargoTube platform. Singer-songwriter Anthony Snape’s tube is a good example of this.

The content owner receives 70 percent of the revenue generated through downloads and streaming and 90 percent of the revenue from sale of physical goods. F3 expects to charge $25 a month over the first year for this level of customization.

4) F3 also custom-designs websites for content owners who desire them, leveraging its design and development capabilities in combination with the FargoTube platform. You may have noticed the clean, colorful and dynamic sites that we designed for singer-songwriter Coles Whalen and author/television personality C.J. Miller and the site we’re developing for the Severe Records label and its 30 acts. They’re powered by F3’s Ascend Global Business System of content management, which allows content owners to add, alter and manage the videos and music on their own tubes and websites easily. It may not be immediately apparent that one of these sites runs on FargoTube; the two do, however, run on the same “back end” programming, and they can be hyperlinked so that a user on one of the sites can easily click to and from FargoTube’s “general tube,” its aggregated pool of content.

As with other levels of service, we will share 70 percent of revenue with content owners and 90 percent of the revenue from sale of physical goods. F3 expects to charge $250 to $400 a month over the first year for this super-premium level of customization and service, a total price of $3,000 to $4,800 that is highly competitive in the web-design market and spread over a full year to accomodate the independent artists who constitute a key market for FargoTube.

This post has been updated to include information on physical goods sold via FargoTube and the relationship between FargoTube and the web sites of top-level clients.