2 Music Companies Primed For Success

Record labels have had to change their business model over the years from a cassette tape and compact disc focus to a digital focus in the new millennium. The retail music business has suffered but others such as Apple’s (AAPL) iTunes and Amazon.com’s (AMZN) MP3 store have benefitted. The digital age also created an opening for new companies to step in such as Xumanii (XUII), which streams live music events. Still others in the music business have only seen a subtle shift in their businesses such as Live Nation Entertainment (LYV), primarily a live events outfit. I will focus here on the latter two companies.

Live Nation Entertainment is the world’s leading live entertainment and ecommerce company, comprised of four market leaders: Ticketmaster.com, Live Nation Concerts, Artist Nation and Live Nation Network. Ticketmaster.com is the global event ticketing leader and one of the world’s top five ecommerce sites, with a database of over 119 million fans who visit our sites.

Live Nation Concerts produces 22,000 shows annually for more than 2,300 artists globally. Artist Nation is the world’s top artist management company, representing over 200 artists. These businesses power Live Nation Network, the leading provider of entertainment marketing solutions, enabling nearly 800 advertisers to tap into the 250 million consumers Live Nation delivers annually through its live event and digital platforms.

Although the company hasn’t been profitable in each of the last 3 years, that hasn’t stopped investors from bidding up the shares. The shares have gone from $9 to nearly $14 over the course of the first four and half months of 2013. The financial results haven’t been far behind as can be seen in the Q1 release and the market clearly recognized that by boosting the shares 5% immediately following the announcement. The headline of the announcement was a 4 cent beat on the bottom line.

The company had this to say following the positive surprise:

“We are pleased with our first quarter revenue growth of 6% as compared to last year, driven by a 12% increase in concert attendance. This good start to the year reaffirms the strength and stability of our platforms heading into 2013, and through April 2013, our concert ticket sales for all events this year are up 26% and Ticketmaster ticket counts for events in 2013 are up 8% relative to this point last year… These ticket volumes, along with the progress on our strategic initiatives across Concerts, Sponsorship & Advertising and Ticketing give us even greater confidence we will deliver our overall growth plans for 2013."

In addition to the improving financial results, the stock momentum clearly on the long side, the company also has strong corporate backing with one of the biggest holders of the shares being Liberty Media (LMCA), which purchased more shares in the company just two months ago. The trends on ticket pricing also are going in a favorable direction. Over the 2001-2010 time period, revenue from the top 50 tours in North America grew 40%, mainly due to a 39% increase in average ticket prices.

Xumaniiis an all-inclusive online platform that provides users the opportunity to create a "Live Broadcast" in true High Definition. Xumanii's new, patent pending technology integrates proprietary hardware and software wirelessly, streaming live feeds from multiple cameras in High Definition Audio/Visual with capabilities of up to 10 megabites per seconds. This technology integrated Hardware and Software allows for the highest quality "live broadcast" without the exorbitant expenditure of traditional methods currently used in the marketplace via the respective Artist's Channel on Xumanii.com. The company's technology can also be provided to each Artist allowing them to broadcast any event in which they feel that they would like their fans to be a part of.

Xumanii has been following a similar formula as Live Nation, by signing artists. Just this month, the company came to terms with two of the most well-known artists in hip hop. The first agreement came on May 13 when the company announced that they will host PUSHA-T LIVE on their proprietary live streaming broadcast platform located at www.xumanii.com. Xumanii and Pusha-T recently signed a 2-year Agreement, which includes four concert events over the next two years. Pusha-T is affiliated with Kanye West, who is one of the most popular artists in all of hip hop.

The second announcement came on May 16 when Xumanii announced that it signed International Music Superstar Akon. This event is scheduled to be Broadcasted Live on Saturday May 25th 2013 exclusively on Xumanii.com.Akon is accredited the world record of having the highest number of guest appearances in songs with over three hundred collaborating with Artists such as Michael Jackson, Lady Gaga, Quincy Jones, Eminem and Whitney Houston to name a few.

Xumanii seems to like the people associated with Kayne West and has continued to dip into Kanye’s talent pool. On May 15, the company appointed John "Monopoly" Johnson, one of the most successful and well-known hip-hop talent scouts,as Artist Manager. Most in the industry know him for the ultra-successful career launch and co-management of Superstar Entertainer Kanye West from 1991 to 2008.

Xumanii has been in the midst of a publicity battle with private citizen, George Sharp, taking the lead role. In a press release documenting his lawsuit filing in the in the San Diego County Division of California Superior Court, he discussed Xumanii’s stock, which has no role in the lawsuit. He “expressed concern” for investors in Xumanii’s stock, even though the company’s prospects are looking brighter and brighter everyday with new talent coming on board. He also alleged that North Springs Resources, which traded under the ticker NSRS, and Superior Venture Corp, which traded under the ticker SVEN, were issued Crease Trading Orders by the SEC but both of them are listed, never got halted, and are actively traded. There also are rumors of him posting false Tweets and then deleting his tweets before the public figures out his agenda. His twitter account can be found here.

It doesn’t look like this is Sharp’s first time on the roller coaster either. The Stock Market Watch reported in 2011 this:

“Bottom line is we think George Sharp was either short himself millions of shares or teamed up with the short sellers to release this bullshit `news`, and smack the company down to almost nothing… Why would someone panic when faced with unfounded information. These guys just stole so much money from AMWI holders it`s not even funny. If you lost money yesterday you can clearly blame this George Sharp guy, and you may want to go have a chat with him in San Diego. This guy is a serial manipulator...”

Once Xumanii is able ride out this rough patch of publicity, things should be full steam ahead for the music company.