The Market

Over 800 million cell phones were sold in 2005. There are 1.5 billion cell phones deployed in the world as of mid year 2005 and the cell phone is the most common consumer electronics device in history. The global ringtone market (currently the most profitable mobile content) was $5B in 2005, with the US garnering 10%. The ringtone market alone will be $15 billion in 2010. By 2007, 40 to 50% of all cell phones will be capable of supporting full track downloads of music, and there is no reason to believe the market for full track music will not follow the same market trends.

The long tail of the music industry is long and growing longer. A full 25% of music sales worldwide are from independents (non-major labels). Research indicates that this percentage is higher where the economy is more fluid, such as peer-to-peer file sharing networks, indicating a large and growing demand for niche music.

The content creators or artists live in very different worlds depending upon their popularity, with the most popular getting a seat at the table with a large label partner. The large label partner in turn partners with a large aggregator and/or provisioning company, who then partners with a large carrier. Each of these bespoke partnerships requires unique relationships forged for this specific distribution arrangement, causing market inefficiencies. As the size or popularity of the artist goes down, so goes their ability to get a seat at the table. This unnatural and inefficient stratification of the market has left many content providers, principally the smaller independents, with few options for selling to the mobile market.

While mobile content today primarily consists of ringtones, wallpapers, and games, this will not always be the case. Full-track downloads of music have already begun to appear, and streaming video is in its nascent stages on cell phones. While feature-length movies are unlikely to see success in the mobile space in the foreseeable future, more appropriate formats, such as short mobisodes and news clips, will become main stream later in this decade.

Myxer™ is attacking the independent music market by leveraging the unique and viral nature of the revolutionary MyxerTags™ technology. Independent musicians use MyxerTags™ to drive their ringtones and wallpapers through the Myxer™ Platform. This allows them to make their stuff available to their fans from their MySpace pages or websites. It also allows for that content to be made available to users at www.myxertones.com, our consumer facing website. Each new MyxerTag™ that is deployed increases the content that is available in the MyxerTones™ content catalog so MyxerTones™ leverages all the independent musicians pushing their fans to the MyxerTones™ site. MyxerTags™ acts as a virtual fishing net being dragged across the web with the fish landing at the MyxerTones™ site. Our strategy is all about driving consumer adoption of MyxerTones™ through the use of MyxerTags™.