EVR Holdings: turning virtual insanity into virtual reality

_{(Source: Statista, figures are rounded)}

The fact EVR and MelodyVR have not only developed their own technology but struck the major deals needed to gain access to artists and then coincided their own launch with that of Facebook is nothing short of impressive. This has been because it has stayed ahead of the curve, with the quality of its content running ahead of the quality of the hardware.

EVR Holdings and MelodyVR: partnerships that anyone would envy

MelodyVR’s job is to create or stream content that customers want to watch. But in order to gain access to the musicians that are at the heart of its productions MelodyVR has had to knock on the doors of the world’s three biggest record companies to have any hope of surviving, with Warner Music, Universal Music and Sony Music controlling the rights to the majority of the world’s biggest music superstars. When MelodyVR had returned it not only had access to the libraries of the world’s record giants but a possible investment from all three on the cards.

MelodyVR struck essentially the same deal with all three record companies that allowed it to record performances of their artists and distribute them through its app, giving all three the option to buy 43.2 million shares in EVR over a five-year period. However, the company also leveraged the growing interest in its platform and showed it is more than capable of negotiating at the big boys table. Warner Music was the first to sign a deal with MelodyVR and secured the option to invest in EVR for just 4.25p per share, whereas Universal Music would have to pay 12.375p and Sony 14.2p. 

It has struck a wave of other licensing deals to cover both the US and Europe, including what it believes to be the first agreement ‘to license a virtual reality music service’. Agreements have been signed with Jay-Z’s Roc Nation, Warner/Chappel, and the Anglo-American Rights European Service Agency, to name a few. 

Elsewhere, MelodyVR has secured other invaluable partnerships to ensure the distribution of its content can reach its full potential. This has been spearheaded by the deal signed with Microsoft in 2016, which saw the MelodyVR app rolled-out on to all Windows Mixed Reality devices and valuable technical expertise and funding from the world’s largest software company. 

The joint-launch of the MelodyVR app with Facebook’s new headset is a further demonstration of how the London-listed company is becoming the content partner of choice for the biggest manufacturers. For example, one of its first deals was signed with Telefonica to use a ‘lite’ version of the MelodyVR app in demonstrations of the Samsung Gear VR headset that were sold in stores across Germany. The app has also been included in the marketing of various headsets, and Facebook include the MelodyVR app in its entertainment bundle to put it alongside kingpins like Netflix. 

This all enforces the idea to the consumer that the headset, whichever one they purchase, and the app goes hand-in-hand.

EVR Holdings delivers reliable and consistent progress to shareholders

Like many revolutionary tech firms EVR’s next job is to prove it can be profitable. The £20 million equity raise it conducted in May, coinciding with the launch of the app, was the biggest fundraise to date but the issue price of 16p was also the highest it has demanded, and double the last placing price of 8p. Overall, EVR has raised over £40 million in the past three years and has grown the company from a market cap of just £3 million to one fast-approaching £150 million.

Shareholders have already have had much to cheer as the launch of the app means the company is now officially generating revenue, but they will be keen to discover exactly how much consumers are willing to spend on MelodyVR’s library. Considering its ambitions to stream live events to enormous worldwide audiences, spending on research and development will have to remain a high priority and the next thing investors will be keen to see is how far away EVR is to balancing its books and becoming self-sufficient in terms of funding and cash flow.

EVR Holdings shares rocket as MelodyVR app is launched

EVR Holdings shares climbed to an all-time high of 18p around the launch of the MelodyVR app, before giving back most of the gains it had achieved over the previous couple of months.

EVR Holdings: could MelodyVR be a takeover target?

With the world’s leading technology companies now knocking at MelodyVR’s door for the vital content needed for their newly launched headsets, and the largest record companies eager to jump on what might just be the next big thing for the music industry, EVR’s biggest challenge may be to stay independent and getting the time it needs to grow.

Striking deals with such a wide variety of market players and avoiding tying down its service to one headset will help it prevent it being swallowed up and added to one of the tech giant’s VR divisions, and if one of its many partners or another player did decide to try to takeover EVR then you could bet your lucky star it would kick-start a bidding war. The list of potential bidders is long: it would be a natural addition for Spotify, and Amazon could probably find a place for it in its VR software division.

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Whether or not a takeover is on the cards and whether or not it would be in the best interests of the company and its shareholders is not known, but with tech giants willing to splash out on making similar high-tech, bolt-on acquisitions, EVR is likely to demand a pretty price should any offers be laid on the table.

Matchett and Hancock have both cashed in on their holdings over the past two years, each booking at least £5 million through two secondary placings, but they have both remained substantial shareholders in EVR. Matchett still holds a 13.1% stake while Hancock holds 10.2%, making them the company’s two largest individual shareholders.

EVR Holdings looks to ride ‘fourth wave’ in technology shift

‘Over the next few months, MelodyVR will begin to announce its launch schedule for additional VR devices, such as PlayStation VR and Google Daydream, as well as detailing our worldwide release plans for additional geographies throughout Europe, Asia and Latin America. We will also announce our first live concerts, which will enable music fans to purchase digital-tickets to sold-out real world events, in VR, via the MelodyVR platform,’ – Matchett, May 2018.

Allowing customers to download live performances by their favourite artists is one thing, but streaming live events could be a game-changer for the music industry. Live performances are a massive money maker for musicians and MelodyVR is allowing them to smash through the limitations set by stadium capacities. Ticket prices have soared over the past decade and getting your hands on the hottest tickets is proving more difficult than ever. Selling another way in to the gig at a considerably lower price seems like the perfect solution.

While MelodyVR is currently focused on producing music-related VR content its ambitions go much further as it explores new immersive technologies like interactive advertising and augmented reality. This is one key reason why any takeover of EVR at this early stage would be a shame, as it could stop the company finding its true potential and confine it to making VR music videos.

While the company has laid the perfect foundations to thrive as VR grows in popularity and becomes a vital tool for businesses, much of its immediate success is tied to the adoption by consumers for entertainment purposes and their appetite for 360 degree performances by their favourite artists. The uptake of VR has been slow so far and, while it will almost certainly accelerate, it will remain a slow-burner rather than explode like smartphones, regarded as the ‘third wave’ in technology.

Learn more about how to invest in VR technology