Backstageplay Inc (CVE:BP) (FRA:DOZB) CEO Scott White provides an update on the company’s recent developments including prospective additions to its gamification lineup from the sports world and among internet influencers. Backstageplay Inc has also added additional music acts to its lineup, including Wayne Thompson and Jory Boy. White provides details on an emerging Backstageplay affiliate model with an established music brand operating casinos and restaurants in the recreational market. Backstageplay is currently targeting intermediate-sized acts to increase the company’s cash flow and build its reputation as the premier source of music industry gamification.
James West: Hey, welcome back. My guest this segment is Scott White, CEO of Backstageplay Inc., trading on the TSX Venture under the symbol BP. Scott, welcome back.
Scott White: Great to be back.
James West: Scott, you’re making all these press releases, you’re knocking it out of the park, as I like to say, and now you’re telling me that you’ve got a pipeline full of projects that are outside of the music industry?
Scott White: Right. So again, the model that we created is a model that applies to any hero, and there are heroes in professional sports, there are heroes in the internet influencer sphere, there are heroes all outside of music. So you know, the finders that we recently have announced have deep connections in various sectors: the professional sports sector is a sector that is also looking to gamify what they do, and if you go to any Maple Leafs game in Toronto, you’ll see on the scoreboard there’s some kind of gamification that happens at every game or in advance of every game.
So we’ve had some meetings, we’ve prepared some demos; I won’t say what particular genre of professional sports it’s in, but there’s significant interest in what we do, in that sector.
We have had a number of discussions with an internet influencer, and this one’s kind of interesting: it is a, the demographic is a 2-10 age group, it is a brand new brand, it is a wild YouTube sensation, 16 million viewers right now, that grew from 12 million last month. And it’s something that’s sponsorship-driven and advertising-driven, so the model will be a little bit different for us. But again, it’s something that will move us into a different sector, and it will provide benefits to something outside of music.
James West: Interesting. I can see where the professional sports franchise could be absolutely huge.
Scott White: Yeah.
James West: So anybody – I guess you could gamify individual players or entire teams?
Scott White: Entire teams, the venues that have those teams participate could have a gamification element…I mean, there are so many possible variations and combinations that it’s interesting. And as an early-stage company, we are just exploring all of them.
James West: Very interesting. Okay, so then, you’re essentially executing on the business model that you articulated the last time you were here, and so you’ve added some more people to the mix as well. Wayne Thompson is a name I recognize for sure, and you’ve got some new music acts in the mix already?
Scott White: Yeah. The intention for us is to canvass all genres of music. Jory Boy is a relatively new sensation; this is a guy that doesn’t have a website, you know, he’s never released or dropped an album live on radio; he’s about to do that, we’re about to gamify part of that. You know, we’ve got a band that is alternative that we recently entered into a contract with called The Dirty Hats, and they’re, again, they’re a very well-followed, very loyal fan base in that particular sector.
So what we’re intending to do is cover all genres of music, get a couple of deals in that are medium-sized, test it out, make it work, and then go and execute some bigger deals.
James West: Okay. So run us through the revenue model again, just so we can keep that front and centre in our heads.
Scott White: Sure. So again, there are new ones evolving. The primary focus is a subscription-based, top-up model; you know, a monthly amount per fan, the fan comes in, they buy a membership, call it $5. That amount we revenue-share with the artist on a 50/50 basis after cost, and the fan gets a certain allocation of credits. They run out of credits, they top up; this is more along the lines of the typical social gaming, Candy Crush-type model where you pay to play and your objective is to get on top of the leaderboard and win that life-changing prize that money can’t buy.
So that would be where we started and where we focus. We have other models evolving; we have a group that we’re talking to that is a large, well-established music brand that’s now moved into, or moved into some time ago, the recreational market. They’ve got casinos, they have 90 restaurants around the world. So more than likely we’ll see a, what we would call in the online gambling industry, an affiliate model with them. We’ll tag every player that plays the game; when they register, they’ll have a unique identifier in there. We’ll issue a coupon to them, they’ll hold the coupon up when they go back into the storefront, and we’ll be able to access that re-entry of that patron and have a revenue share based on what they spend. So that’s sort of what we would call an affiliate model.
The group that we mentioned that are the internet influencer group a few minutes ago, that model will probably be a pure advertising model. Given the number of eyeballs, given the timeline, they’ve got a product base coming out in Walmart and Target before Christmas time, so it’s going to be awesome to bring games into that environment and to have kids play these things.
James West: Sure.
Scott White: Like, you couldn’t ever get them to buy online, I mean, that wouldn’t make any sense; but there are a lot of advertisers that will sponsor that eyeball time.
James West: So for the artist or for the hero, as we call them, the attraction is, besides monetizing the fan base to a higher degree, is obviously an increase in engagement with the fan base as well?
Scott White: Absolutely.
James West: Okay. Then so, I mean, where – how soon do you think until this is being adopted by, you know, Tier 1 AAA sort of talent like Lady Gaga? Why wouldn’t she do this?
Scott White: So we are talking to Lady Gaga types, and it’s interesting that one of our finders has a really good relationship with Lady Gaga. We haven’t moved down that market yet; we did get in the middle of a large opportunity that’s still out there, and we found the lawyers got in the way, and the lawyers got in the way because the words ‘game’, ‘gaming’, ‘online gaming’, is confusing. And so I think that, you know, what we decided to do was focus more on the intermediate-sized gigs, get them up, get them running, get them cash flowed, and then we’ll have a history, and then we can go back. But there are eyeballs on this from managers, from very large corporations. We track our emails, we track everything that goes out, and we see who’s reviewing what we do.
So again, it’s really just a matter of us executing, continuing to execute, generating some cash flow. And you know, the way that I look at it, we have a company that can carry two valuations: it can carry a valuation based on a multiple of revenue, you know, existing and forward-looking; it can be based on an earnings multiple, you know, as of today or forward-looking; or we have a company that is something that’s unique, that’s creating a brand new model, and in fact, a couple of different models, that, you know, may carry a different value. And that would be a value that would be a buy versus build or something along those lines, that may not track what we do financially. And I think that that’s probably what we’ll see in the market before, you know, we can say unequivocally ‘here’s a player lifetime value times these number of people per artist’ I think we’ll see a value that relates more to the uniqueness of what we’re creating, and the potential acquisition opportunities that might be out there for large people in the entertainment sector.
James West: Right. The issue with the lawyers getting in the way because of the presence of the idea of gaming, I just want to focus on that: there is no actual gambling gaming involved?
Scott White: No, but again, it’s confusing, right? To a – you know, an artist doesn’t want to talk about this stuff, I mean, they want it work seamlessly, and the way that the model has been devised, I mean, social gaming is a $4 billion business. It is out there, it’s been operating for a long, long time; we’re really just using that model for what we do, but extending it specifically into music and to other, similar industries.
So there isn’t an issue, and again, you know, being a lawyer and coming from 25 years in the online gaming sector, we devised this company to make sure that it isn’t what we used to do.
James West: Right. Interesting. Okay, Scott, let’s leave it there for now. We’ll come back to you in due course and we’ll have this conversation again; sounds like you’re making out very impressively, and we wish you luck. Thanks for joining me today.
Scott White: Outstanding. Thank you very much, James.
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