Terry McBride's Blog

Dear Nettwerkers,

This is the first of what will become a bimonthly blog written by myself with editorial content added by other Nettwerk partners and senior staff. This blog will give you a sense of what we are thinking and how we see the future of not only Nettwerk, but that of the Music business. The editorial will also include my thoughts on other business and even touch on some personal thoughts. This blog will be open to the public, but for the better part I do not intend to engage in any conversations. I know that in time I may look back and see how my thoughts have evolved and laugh at what I may have said, but am quite fine with that! :-). The blog will be split into two themes, 1) today and the future and 2) the past.

So in this first blog lets delve into the future and where we as a company are focusing. I view Nettwerk in many ways as a branding company, with the Artists being the brand. We work with the artists to enhance their brand, which in itself has many verticals of revenue. Let take a simple view at these verticals.

1) IP- Intellectual property in the form of a) Master copyrights b) Publishing and Songwriting copyrights and c) Name and Likeness. The value of this IP is realized from many sources, such as: the sale of CDs, movie and TV synchronization, digital downloads, subscription services, advertising from various media (TV, radio, Internet).

2) Merchandise - everything from live venue to direct-to-fan sales of just about anything one can imagine that works within the brand.

3) Live Revenue - everything from live concerts to special event appearances to private events.

The value that all these verticals enjoy will be directly attributable to the value of the brand itself. So what is the most valuable commodity in building a brand? From my point of view, its "data" and "cause."

I will leave that with you, to be discussed more next week&.

For the "Past" part of this blog, my partner Dan Fraser has written an editorial on "Amp", what it is and why it was started many years ago.

Many warm regards

t


AMP

I remember when it became apparent that we had to do something. Sarah was playing the Hershey Park Stadium on a radio show. After sound-check I went across the park to the Home of the Hershey Bears, a very historic venue that I had to see. Inside the Hershey Park Arena was a retail store that was selling Sarah merch that we had stopped selling in 1993. It was product that was never accounted for and the merch company was just out selling product to retail and not accounting back to the artist. It was hard for artists to control their merchandising rights. So we started AMP.

AMP was not your typical merchandise company in that it would do the treatment on the goods and then sell direct to artists. Not many companies had been doing 100% net merch deals but we where the first Management Company to add this as a service. By owning their own merchandise, artists could retain 100% control over one of the three top assets that they would create and own. Those assets were Master Rights, Publishing and Merchandise (Name and Likeness).

Currently AMP has a staff of 18 people that work full time in a warehouse only minutes from the Canada / USA border in the town of Langley, BC. AMP also has up to 60 part time vendors who work with us through out the year on tours and sporting events. After almost 11 years, the team of printers that we started with so long ago all still work with us at AMP. We have also developed a very strong and committed sales team that this year will set a new sales record. AMP is very much a "family" run business, and Mike Hensel is the GM of the company. He has worked with Nettwerk since the Skinny Puppy days and has developed a highly motivated group of people out at AMP.

Since entering into the sporting world 3 short years ago, AMP has become very successful in the world of football, hockey, soccer, and baseball. We have set sales records at international sporting events such as the 2006 IIHF World Junior Hockey Tournament. AMP increased sales in 2006 by outselling the old mark by nearly 300%. AMP has quickly become Canada's leading "Sporting Event Vendor".

E-Commerce is quickly becoming an AMP specialty. We have worked hard alongside the Nettwerk IT team, WEB designers and Internet Marketing teams to develop outstanding Web and E-Commerce solutions for our sporting events and teams. We have increased online sales for our sports teams dramatically and are looking forward to adapting this technology and expertise to the touring division.

From this same team we have perfected many of our crowd sourcing contests and initiatives. There are many ways to tap into this team of people. Many of them work in the Vancouver office and I will be sending out a contact list to you all.

Cheers,

Dan