The Crowdsale Analyst: SingularDTV — Three Projects In One?
Back again with another crowdsale evaluation. I’ll do my best during the coming weeks to work through the currently announced ones (Gnosis, Golem etc) and please add information and question my info and conclusions so we can make good and rational evaluations of these crowdsales.
As usual I will score each of the below categories from 0 to 5, with 3 being neutral in the eyes of the investor. Below 3 is bad for the investor and above 3 is good for the investor (and could be good for the project as well).
DISCLAIMER: I am a holder of several different cryptocoins, and I have invested in several crypto related projects. This following is my own opinion, while trying to be as neutral as I can.
Past evaluations:
The Crowdsale Analyst: Kibo ICO — Where is thy team?
Project: Singular DTV
Singulars tagline is ‘A Blockchain Entertainment Studio, Smart Contract Rights Management Platform and Video On-Demand Portal’ — phew, that’s a lot of info in one sentence.
Team/Founders 4/5
Do these guys have what it takes to succeed as entrepreneurs? Track record and previous projects? Experience and formal education?
First of all, Singular is a ConsenSys backed project with Joseph Lubin (former Ethereum COO) listed as it’s CTO. Consensys (founded by Lubin) is a software/startup studio based in Brooklyn, mainly focused on Ethereum projects.
Zach LeBeau, the CEO has both business experience and has experience from the entertainment industry — having produced music and written, produced and directed several tv and movie projects in the past.
Kim Jackson [imdb](http://www.imdb.com/name/nm1669333/), Chief Creative Officer has produced several top tier movies.
From the looks of this team, they seem to have gathered a top team with the right experience and drive to fulfill the vision of this project.
However, Joseph Lubin will clearly not work fulltime on the project (because of many other commitments) and there are no other technical persons listed in the founding team. Despite this they have a great team, and a great backing from ConsenSys to be able to find the resources they need along the way.
Market Potential 4/5
Singular have chosen to go for three different markets with some synergy effects between them. They will be a TV/movie production company, a digital rights management platform and a TV on demand platform.
The TV/movie industry is a clear hit and miss industry. They give clear goals for the number of views for the proposed TV series and documentaries and how these convert to revenue. They give examples of block buster TV shows (like 9 million views for a finale of Game of Thrones) and put their goal to 2 million views over 24–36 months. If they reach their goal they will have an return on investment for the TV series of 140 % which seems like a great number. However this number must be very uncertain, it could just as well be 500k views or 8 million views over the given time frame.
In the long run, building a highly profitable content creation studio could be very lucrative for investors — but that all depends on the quality and reach of the produced content.
Second, the TV on demand platform is not given any numbers in the summary overview. This is a very interesting technological project but hard to value since it is also a hit and miss market. You either get the traction needed to grow and establish yourself in the marketplace or vain away.
Third, the digital rights management platform is the technological project given the largest development budget ($2 million). This could make sense. I would assume it’s easier to establish yourself in this nascent market, if its a good platform there will be many independent film and music producers willing to use the service and this service is not dependent on the network effect in the same way as the TVOD platform.
In summary, they are shooting for three potentially very large markets (I’ll leave it at that) which should give them a chance to pivot the business model and focus on one of these if needed in the future.
Product/Business/Operating Plan 3/5
Proof of concept available? How many iterations are done? MVP available? Is the product validated by outside users? 2/5
They have a running website, the scripts for the TV and movie projects seems to be done. They have released some video explanations of what they are trying to achieve.
For the technological platforms I little information or timeline for the development. Ujo Music (the potential partner for Digial Rights Management) does not have any demo what I can see. In fact, their latest blog post indicates that they are still exploring the space [Ujo Blog](https://blog.ujomusic.com/welcome-back-1addcc06bcc6#.sg7jdk4ps).
What is the current operating plan and why do they need funding now? 4/5
They have a clear time table for releasing the Singular tv-series, first documentary film and the short documentary series. These projects require the funds asked for to become reality.
What is the go-to market strategy? 2/5
They spend around 8 lines of text in the summary paper discussing the need for a robust and creative marketing campaign (that is very short).
Since they are a video production company I can only assume they will be able to produce very high level content when reaching out. My only concern is that they mention they will do it with thought-provoking content and some very niche keywords (blockchain, transhumanism etc.), I hope this will not make them too specialised but that they will still appeal to the general sci-fi and tech interested audience as well.
Roadmap 3/5
This is the roadmap from the published summary paper:
SEPTEMBER 2016, LAUNCH of ‘The SingularDTV CODE’ tokenized ecosystem
OCTOBER 2016, Production begins for ‘Singular the TV series
DECEMBER 2016, Release of S-DTV’s first Documentary film into the marketplace
FEBRUARY 2017, Release of short form documentary series Episode 1, with release schedule of 1 per week for 8 weeks
JUNE 2017, The premiere and worldwide release of “Singular”, Season 1
This roadmap seems reasonable with clear timings for each project, downside is that they don’t mention the digital rights manegement system. We need a deadline for that as well.
Competition 3/5
Do they have a clear view of the competition? How do they plan to beat them?
They are clearly aware of the competition in the space for all three projects, but there is no discussion about the competition.
Valuation 2/5
Is valuation sane? 2/5
As a refreshing change from many other crowdsales they have set a clear goal with their fundraising, $7.5 million in order to fund their project pipeline. To raise this they are releasing 1 billion SNGLS. 500 million goes to the fundraising participants, 400 million to the project, and 100 million to a set of core investors.
All future revenue coming into the system from the above projects will go through a mechanism where they are splitted to the above three groups (in those proportions). The holders of the 400 millions (the founders) have pledged to never collect this revenue for themselves but to reinvest this in the ecosystem.
Is the fundraising sane? Well, hard to say. The founders are keeping 40 % of the project for themselves which seems like a very big part.
I would have prefered structure where the project automatically receive a share of the revenues (40 % with no tokens attached), the founders are given a part of the tokens (say 20 %) that they will vest over the time proposed to complete these projects.
What is the exit potential and exit options? 2/5
Nothing is said about exit strategies, but it can be assumed the tokens will be traded on exchanges.
However, there is no mechanism for an investor to get out of the investment before the tokens are listed and tradeable which is a minus.
The only exit mechanism mentioned in the paper is that if anyone of the founders exit the project, they will recieve their part of the 400 million SNGLS and the revenue that comes with these.
Legality 4/5
As an investor? 4/5
The current summary paper clearly state that this is not an investment offer. Later in the paper they clearly describe the revenue sharing propeties of the SNGLs. Since this is not a final fundraising paper I assume they will add to the disclaimers and make it clear it’s not an investment in the eyes of the SEC.
Legality of the business 5/5
Singular will produce their own content which they will own 100 %. In the platforms they will work directly with other content owners to list and sell their content. I see no legal risks in that business model.
Security 3/5
How long has an operational proof of concept been live on the testnet (Morden)? 3/5
They have a blog post describing security testing, token distribution testing and payment API testing posted in August 2016.
Proof of external security evaluation? 3/5
Not available
Special security needs for this project? 3/5
Nothing more than in any other big, complex Ethereum project.
Conclusion 4/5
At first I was sceptical about this project. But reading through the available summary paper and looking up the founders team they seem to have a great team and a well prepared business plan. They have interesting synergies to bootstrap their tv on demand and digital rights management platforms with quality content. They are prepared and have a clear need for the funds now, and they have a realistic budget for project costs.
My biggest concern is the system they created where the founders keep 40 % of the tokens created, which they are seemingly free to use as they wish if they leave the project. Why not give the platform a share of the revenues directly? I would really like to see someone from SingularDTV come forward and explain the rationale and mechanisms behind this in further detail.
Second negative is if they are trying to do too much at once? They will be a content production company while at the same time building two different digital platforms. Will they be able to focus on each part enough? And do they have enough technical leadership to handle both of these projects?
Third point is if the tv and film projects will be interesting enough for a big enough audience? If this was a regular production company and you were given the opportunity to invest, would you do it?
Another negative that could indicate a current focus on form and good looks over technical quality is the website they have created. Without any complex content it still uses up a ton of system resources and makes computers run HOT — if this is the system resource usage they are happy with for a simple things as a website, the front- and backends of their content delivery system they will surely have issues down the road.
All in all, I think SingularDTV is a quality project and I hope they will succeed.
