Slingbox

INNOVATIVE NEW PRODUCT

Lindell Chew

General Business Purpose

• What is Sling Media, Inc

• A digital lifestyle products company creating a family of consumer electronics products that are a natural extension of today’s digital way of life

• The first member of the Sling Media family is the award-winning Slingbox™ .

Products

• What is Slingbox- • A groundbreaking piece of hardwired ingenuity

that will literally transform the way you watch television, for only $249.99

• It allows consumers to access their living room television experience at any time, from any location.

• Uses a variety of different displays including laptops and desktop PCs, handheld computers and smartphones

• Slingbox Intro Video

Price

• $250.00• No additional monthly or service fees• Value Pricing -not too high but still suggests

quality -because consumer takes a risk

with an unknown brand it needs to be priced to reflect value

Distribution

• Selective• Available at home website, Comp

USA, and Best Buy.• Not exclusive so that product

would be available at stores our target market shops at.

• Not intensive to reflect higher quality.

Existing Competition

• No direct competition • Indirect competition at the product

category, generic and budget competition level – Hotel Movies and Television– Streaming Online Video– DVD’s– MLB TV

Threat of New Entrants

• Many companies with technological know-how with large R&D budgets could easily enter the market pending progressive growth

• Companies with a computer-based platform (Microsoft, Dell, Hewlett Packard)

• Companies with a television-based platform (Sony, Hitachi, Samsung)

Problems & Opportunities

• Opportunities – First to Market – Market Share Supremacy

– Partnership with Texas Instruments and Microsoft Window digital media

– Internet and cable use (Requirements) are at an all time high and continue to grow

Problems & Opportunities

• Problems

– Set up/Technology my discourage customers especially older population

– Power house, entering the market and

Target Market (size)- 3.5 Million

• Cross section of people with cable/satellite TV and high speed internet

• Affluent, tech savvy business travelers

• Age 25 to 55

• 30 top urban cities

Promotional Mix

Promotions Subtotal--$4,375,000• 10% of Net Sales

Revenue

Promotional Mix

Sales Promotion10%Internet

10%

Public Relations 20% Advertising

60%

Promotional Percentages

Advertising• 60% of Promotional

Budget• $2,625,000• Highest percentage

Need to create market awareness

Need to create positive image for new product

Public Relations• 20% of Promotional

Budget• $875,000• Large portion of $

goes to pay staff or P.R. firmResponsible for

maintaining a positive image towards Slingbox

Promotional Percentages Cont...

Internet• 10% of Promotional

Budget• $437,500• Small Percentage:

+ It’s Cheap

+ Lot of “Bang for your Buck”

-- Can be too Intrusive

Sales Promotion• 10% of Promotional

Budget• $437,500• Small Percentage:

+ Can persuade consumers to buy

-- Can be harmful to image

Advertising Example

SkyMall - Catalog• Cost: $92,600• 4% of Advertising Budget• Reach: 155,000 passengers per quarter• Positive Attributes:

Captivated audienceAverage passenger spends 15 to 30 browsing the

catalog Best possible way to target business travelers

Advertising Example

Business Travelers News – National Magazine• Cost: $404,260/year for 29 issues

½ page tabloid spread ads

• 15% of Advertising Budget• Reach: 54,800 subscribers

Pass along value/word of mouth would account for a much higher number being reached.

• Positive Attributes:Focused directly on corporate business travelers

Public Relations

• Budget – $875,000

• Must be of interest to the audience of the medium chosen

• Conduits with similar Reader Profiles to Slingbox’s target market

• Press releases to mediums advertising in as well, like BTN

• Examples of outlets to release information to:

The Wall Street Journal

• U.S. Circulation – 1,826, 493

• Average age – 50

• Graduated college or more – 76%

• Average household income - $192,324

Fortune Magazine

• 830,000 copies circulated monthly

• 83% graduated from college

• Median household income is $165,200

• 88% traveled by commercial airline in the last year

• 91% have a home computer

• 85% are employed in the business, industry or the profession

Internet Activities

• Links to Slingbox’s website or Banners ads on TiVo's website Cross promotion effort

• Banner ads on Business Travelers News Online, Skyscraper - $1,840 Monthly

• Travelocity

Sales Objectives

• It is projected that in its first year of business Slingbox will sell to five percent of its total target market.

• Therefore sales in its first year will total 175,000 units with sales of $43,750,000 in 2006.

• Project a slight increase in sales in following years

3 Year Projected Income Statement

2006 2007 2008

Revenue:

Net Sales Revenue $ 43,750,000 $ 44,187,500 $ 44,629,375

Expenses:

Cost of Goods Sold 30,625,000 30,047,500 29,009,094

Advertising 2,625,000 2,386,125 2,142,210

Public Relations 875,000 795,375 714,070

Personal Selling 437,500 397,688 357,035

Sales Promotion 437,500 39,688 357,035

Promotions Subtotal 4,375,000 3,976,875 3,570,350

General & Administrative 1,312,500 1,325,625 1,338,881

Testing/Evaluation 218,750 220,938 223,147

Total Expenses $ 36,531,250 $ 35,570,937 $ 34,141,471

Taxable Income 7,218,750 8,616,562 10,487,904

Less: Taxes (34%) 2,454,375 2,929,631 3,565,887

Net Income $ 4,764,375 $ 5,686,931 $ 6,922,017

NPV, Payback Period and IRR

• NPV - $1,459,619.57

• IRR – 27.96

• Payback Period – 2.19 years, initial invest of 10.5 million in venture capital secured to launch product