Mobile Streams (LON:MOS) this morning revealed its Appitalism.com applications service has hit a significant milestone. It now has more than 10 million music downloads suitable for phones and home computers.
The company has signed up the major independents as well as four main music labels - EMI, Sony Music, Universal Music Group and Warner Music Group.
Albums and tracks can be downloaded Appitalism Music Store in the US and Canada. A catalogue of more than five million tracks from independent labels as well as EMI and Warner Music Group is also available on Appitalism in the UK.
Chief executive Simon Buckingham said: "The Appitalism.com service has been designed to help consumers get the most value from their digital devices and to provide fuel for their digital lives.
“This comprehensive music library is a key part of that proposition. Appitalism is a destination that conveniently brings together not just apps but all types of digital content in a single place instead of having to search different stores for different genres of content.
“Appitalism members can easily access their music through their personal App Cloud from where it can be easily downloaded onto different mobile and computing devices simply by logging in from any web browser."
What’s unique about Appitalism is that it is “device agnostic”. So unlike the Apple Apps Store you can buy software applications for generic smartphones, BlackBerries and Android tablets as well as iPhone and the sought-after Apple iPad.
Buckingham wants to be the one-stop shop for the mobile generation. To do this he has created a major library of premium applications, songs, videos, books and games.
And he hopes by combining that sort of content with the company’s distribution capability, Mobile Streams will be able to build a formidable business in the apps space.
The global roll-out of Appitalism shows just what sort of reach the company has. It has ties with most of the major network providers including well-known names such as Vodafone and Orange and also the not so well known, but increasingly important distributors in Latin America and Asia.
“We just need to get the fly-wheel turning, but we are very well placed in this market,” Buckingham told Proactive Investors recently.
“We have a very, very strong distribution footprint which will bring in more developers and more content....it is a virtuous circle.
“We offer customers the option to subscribe at a discount or buy a la carte. We are neutral and completely device agnostic.
“We are trying to provide everyone with the best experience whatever device you use. It is simpler and easier for the customer to come to a one-stop-shop.”
Appitalism revenues are earned from tiered recurrent monthly subscription clubs, or one-off purchases of apps and content.
Transactions on the site are all made via either credit or debit cards with the proceeds arriving the next day in the US.
These cash inflows are used to offset customer acquisition and marketing costs. Additional revenue is then derived from banner advertising.
The rates being earned from this source are stronger than originally modelled thanks in part to new launches of digital devices which coincided with Appitalism's arrival on the scene.
The investment in 2010 of around £750,000 in the design, development and launch of the Appitalism service has been funded from a combination of operational cash flow and cash reserves.
A lot of the work will have been done by the company’s in-house technology team called Smartphone Center of Excellence.
Based in Hong Kong, it is essentially a research and development team that has built the platforms for the iPhone, Google Android and BlackBerry that allows Mobile streams to sell apps for any device. It can even customise them regionally.
That expertise permeates all the way up to the boardroom. Buckingham is a veteran of the sector having started his career in 1991 with a then little known Racal spin-off called Vodafone.
Eight years later he left to start Mobile Streams.
So the group has the tools and personnel claim a big slice of the nascent apps and mobile content market.
The last financial results show the group had reserves of around £1.4 million, so it also has the cash to bankroll this “land-grab”.
“It is about getting it (Appitalism) out as quickly and effectively and widely as possible,” Buckingham said in the recent interview.
“We have the cash in the bank to fund our activities. The risk to growth is execution. We have got to take advantage we have got to get the timing right.”
At 12.20pm, the shares were up a penny at 18.5p each and have advanced a spectacular 370 per cent in the last three months.
Amisha Chohan, smaller companies analyst at HB Markets, is still a fan and repeated her 'speculative buy' on the stock today.
“The expansion into 50 new countries, the successful launch in the USA and earnings from apps provides great scope for substantial earnings enhancement,” she told clients.
“While it is tempting to take profits, the geographical roll‐out and the recent contract news encourages us to reiterate our 'speculative buy' recommendation.”