It’s not often you meet a chief executive of a listed company who’s wearing tight-fitting jeans and a leather jacket, but that’s the kind of attire you’ll often find EVR Holdings PLC (LON:EVRH) boss Anthony Matchett wearing.
In fairness, his cool dress sense and perfectly-coiffed hair are befitting of the trendy, budding industry he works in: Virtual reality. In 2014 when he first came up with the idea of MelodyVR – an app which lets people jump into a live gig or intimate show with their favourite artist as if they were there – virtual reality was more of a well-formed idea than something more tangible.
Built from scratch
The technology existed but none of the major players was doing much with it, at least not publicly. Back then, Matchett was working as a recording engineer in the ad industry, a job which brought him into contact with some of the world’s biggest tech firms, such as Microsoft and Sony. It was through these connections that he learned about VR and had his eureka moment.
“I saw this technology and thought ‘this is great for games, but what about music? If you can put me on stage with The Rolling Stones I’ll happily give you a tenner.’”
It has been a busy time since then. During the first couple of years, Matchett and his co-founder Steven Hancock spent countless hours putting the groundwork to build the idea into a usable platform, working on everything from post-production to building the team.
Even the underlying technology had to be built from scratch as no one had ever attempted to use VR in this way before.
Rights all taken care of
Through a reverse takeover, EVR joined AIM in the summer of 2016. The first news announcement was important for the new investors: MelodyVR had signed a licensing agreement with a big record label.
As Matchett explains: “Rights deals are critical to the success of the music company because without them you simply can’t exist.”
Melody now has Sony, Universal and Warner – which account for almost all of the market – all on board.
The labels have even taken small stakes in EVR, so their interests are aligned with those of company.
Melody has also inked agreements with some of the bigger independent record labels as well as publishing groups, which represent the songwriters.
“That means we have access to almost every major music artist in the world and that, for a music company, is incredibly important,” says Matchett.
EVR has also been striking exclusive deals with dozens of venues of late, including with the O2 and NEC Group Arenas. These aren’t vital but it is a nod to the future as VR becomes more mainstream and competitors start to enter the fray.
“It gives us a massive competitive advantage in terms of, if you want to recreate our business, that’s going to be a big block for you.”
Launched in June
All that hard work behind the scenes has led to the app as it is today. Pay between £2-13 and you can thrust yourself into the middle of a performance by The Who or sit next to the cellos in the London Symphony Orchestra.
If you’ve missed out on tickets to see your favourite band, MelodyVR plans to live stream gigs so you can watch it as if you were there, turning your head to see the stadium and the crowd.
After four years of development, the app finally went live on the Oculus platform in May.
Oculus, which is owned by Facebook, has the only mass-market standalone VR device on the market and, because of this, the Oculus Go and the Oculus-powered Samsung GearVR, are the only places you can currently find the MelodyVR app.
Sales weren’t exactly through the roof in the opening few weeks, as you’d expect from a new app launching at the same time as a new device in a new market,
As the number of Oculus headsets start to rise – “Facebook really has the clout to push these devices” – so too should the number of MelodyVR app sales.
“The curve is like this,” says Matchett, using his finger to draw something akin to a right angle in the air.
“It’s not like launching an internet company where everyone already has access. People have to get the device (Oculus Go) in order to use it.”
Aggressive growth predicted
While MelodyVR can only be found on the Oculus Go platform at the moment, the app is hardware agnostic, meaning EVR can push it out onto other devices as and when the likes of Apple, Sony and Google bring out their own VR headsets.
Smartphones could be another destination for the app, too, as their resolutions start to improve. That could open VR up to millions of more users around the world.
While that’s the kind of userbase Matchett is eventually hoping to achieve, it’s still a few years away yet.
House broker Numis is forecasting sales of £1.1mln this year and £24.4mln in 2018. The real inflection point comes in 2021 when it is forecasting revenue of almost £250mln and a maiden pre-tax profit of £9mln.
“The growth is aggressive, but so is the industry,” concludes Matchett.