VNUE Company Update - July 2019

I’ve had a few folks reach out to me recently for a company update, and suggest that we try and do an update periodically. Admittedly, I believe we should be doing just that, and given we have a smallish team, sometimes other priorities get in the way. So, I am going to make an effort to provide you with a regular update on how things are going.

The first thing I want to make clear to shareholders and VNUE followers alike is that VNUE is not a “short term” play. When I joined in 2016, I knew that this was going to be more of a marathon - based on the fact that we are tackling monumental problems that have existed for decades, in the case of music licensing especially. This is not simple technology, nor is it a simple business. It is all quite complex. But we have an amazing team that I am very proud to have working with me on our objectives. If anyone can do it, it is this team.

For those of you who may not read our press, we added Jim King to the team a few months ago as our CTO. Jim is a former “C” level executive at BMI, specifically in technology. He also is an entrepreneur and founder of a company called CoreRights, which had sought to work on direct licensing solutions for music. Jim brings a wealth of knowledge and experience to VNUE, not only because of his tenure at BMI and his understanding of their thinking, but also because he understands all the ins and outs of general music licensing in the real world. This was a huge add for us.

Another big win for us, as you may know, was landing Rob Thomas as a client for our consumer recorded products. Rob is the lead singer for Matchbox Twenty and is an international superstar. We are recording every show on his world tour, called “Chip Tooth Tour,” and releasing limited-edition, live CD sets to fans immediately afterward, as well as download cards and digital downloads via our set.fm technology.

Landing this deal did not come overnight. In fact, I have been working on it long before VNUE was even a thought. As some of you know, I have been doing live recording now for 15 years, through DiscLive Network, which is now VNUE’s exclusive partner, and/or through Abbey Road Live, which was the name that DiscLive took during the time we partnered with EMI. In fact - when you want to talk “marathon,” this is truly a perfect example. When I discovered what a cool product that the “instant live” recordings are, around 2003, I dove in head first. I have always believed that provide artists with additional revenue streams and the ability to control their own master recordings is hugely important. And in the early days, there was a lot of challenges, for example record labels worrying about our product affecting album sales, quality concerns, etc.

And through the years, we overcame a lot of those challenges, and in fact, through the natural evolution of the music industry, and digital technology, some of those challenges simply went away. As recorded music sales (CD sales) slipped, and streaming started taking off, we were already out there creating these experiential products, and doing “real” downloads, which paid off for artists and labels much better than traditional products.

So in essence, my VNUE marathon started 15 years ago, and is culminating in a company that is the vehicle to bring several important things together: music licensing and recognition, through Soundstr, and our consumer products - experiential products - which is what allowed me to get here in the first place.

I think what I am saying here is that those of you have invested, or taken interest, in VNUE, should be aware that the very short time that I’ve been involved, and my team, is nothing compared to the groundwork that has been laid before it. What may seem like an eternity - three years since I joined - is a very short time period compared with the 15 years that it took me to bring it to this point. And in those three short years we achieved monumental things on literally a shoestring budget:

  • Cleaned up the company entity which took approximately a year and a half.

  • Immediately leveraged DiscLive to create revenue opportunities for the company where none existed.

  • Acquired set.fm to enable the company’s original call to have a digital “instant live” solution, and immediately landed Rob Thomas as a client for the first set of small shows in New Jersey (which gave us momentum to land the entire tour this year).

  • Acquired Soundstr, which mirrored my own patents I had filed in regard to music identification. Soundstr was and is a huge win, and we are actively in development and testing, and have signed contracts.

  • Brought on Lou Mann, former GM of Capitol Records, and former president of House of Blues Media Properties

  • Brought on Jeff Zakim, former head of digital for EMI and Blue Note Records.

  • Brought on Jock Weaver, former president of Hard Rock Cafe International (who took that company public), and who also founded TBA Entertainment, one of the largest live entertainment companies at the time.

  • Brought on Jim King (above).

  • Recently, signed a very important deal with Pro Music Rights, a small but aggressive PRO (performing rights organization) who is requiring our Soundstr devices and technology be utilized for every licensee they sign.

  • Brought on John Madison, an experienced radio executive, as an advisor to the company, to help with our Soundstr model as it pertains to radio.

  • Brought on Nan and Bob Kingsley as advisors, who are deeply affiliated in country music as well as radio.

  • Announced the addition of Nick Lippman as an advisor to the company. Nick is half of the management team that manages Rob, as well as the late great David Bowie and others.

And there’s more.

My point here is all this occurred in a very short amount of time, with basically “bootstrap” level funding. And we are JUST getting started. The Rob tour is a catalyst for more and bigger tours. We are engaged in discussion on multiple fronts in regard to both more tours and Soundstr. It is frustrating because we cannot announce things before they happen due to being public, but with me knowing that YOU would like to know.

So please. Stay tuned, and bear in mind we are all “in it to win it”. And my commitment to you - as shareholders and/or fans of the company - is to do my absolute best to get us to the next level. There will be fluctuations in the share price, no doubt, but again this is a long term play (note to self: I should have bought Apple stock in 1991!) At this level, that is going to be normal. My plan - as I have stated publicly - is to build value and to get VNUE on to an exchange such as Nasdaq or Nynex, where the share price will correct itself and more accurately reflect our true value (we also know we are quite undervalued any way you look at it).

My team and I are all serious guys. We love music. We love technology. And most importantly, we like disrupting a business model that has been done the same way for a century. There is no reason that technology cannot change, help and improve it. Get artists and writers paid. Make it easier on the PROs. And create revenue streams for artists where none existed previously. We believe we have insanely valuable technology that once we hit our stride, will become apparent; and we have the team that knows what to do with it, and importantly, how to do it.

I appreciate you taking this ride with me. With us. It is a long ride, but as noted above, most of that ride started long before I became CEO of VNUE. :)

I hope I will see you at a show sometime, and I will make a point to get updates out when possible, on a regular basis.

In the meantime, rock on!

First Ever FaceBook Live Q&A with VNUE CEO Zach Bair

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First Ever FaceBook Live Q&A with VNUE CEO Zach Bair

On May 1st, at 7PM Eastern/6 Central, we will be doing our first ever Facebook Live Q&A session with VNUE's CEO, Zach Bair. Here is his message to you:

Dear VNUE, fans, investors, followers, musicians, and music lovers:

Music is my life. Literally, every facet of what I do is about music. Since I was a little kid, driving my mother nuts on the piano, and even to this day, I still play and record music. Along the way, I have been very fortunate enough to combine two things I love very much - technology and music - and the goal in mind has always been to empower artists and to create new revenue streams in music. Three years ago I took the helm of VNUE and brought in the team and technology to *really* realize that dream to the fullest.

Many of you no doubt follow VNUE's press releases, and our rather dry and mundane corporate filings with the SEC. Yes, we are a publicly traded company (OTC:VNUE - clever symbol, right?).

What many if not most of you do not know, however, is the story behind VNUE, and the passionate and small group of guys and gals behind this company. Most of us are musicians (some platinum-selling), and many of us have had successful companies valued in the hundreds of millions of dollars. We are normal people, not "suits," who have come together because of our passion in this space. Normal, yet experienced and driven.

Yet we are all here and grounded because, even though VNUE is small and under-valued (hint: great time to invest), we believe that VNUE has tremendous potential, and we are in it for the long haul. What drives us is the desire to change the "status quo" and move the needle forward in an industry (music) that is reluctant to change. We have the team, desire, technology, guts and fortitude to make that happen. I cannot tell you how thrilled I am to be leading this charge, and how proud I am to have this amazing team around me.

This LIVE Q and A will give me the opportunity to tell you about VNUE, our people, and our products, and how much we believe in what we are doing, with our set.fm and DiscLIve.net "instant live" recorded products, and importantly, our Soundstr.com "music recognition technology," and how we hope to reshape the music licensing world and to ensure each and every rights holder gets paid for their work. I want to share this passion with you, and I hope to take some of the mystery out of what it is that we actually do.

So, on May 1st, at 6PM Central time/7PM Eastern, please join me for my first ever Facebook Live broadcast, right here on the VNUE page, at the end of which I will take a few questions. In the meantime I will encourage you to visit www.vnue.com, and our brands www.set.fm and www.disclive.net.

Pleas visit http://www.facebook.com/VNUEINC/ for the LIVE broadcast!

Respectfully,

Zach

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Lack of Transparency in the PROs - Exemplified

No doubt anyone in the music industry who has anything to do with writing or publishing songs, and/or performing them, has heard of the issues that have cropped up in regard to ASCAP's "premium payments".  These payments, supposedly, are paid to songwriters to reflect the importance to ASCAP's repertory that achieve high level performances on radio, and to compensate members that have some type of a "prestige" value.

Recently, this has come under fire, with those in the industry starting to speak out - loudly - about it.  An article I came across in Billboard, entitled "At PROs, Transparency Shouldn't Be Just A Buzzword," by SMACKSongs president Michael Baum, went into great detail about this issue and how country hitmaker Shane McAnally's woes with ASCAP have put these payments into the spotlight.

To summarize the issue, McAnally notified ASCAP that he was leaving ASCAP to join another PRO, Global Music Rights.  Although he expected his payments to keep on coming - including the premium payments for which he was owed - he was shorted about a million dollars of what he had been anticipating.

He is now in a fight with the PRO to get what he was due, and promised.  And as is typical with ASCAP and the other major PRO, BMI, he got the run around.

According to Baum, they repeatedly asked why the money was being withheld.  ASCAP responded that it "takes a long time" to manually create statements.  Baum pointed out that nobody ever cited a rule as a basis for withholding payments, or in fact that they were phasing out the payments.

Typical of snarky behavior that small venues are used to dealing with (when it comes to "blanket licensing"), no one said anything to the point that removing works would also mean leaving those monies at ASCAP, even while ASCAP continued licensing McAnally's work.

This is beyond snarky.  I would say it borderlines on illegality, but since I'm not a lawyer, I cannot make that assessment alone.  It sounds like Baum, however, is going to take this to the Justice Department, and I hope he does. 

This practice is yet another glimpse into the tactics that these organizations utilize to withhold money that songwriters, artists, and publishers expect - along with the already egregious tactics used to force mom and pop shops to license a PRO's entire catalog.  There is ZERO transparency.  They state that they are "protecting" the interests of their members.  But in my eyes, and moreover the eyes of more people every day, they see this as a money making machine and somehow, somewhere, someone is lining their pockets with the hard earned money of the songwriters and creators as well as the licensees that pay for it. 

Through our technology at VNUE and through education of the public, and working with organizations, artists, writers, and publishers, we hope we can help to facilitate change that will ensure folks are being paid and that the entire process is transparent.

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Artists and Musicians Earning Potential: Time to think outside the box

As many of you know, I have been an artist advocate since before I even moved into the music and technology sector.  Having the benefit of being a performing musician at times (granted not at the level of many of our clients at VNUE), it is very easy for me to see and identify problems and current trends in the industry.  With the added benefit of having worked in technology, and constantly looking for solutions that will help artists make more money and give them more control over their art, I've been fortunate enough to create viable solutions and have a very good understanding of how to fit the pieces together.

But what many artists and musicians don't think about is this:  They are ultimately the sole decision makers when it comes to creating more of an opportunity to create revenue (income) for themselves.  They are the facilitator; and they can also be the roadblock.

For example, if you think you are going to make a record and strike a big deal with a label, guess what?  You're wrong.  Well, at least 99.9% of the time.  These days, things are a lot different.  Unless you already have 100K or more followers on your social media, a major label won't take a second look at you.  And even if you get a deal, you likely will still be relying on your touring income for years.

But there are other ways to take control of your career and make a good living, and even succeed.  Innovative solutions such as what VNUE is rolling out such as set.fm can help make that difference.  Utilizing Youtube and generating interest and followers is a positive strategy.  Old-school posters and flyers when you play your gigs are never out-of-style.

To be clear when it comes to set.fm, I'm not tooting our own horn, so to speak, but using this as an example.  You MUST be able to think out of the traditional box.

Set.fm is our technology platform that we use with VNUE to record major artists and release the content to fans right after the show via mobile devices and the web (this is in addition to our traditional physical DiscLive products).  There is no risk to the artist - we do a net split - and the artist gets the major percentage of a revenue share.  As we like to say in the business,  it is "found revenue," because the artist just gets on stage and does what they always do:  play music.

But did you know that our technology is available for ALL musicians and artists?  Musicians can download the set.fm "STUDIO" app, and utilize it to capture and upload pristine live recordings of their performances, and market it to their fan base.  Artists can set their own price, and have total control over the content.  You need only go to set.fm and sign up.  There is no cost.

The biggest thing for artists both large and small alike is getting over the jitters for putting something out that is live and "raw". VNUE has overcome this to a large degree because we mix and master everything on the fly for our clients - folks such as Peter Frampton, Devo, Blondie, Simple Minds (above), and others.  We have built up trust in that regard - quality unsurpassed.

For the average artist, however, you simply must be confident in your art, and treat it like a live broadcast.  It is going to go out, like it or not, right after the show (which is how you can increase your sales potential).  This additional revenue can help underwrite your tour costs, and provide additional exposure so you are not GIVING away your content to gain exposure.  You have worked hard for it.  Let fans support you buy buying it - and buying into you.

There are a lot of other opportunities out there too, today, to help you make money.  But you must be willing to think outside of the traditional box, and take some risks.  There is a glut of content out there, and everyone wants to call themselves an "artist".  You need to differentiate yourself, not just by your music, but by your effective grassroots marketing, and your strategies.  And you must tour.  Tour hard. Fans are built one by one, at each show - not by hoping you get a "LIKE" on social media, or a one-hit wonder on the radio (fading fast, folks).

At the end of the day, the industry has changed - but the work ethic to get to the top has not.  Work hard, play hard, and create a name for yourself.  Be smart, and use smart tools to help get you there.  Focus on that, and you stand a good chance of making a living at your art.

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The subtle differences between "instant live" and a classic live album.

It often comes up in conversations with managers and labels that they are contemplating doing a "live record" release in the near future, and are therefore hesitant to do something with VNUE because of that.  Given the number of times this comes up, I thought I would take a moment and share the differences between VNUE experiential products, and standard retail-released CDs and other products.

Since the dawn of the record business, bands and labels have put out live records.  These albums traditionally capture the live excitement of the show, and fans have always loved this kind of thing.  However, with the advent of technology, and the Internet, we all know in this industry that recorded music sales overall have taken a fairly steady slide over the years.  This is highlighted by the recent announcements of such major retailers as Best Buy, who are pulling CDs off the shelves. Others such as Target are exploring the option.

Yet, bands and labels still opt to spend tens of thousands of dollars, if not more, to release traditional CD/DVD sets either D2C (Direct to Consumer) online, or through other means.  

What they do not realize is that the shift from this type of product to more "experiential" products - such as our instant live CDs made famous by DiscLive - is well under way.

VNUE, and through DiscLive and set.fm, our exclusive brands, produces live concert recordings in pristine quality, and releases that content to fans right after the show.  Typically we follow a tour and capture every night, so that fans get to relive THEIR experience, which becomes a cherished memory of the show with their favorite band.

What most folks don't know is that this is a completely different product than the aforementioned live record, and that content we record for fans on the night can then be repurposed to be included with the more classic DVD/CD set.  They are two different products, destined for two different audiences, yet by utilizing content we have already amortized in our business model, artists and labels can spend less and still achieve additional revenue from the original recordings we produced.

Case in point is our work with legendary performer Peter Frampton.  DiscLive (as Abbey Road Live), recorded over 100 shows with Peter on his "Frampton Comes Alive 35" tour, all of which were sold as limited edition collector CD sets, and are still available online.  After the tour was over, Peter went back and picked out his favorite songs from the shows along the way, remixed them, and released a CD/DVD set through Eagle Rock Entertainment. 

So, not only did Peter realize revenue from our experiential products, he also realized significantly more upside by offering the traditional CD/DVD combo after the fact.   Fans were able to get the product(s) they wanted, and the revenue opportunity was extended with a much lower cost factor by not having to send more crews out to record what was already being recorded.

I would encourage any artist who is considering a live record to reach out to VNUE first, to see how we can create a win across the spectrum by connecting the artist with the fans through our unique products, and pushing up the bottom line by leveraging our ability to repurpose content.  As I often say (and my co-workers probably are tired of hearing), our "instant" products are only the touchstone of the bigger opportunity. 

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