8-K: VodWiz Definitive Agreement
Item 1.01
Entry into a Material Definitive Agreement.
VODWIZ Subscription Model - The Company's newly-launched venture for a "Video-On-Demand" website and IPTV Portal has completed the test-phase of the servicing venture with Nanotech Entertainment. Under the originally structured and announced business model for this new venture, Hannover House titles (along with more than 2,500 titles from other independent distributors, and select major studio suppliers), would be offered to consumers for Video-On-Demand streaming under a "pay-per-transaction" basis. The beta test (involving approximately 50 titles exclusively from the Hannover House library) provided verification of the operational functionality of the venture and PPT model. However, in response to feedback from consumers and from participating studio suppliers, the option of offering consumers a monthly or annualized "subscription" access model (for a pre-determined and modest flat-fee), has been explored for VODWIZ. Principal competitors Hulu Plus, Amazon Prime and Netflix generate a majority of their streaming revenues through this sort of flat-fee subscription model, as compared to the PPT model. After discussing the possibility of offering VODWIZ consumers the option of a monthly or annual subscription with the VODWIZ principal supplier sources, it was determined that a revenue-sharing formula based on the actual monthly transactions for each title (as compared to the total of all transactions for VODWIZ), could serve as a fair mechanism to determine the pro-rata disbursement of subscription revenues across all participating subscription titles. As this subscription model option will be reflected in more than ten separate licensing agreements with participating studio suppliers, and in consideration that the addition of a subscription model could positively impact revenues by many millions of dollars, HHSE Management has elected to disclose the decision to add this option to all VODWIZ supplier agreements. Although the Company has not yet determined the ideal "monthly" subscription rate (or discounted annual rate), management does feel that VODWIZ can operate profitably while still offering a significantly sharper monthly subscription price than is currently available through its principal competitors.
Item 1.01
Entry into a Material Definitive Agreement.
VODWIZ Subscription Model - The Company's newly-launched venture for a "Video-On-Demand" website and IPTV Portal has completed the test-phase of the servicing venture with Nanotech Entertainment. Under the originally structured and announced business model for this new venture, Hannover House titles (along with more than 2,500 titles from other independent distributors, and select major studio suppliers), would be offered to consumers for Video-On-Demand streaming under a "pay-per-transaction" basis. The beta test (involving approximately 50 titles exclusively from the Hannover House library) provided verification of the operational functionality of the venture and PPT model. However, in response to feedback from consumers and from participating studio suppliers, the option of offering consumers a monthly or annualized "subscription" access model (for a pre-determined and modest flat-fee), has been explored for VODWIZ. Principal competitors Hulu Plus, Amazon Prime and Netflix generate a majority of their streaming revenues through this sort of flat-fee subscription model, as compared to the PPT model. After discussing the possibility of offering VODWIZ consumers the option of a monthly or annual subscription with the VODWIZ principal supplier sources, it was determined that a revenue-sharing formula based on the actual monthly transactions for each title (as compared to the total of all transactions for VODWIZ), could serve as a fair mechanism to determine the pro-rata disbursement of subscription revenues across all participating subscription titles. As this subscription model option will be reflected in more than ten separate licensing agreements with participating studio suppliers, and in consideration that the addition of a subscription model could positively impact revenues by many millions of dollars, HHSE Management has elected to disclose the decision to add this option to all VODWIZ supplier agreements. Although the Company has not yet determined the ideal "monthly" subscription rate (or discounted annual rate), management does feel that VODWIZ can operate profitably while still offering a significantly sharper monthly subscription price than is currently available through its principal competitors.
