MELBOURNE, AUSTRALIA: GoConnect (ASX: GCN), a leading global communications company; Cashmere Media Pty Ltd, owner of Australia’s music news and information destination undercover.com.au and PLW Entertainment, the 360 degree artist management, development and production company, all based in Melbourne, Australia, have reached agreement on the merger of their businesses pursuant to the Memorandum of Understanding (MOU) entered into and announced on 1 February, 2010. The directors of GCN are delighted with the agreement and believe that implementation of the agreement will be immediately transformational for the expanded GCN.
Under the agreement, the businesses of Cashmere Media and PLW Entertainmentwill be acquired by way of GCN issuing shares as consideration equivalent to 15% of the expanded GCN for each of the two businesses. The acquisitions will be subject to GCN shareholders’ approval at an extraordinary general meeting (EGM) to be held by early May this year. An information memorandum and notice to shareholders for the calling of the EGM are being prepared.Since the signing of the MOU, the three businesses have been working closely together to develop the best strategy for the expanded GCN, capitalising on the combined expertise, entertainment industry relationships, assets and technologies of the combined group. The combined businesses will create the largest independent music entertainment company in Australia, with a global vision, with the core strategy being the launch of a music IPTV (Internet Protocol Television) channel.
The combined group already has a significant library of music video and audio content which can be readily repurposed for the launch of the IPTV
channel. Initially this channel will be launched in Australia and distributed over a number of platforms including mobile and broadband IPTV platforms which are increasingly embraced by the mobile carriers and smartphone vendors, as well as broadband service providers as their primary marketing strategies. The imminent launch of Telstra’s T-Box IPTV set-top box and the recent offering from Fetch TV for other broadband service providers, indicate that the battle to secure compelling contents for IPTV services is just beginning. However, since GCN owns the global copyright to its content, the company will also explore immediately opportunities for distributing the IPTV channel internationally.
The expanded GCN group will also be conducting a number of businesses that will be providing a range of services and creating products targeting the consumer for the entertainment and advertising markets. These businesses will, not only be providing compelling and original content to the IPTV channel, but they will also be receiving marketing support from the channel.
The combined businesses will be able to leverage on the strengths and resources of the group in digital media to further enhance their competitiveness in the entertainment industry. Talks have already been held in the past few weeks with a number of players in the music and IPTV industries with very positive feedback and support.
GoConnect’s unique and proprietary technologies, GoTrek and m-Vision, as well as its existing multimedia online properties, will form the foundation for international multimedia broadcasting of the IPTV channel, with contents and programs produced by PLW and Undercover, as well as GCN’s Soundcheck.com.au, initially for Australia and China, before expansion into further territories.
The merger will consolidate technology and technical development resources, intellectual properties including artists’ rights, and substantial content copyrights, sales, marketing, promotions, existing entertainment industry relationships, and operations of the three businesses. The consolidation will make the new operations more cost-effective and primed for expansion in Australia, the U.S.A., China and other markets.
