Tags
activist investor, Irish shares, Irish value investing, mobile content, mobile marketing, mobile payment, Pageant Holdings, Ross Conlon, Zamano, ZMNO
Zamano plc (ZMNO:ID, ZMNO:LN) is a leading Irish/UK provider of games, videos, music, apps & other digital content to mobile users (D2C, Direct-To-Consumer), and mobile messaging/marketing solutions for businesses (B2B, Business-To-Business). It’s also terribly misunderstood & neglected – the share price is down 25% in the past six months (vs. the ISEQ up 4%). So, loath as I am, we should first tackle some:
Risks & Misconceptions
i) ‘They just sell ringtones?!’: No, they sell all kinds of digital content. Especially to Millennials, whose attention span’s as fleeting as Lee Evans between twitches – which means they’re a perfect target for the cheap impulse buys Zamano offers.
ii) ‘Oh, and porn!’: No. No. No, they bloody well don’t…
iii) ‘What about smartphones?’: Zamano primarily interacts with users via SMS (plus MMS, WAP, etc.), so smartphones must be killing them, right? Er no, as Portio Research points out: ‘SMS is not dead. SMS is still the king…’. For Zamano, smartphones represent more opportunity than threat:
– The SMS share of the pie may shrink, but the pie keeps growing. More & more people are forgetting their laptops & and are now living online 24/7 via phones (& tablets) – they’re all a potential target market for Zamano. And smartphones have allowed the company to upgrade & customize its D2C content, and to migrate its advertising online, thereby enabling more effective customer acquisition. Like so many tech companies, ZMNO’s really a sales & marketing company – so management’s ultimately agnostic, they’ll embrace whatever technology(s) deliver the best revenue/profit opportunities.
– If that’s via apps, that’s OK too… Because people have to get paid eventually, free/dollar apps won’t hack it, especially when it comes to regularly updated content. Maybe in-game/app purchases & advertising become the norm, but I suspect we’ll see an inevitable migration (back) to a subscription model – a far more stable/valuable revenue stream for companies. Just look at the evolution of online music: Downloading’s dead now, streaming’s where it’s at…maybe even Apple’s finally got the message!
– As for Zamano’s B2B business, SMS will be an attractive marketing tool for years to come. I mean, when did you last read your spam email? But we all still love that little dopamine fix when a new text message pings…we can’t help reading it! For companies, SMS is a simple, immediate & compelling medium for reaching out & marketing to customers. Combine it with geolocation and/or mobile payment technologies, and it offers intriguing new opportunities.
iv) ‘Don’t they have a crap reputation?’: Sure…if you want to believe the trolls. Yes, how dare they charge for that sub. you forgot about? Why don’t you complain about the skinny jeans you bought last week too, or the hangover you spent good money on last night? I blame the chattering classes – they tut-tut over the hoi polloi buying such chavtastic tat. Then we have nanny regulators like Comreg, who act like they’re waging a holy war to atone for the sins of the Irish banking regulator… Yes, Zamano has to compete with some dodgy rivals, but it also has a fiduciary duty to its investors. Shady practices might appear tempting, but when you consider the risks for a listed company…it’s never worth it. And because ZMNO’s listed (& highly visible), the regulator inevitably targets them first. I’m confident we can rely on management to maintain standards & compliance accordingly.
