Role and company:CEO of cloud-based music service Omnifone
Company turnover (and most recent ebitda/most relevant profitability metric):Year ended 30th April 2012: revenue £29.5m (increased by 118 per cent from £13.5 million). Profit of £3.8m EBIDTA.
Growth forecast for the next three years:We expect our profit for this year to be larger than last with continued revenue growth. We’re in a very high growth market that is accelerating. Analysts predict that the global digital music market is expected to grow at 15 per cent annually, reaching nearly USD$22.5bn by 2017. In the UK alone it is expected that streaming revenues will grow at over four times the rate of online music downloads this year, increasing Britain’s digital music spend by £51m to £411m.
In under 50 words, what makes your business distinctive in its marketplace:We develop, license and manage cloud-based streaming music services for our partners which are major global consumer brands. Our core technology platform, MusicStation, powers music services on more devices and in more countries than any other B2B music provider in the world. Our partners include Sony MusicUnlimited, BBM Music, Spotify for content management services, and UK streaming service rara.com which comes bundled with most HP PCs and Lenovo Windows 8, Android devices and PCs
What’s the big vision for your business?Our vision is to continue to drive the growth of legitimate digital music services around the world through partnerships with rights holders and global consumer brands. We aim to extend our technical lead in digital music service provision and licencing for all companies who understand the importance of scale and global footprint.
Current level of international business, and future aspirations:Our core platform, MusicStation, powers major global music services in 28 countries and offers a growing catalogue of over 22 million tracks. In each country where we launch a music service on behalf of our partners, we focus on ensuring the catalogue includes both international and local music to make it appealing to everyone. We also ensure that the service is fully localised by ensuring the editorials, bios etc. are in the local language. Moving forward, our aim is to strengthen our leadership in established markets, such as the US and Europe, and extend our global footprint through new partnerships with large global brands and smaller music services in developing economies such as Asia and Latin America.
What makes you mad in business today?Mad is a strong word, but I do get frustrated by how our banks’ appetite for risk has almost evaporated as a consequence of the banking crisis. As a result it is almost impossible for new and growing businesses to access growth capital when they need it most.
What will be the biggest change in your market in the next three years?Any device which is capable of being connected (car, homes, tablets, PCs, mobile) will become a platform for cloud based services. Music will be at the forefront of these services and digital subscription music (stand alone or in a bundled with other services) will become the normal way people consume music.
Can businesses in your sector/industry access the finance they need to grow? If not, what can be done to improve things?In some countries access to capital for small growing businesses is easier than in others. While I applaud all efforts by the UK government to open up the debt markets to smaller companies who need financing, the single biggest step that could be taken to improve investment (and capital flow) into business is to make capital gains tax lower to compete with the US and other countries. Investors who are willing to put capital at risk because they believe in a business or management team, should be allowed to make a return on this investment with competitive capital gains. Small business and entrepreneurs make up a large part of the UK work force, and the tax revenues which can be derived from successful businesses increasing employment far outweigh any nominal gain which can be achieved by having an artificially high capital gains rate (as we do today). It simply drives investment and new business into other countries.
How would others describe your leadership style?I would say that I am open and direct with my team, and expect the same in return – always. I am inclusive, and want to be dealt with in return in a transparent and honest way. I do not tolerate less.
Your biggest personal extravagance?Travel. I love to travel.
You’ve got two minutes with the prime minister. Tell him how best to set the UK’s independent, entrepreneurial businesses free to prosper:Without meaning to sound repetitive – but it would not take me two minutes. Lower capital gains tax now and encourage people to invest and grow small businesses. Lower the top rate of taxes to encourage those people who can invest in small businesses to stay in the UK. Both things would generate revenue and push back into the private sector the burdens that the government seems to have taken on.
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