itvt

–Deal Nets Company £1.4 Million
–Company in Deal with Gaming Ventures

UK-based interactive and participation TV specialist, Cellcast, says that
it has agreed to an exchange of its two channels on the Sky satellite
platform (one of which it says is “surplus to its requirements,” the other
of which serves as an outlet for user-generated programming from its
UGC/video-sharing service, SUMO.tv) in exchange for a new channel
(in a less favorable EPG slot) and a cash consideration of £1.4 million;
the net book value of the two channels was £304,936. The company
says it will use the cash for general working capital, and to repay
£500,000 outstanding under an existing credit facility provided by
Headstart: it has entered an agreement with the latter to pay the amount
outstanding in full before December; in return, Headstart has agreed to
waive its rights of conversion subject to the repayments being made.
(Note: Cellcast bills SUMO.tv as “the world’s first media network to
seamlessly integrate user-generated content into television
programming, Internet and mobile services,” using a “proprietary
technical services architecture”; according to Cellcast, SUMO.tv users
have now created over 3,000 “alternative online channels,” and the
service now attracts over 5 million uniques per month.)

Cellcast has also provided a “trading update” on its various operations:

• It says that its core business continues to “do well in a challenging
  consumer environment.”

• It says that “significant benefits” are flowing back from its investment
  in content and technology for SUMO.tv, particularly in regard to its
  core participation TV applications and formats, and that it is developing
  new revenue streams from the Internet and from 3G mobile services.
  According to the company, its interactive 3G mobile video products
  “saw a 400% increase” over the past 12 months, as a result of growing
  3G handset penetration, increased familiarity with video calling in
  general, and the ease-of-use of 3G video calling services. It says that,
  over the course of this year, it has integrated its 3G video calling
  products with its portfolio of TV channels and Web sites in order to
  offer “yet another level of interaction to existing formats,” and that a
  “fully integrated interactive online and mobile chat and messaging
  platform, incorporating video calling between online Webcam users
  with 3G video callers” is the latest addition to its suite of products. It
  also claims that its 3G traffic and revenue have “more than doubled”
  since last October, and that, in February, for example, that revenue
  amounted to over £35,000 per month (it says its 3G revenues are
  increasing an average of 25% per month).

• It says that Cellcast Asia Holdings, its joint venture with Canaan
  Partners, is “progressing well,” having recently secured agreements
  with BSNL and Tata Telecom, as well as with new broadcaster clients,
  Zoom and B4U. In February, Cellcast says, Cellcast Asia achieved
  profitability at a gross margin level.

• It says that it is satisfied that SUMO.tv is “now very much less
  dependent on its position on Sky’s EPG to sustain and build its user
  base.”

• It says it believes future operating and development costs for
  SUMO.tv will be significantly reduced, now that the first phase of its
  development strategy for the service has been completed.

• It says that, now that SUMO.tv is established in the UK market, it is
  fully engaged in licensing the platform and its aggregated content and
  formats to broadcasters and distributors internationally. According to
  the company, SUMO.tv is now being distributed on the European IPTV
  platform, Zattoo; and on the Vingo.tv platform, which has an audience
  base in over 100 countries. In addition, it says it is currently
  distributing–or will shortly be distributing–SUMO content on a
  number of third-party Web sites, including YouTube, Joost and
  Blinkx.com. It also recently signed a deal to offer SUMO content on
  social networking site, Bebo. In addition, in January, it signed deals to
  distribute SUMO content on the Orange mobile networks in France and
  Israel, and it says it is engaged in discussions to launch the service in
  other markets, including Australia, Malaysia and South Africa.

• It says that it continues to enhance the proprietary technology that
  underlies the SUMO platform. Recent enhancements include “Sumo
  TeleConferencing,” which allows viewers to use regular Webcams or
  3G phones to interact live with a TV host and with one another.

In other Cellcast news: Earlier this year, the company signed a joint
marketing agreement with gaming and entertainment company,
Gaming Ventures. According to the companies, the deal will allow
Gaming Ventures to offer its full range of products to viewers and users
of Cellcast’s UK and international satellite TV, streaming video,
Internet and mobile channels, including the SUMO.tv network; and
Cellcast’s participation TV model will enable Gaming Ventures to
create product sets for Cellcast that “will not be constrained by the
limitations of the ‘red button.’” Gaming Ventures’ mobile gaming
platform is currently available in nine major languages. “We believe
the ubiquitous nature of satellite TV and mobile phone technology has
created opportunities that we will be able to leverage for the mutual
benefit of both companies,” Gaming Ventures COO, David Abbott,
said in a prepared statement. “We have been trialing Gaming Ventures’
products on several of Cellcast’s services for some months. The
demographics are outstanding and the geographic reach of Cellcast is a
huge opportunity for us. We will be launching a number of initiatives
for execution in the coming months that should create new viewers and
revenue streams for both companies.” Added Cellcast CEO, Andrew
Wilson: “Gaming Ventures has a compelling portfolio of games that
range from traditional casino, through skill games, to new lottery
variants that can be tailored to the various demographics of our
channels. As an adjunct to these activities, we are also in the process of aggregating gaming-related short form video content and developing a gaming-related vertical on SUMO.tv.”