You have to know the past to see the future; move MelodyVR to a buy
30th July 2020 |
I remember being a kid growing up in Mount Waverley which is a suburb in the south-east of Melbourne. Great place to live, we’d just moved there from Mulgrave, which is another suburb not far away.
Mum and dad had bought some land and built a new house on it. I was about 12 years old at the time I vaguely recall.
I remember that house well, it was actually probably my favourite one growing up. I really didn’t want to move when they decided to sell and we moved to a bigger place in Glen Waverley, again just around the corner.
The thing I liked about Mount Waverley as well was it was close to sports centres, I could walk to the train station to get to school instead of getting a bus, and it was walking distance to a cluster of shops nearby.
The cluster of shops was down on the corner of High St. Road and Blackburn Road. There were a splattering of takeaways, milkbars (what you call an off-licence here) and on one corner occupying a big plot was the local Blockbuster.
It was almost a Friday night ritual that my brother and I would walk down to Blockbuster and get five “weeklies” and an “overnight” movie to watch. If we were lucky enough we’d maybe get some games for the Super Nintendo instead of some of the weeklies.
This was 1995, so believe it or not, it was still VHS rentals from the video store then. DVD were still a couple of years away.
Blockbuster was everywhere in 1995. It was the only place that you could get the latest releases to watch at home. It was huge! It seemed unstoppable. And through the 90s it just got bigger as it started to get DVDs and new generation games for consoles.
It seemed like nothing would stop them.
Same to be said for Nokia. I’ve written about Nokia phones before. I had one… I actually had five I think when I do a count-back. But in the 90s while there were other phone brands, it was all about getting the latest Nokia.
You were effectively an outsider if you decided to rock up to school in the 90s and had something like a Sony Ericsson or something even weirder like an Alcatel.
Again, Nokia stood in a position of utter dominance. There was no way that a company like Nokia would ever be replaced. At the time it was impossible to think that the like of Blockbuster or Nokia would fall so severely from grace.
That’s because at the time any company is at peak dominance, the mere thought of something else taking away so much power, control, market share, profits and limelight is very, very difficult to consider.
But that’s exactly what happens. Time and time and time and time again the seemingly unbreakable giants of industry break, fall, falter and are replaced by new upstarts that seize power and dominance and reboot the cycle.
This happened to the likes of Blockbuster, Nokia, Yahoo!, MySpace, Dell, Atari, Sega and Netscape, just to name a few.
All of these at one point in time dominated an industry. And today either don’t exist at all, or are a shadow of their former selves.
It’s important to recognise these cycles because they will come again. The companies that today might seem impenetrable are really living on borrowed time.
I have this thought discussion regularly with friends. I want to see what their capacity to consider change is like. I ask them what they think will come next when it comes to watching movies or listening to music.
They can’t really understand what I’m asking. And I say, well, what comes after streaming? What comes after choosing a movie on the TV from Amazon Prime for an overnight rental? What comes after Spotify to consume and listen to the latest music?
They don’t know. They can’t even consider that something else will come along at all.
I’m not having a go at them by any means, the point is for most people just thinking about what comes next is almost impossible when there’s something so dominant in place like Netflix, Amazon Prime or Spotify.
But what we can extrapolate is these giants might not die, but they will be challenged and some will be shadows of their former selves over the next decade.
I have a pretty defined view of what comes next in this arena. I’ve been criticised for it previously. But when I explain it to people, they usually have their “a-ha” moment around it all.
Some years ago I was critical of virtual reality. It wasn’t so much a criticism of the technology, but a criticism of the content. As we all know, content is king – or at least we should know that.
Quality of content is everything too.
What you don’t get with movies at home is the “big cinema” experience that you get at the cinema. But you can achieve that with VR. Likewise, when it comes to music, streaming music is certainly going to stick around as a format, but the way in which you consume that format is going to change.
For example, MelodyVR Group (LSE:MVR) delivers live music in VR. Being at a concert, LIVE, to listen to your favourite musicians – no one else is offering this at the same level and quality that MelodyVR does right now.
For example, over the weekend, Nelly (the rapper) did a live concert of his Country Grammar album on the Melody VR platform. It was free. It was also awesome. If you are a fan, you can catch the whole thing on YouTube here and can use your mouse to change the view as you watch it.
Country Grammar was first released by Nelly just over 20 years ago now. The album was massive – I know because I bought it on CD when it was released. It was a Billboard number 1 album in August 2000. And in 2016 it received “Diamond” status by the Recording Industry Association of America (RIAA), which means it shipped more than 10 million copies in the US.
This is what comes next for music. Yep, it’s early stage. And yes, the idea of putting a VR headset on to watch a live concert might be foreign to you right now.
But then again, if you’d asked 12-year-old Sam what he’d think of streaming a song through his phone in 1995, I’m guessing you’d have been met with puzzled looks.
This is the kind of thing I’m always looking for, keeping an eye out for and figuring out if there’s an investment way in. In this sense, I think MelodyVR is one of the most exciting stocks we’ve got.
It might be impossible to consider that a small £64 million company could be a contender to the huge US$48 billion giant like Spotify. But remember, when it seems like a company so big is impossible to break… it inevitably breaks.
I’ve decided to open up the MelodyVR (LSE:MVR) recommendation again, taking it off hold and re-adjusting its buy-up-to price to 5p. The stock is now an active BUY, and if it trades over 5p it will move to a HOLD recommendation.
Also set a trailing stop loss on the stock 50% below your entry price to manage external market shocks and potential volatility in this small-cap pioneer.
Regards,
Sam Volkering
Editor, Frontier Tech Investor
