NWZ Looks to Break the Mould of Traditional News Broadcasting

NewZulu Ltd (ASX:NWZ), an ASX-listed tech company is pushing ahead with its ambitious global expansion plans having raised over $14M and signing no less than 12 regional content distribution deals so far in 2015.

Since 2012, NWZ has established itself as a leading crowd-sourced media company, boasting over 8.2 million contributors and a community of more than 200,000 professional freelance journalists.

In February 2015, NWZ announced a successful $11.5M capital raising and soon followed up with a heavily oversubscribed $2.6M placement to institutions and sophisticated investors in April.

Currently capped at $40M, NWZ has earmarked a strategic global expansion strategy with prime focus on the United States and Canada.

Earlier this year, NWZ acquired Filemobile Inc for $5M – a Toronto-based user-generated content marketing software company. The acquisition is expected to provide NWZ with traction in North America where more than 50% of NWZ’s revenues are already derived.

NWZ is rapidly expanding the number of channels its platform has access to by signing partnership deals with major media organisations across the globe. NWZ has Fox News, USA Today, and the Wall St Journal on-board implementing NWZ’s platform when sourcing news content with more media sources expected to come online later this year.

NWZ is able to geo-locate which of their members are in close proximity to an unfolding event, alert them, and receive live video footage directly from a smartphone – to be relayed to national TV channels or online media outlets. Other content such as photographs and recorded footage is also used, archived and sold to subscribers.

Most recently, NWZ entered into a confidential agreement with a major (as yet unnamed) Australian media company to license the usage of the ‘NewZulu Platform’ and ‘NewZulu Live’ products. It’s the first agreement of its kind in the region and is anticipated to generate a revenue stream of approximately $500,000-$1,600,000 per year for the company.

Under the agreement, the media group will provide 300 of its staff reporters with ‘NewZulu Live Reporter Kits’ to facilitate NWZ’s strategy of submitting news content sourced from mobile phones.

The agreement is subject to a 12 week trial period before being extended for 2 years. Over that time, professional journalists, photographers and videographers will use NWZ’s technology as well as sourcing content from existing subscribers.

NWZ is aiming to distribute their crowd sourced content as widely as possible, and to this end has secured partnerships with Getty Images, Alamy, Agence France-Presse (AFP) in France, Press Association (PA) in the UK and Ireland, ddp images in Germany, Canadian Press (CP) in Canada, Australian Associated Press (AAP), Czech News Agency (CTK) in the Czech Republic and Aflo Co., Ltd in Japan.

The partnership with Getty Images includes the creation of ‘The Newzulu Collection’, exhibited at gettyimages.com, thereby making NWZ’s crowd-sourced content available to Getty’s global customer base of more than 1.5 million customers.

In another recent partnership with Alamy, the world’s largest online photo agency for stock, video and live news, NWZ’s entire news archive will be featured among Alamy’s own collection of over 50 million images that has generated $154M in total revenue for Alamy.

NWZ’s latest syndication agreement was signed with Videoplugger, to allow NWZ to extend the reach of its BoomZulu and SportsZulu brands.

Foundation for Growth

NWZ’s platform has been built around AFP’s technology first developed over a decade ago, with research and development costs reaching as high as €40M. Having done a deal to secure AFP’s technology as its own, NWZ is now operating 9 bureaus in 7 cities across 4 different countries.

Currently, Associated Press (AP), Agence France-Presse (AFP) and Reuters dominate the news wire playing field, and NWZ are setting their sights on emulating the ‘Big Three’ by establishing themselves as “the 4th largest news agency in the World”, according to NWZ Executive Chairman Alex Hartman.

NewZulu Executive Chairman, Alexander Hartman

NWZ generates revenue from three specific sources: citizen journalist submissions, licensing and live broadcasting. In a periodic update, NWZ recently announced a 46.7% increase in social media impressions, 451,000 increase in uploads and monthly content sales averaging $15,000 per month.

Going forward, NWZ has earmarked the takeover of ‘Octiplex’, a prominent developer of mobile phone applications. The pair already work closely on existing development but a takeover will optimise NWZ’s ongoing cost base. The acquisition is expected to formulate NWZ’s Mobile department, concentrating on producing bespoke mobile apps for existing partners, clients and media outlets.

When the transaction is completed later this year, ‘Octiplex’ will be acquired at 2.6x EBITDA for €725,000 (A$1.06M) equally split between cash and shares. The deal is likely to strengthen NWZ’s software development capabilities, reduce future costs and closer align its working relationship with internet powerhouses Apple and Google.

NWZ’s technology will be put to the test in the coming months and years as globally significant events continue to ensue while the amount of contributors sees consistent growth, backed by affiliate and white-label take-up.

In a recent interview, NWZ Executive Chairman Alex Hartman hinted, “In the future we will be able to talk about very significant US broadcasters using our platform”, and adding, “...our coverage of next year’s US Presidential election will demonstrate just what crowd-sourcing is capable of”.