Slingbox
INNOVATIVE NEW PRODUCT
Lindell Chew
General Business Purpose
• What is Sling Media, Inc
• A digital lifestyle products company
creating a family of consumer electronics
products that are a natural extension of
today’s digital way of life
• The first member of the Sling Media family
is the award-winning Slingbox™ .
Products
• What is Slingbox• A groundbreaking piece of hardwired ingenuity
that will literally transform the way you watch
television, for only $249.99
• It allows consumers to access their living room
television experience at any time, from any
location.
• Uses a variety of different displays including
laptops and desktop PCs, handheld computers
and smartphones
• Slingbox Intro Video
Price
• $250.00
• No additional monthly or service fees
• Value Pricing
-not too high but still suggests quality
-because consumer takes a risk with
an unknown brand it needs to be
priced to reflect value
Distribution
• Selective
• Available at home website, Comp USA,
and Best Buy.
• Not exclusive so that product would be
available at stores our target market
shops at.
• Not intensive to reflect higher quality.
Existing Competition
• No direct competition
• Indirect competition at the product
category, generic and budget competition
level
–
–
–
–
Hotel Movies and Television
Streaming Online Video
DVD’s
MLB TV
Threat of New Entrants
• Many companies with technological knowhow with large R&D budgets could easily
enter the market pending progressive growth
• Companies with a computer-based platform
(Microsoft, Dell, Hewlett Packard)
• Companies with a television-based platform
(Sony, Hitachi, Samsung)
Problems & Opportunities
• Opportunities
– First to Market – Market Share Supremacy
– Partnership with Texas Instruments and
Microsoft Window digital media
– Internet and cable use (Requirements) are at
an all time high and continue to grow
Problems & Opportunities
• Problems
– Set up/Technology my discourage customers
especially older population
– Power house, entering the market and
Target Market (size)- 3.5 Million
• Cross section of people with cable/satellite TV and high
speed internet
• Affluent, tech savvy business travelers
• Age 25 to 55
• 30 top urban cities
Promotional Mix
 Promotions Subtotal-$4,375,000
Promotional Mix
• 10% of Net Sales
Revenue
Internet
10%
Public Relations
20%
Sales Promotion
10%
Advertising
60%
Promotional Percentages
 Advertising
• 60% of Promotional
Budget
• $2,625,000
• Highest percentage
 Need to create market
awareness
 Need to create positive
image for new product
 Public Relations
• 20% of Promotional
Budget
• $875,000
• Large portion of $
goes to pay staff or
P.R. firm
 Responsible for
maintaining a positive
image towards Slingbox
Promotional Percentages
Cont...
 Internet
• 10% of Promotional
Budget
• $437,500
• Small Percentage:
+ It’s Cheap
+ Lot of “Bang for your
Buck”
-- Can be too Intrusive
 Sales Promotion
• 10% of Promotional
Budget
• $437,500
• Small Percentage:
+ Can persuade
consumers to buy
-- Can be harmful to
image
Advertising Example
SkyMall - Catalog
•
•
•
•
Cost: $92,600
4% of Advertising Budget
Reach: 155,000 passengers per quarter
Positive Attributes:
Captivated audience
Average passenger spends 15 to 30 browsing the
catalog
Best possible way to target business travelers
Advertising Example
Business Travelers News – National
Magazine
• Cost: $404,260/year for 29 issues
½ page tabloid spread ads
• 15% of Advertising Budget
• Reach: 54,800 subscribers
Pass along value/word of mouth would account for
a much higher number being reached.
• Positive Attributes:
Focused directly on corporate business travelers
Public Relations
• Budget – $875,000
• Must be of interest to the audience of the medium
chosen
• Conduits with similar Reader Profiles to Slingbox’s target
market
• Press releases to mediums advertising in as well, like
BTN
• Examples of outlets to release information to:
The Wall Street Journal
• U.S. Circulation – 1,826, 493
• Average age – 50
• Graduated college or more – 76%
• Average household income - $192,324
Fortune Magazine
•
•
•
•
830,000 copies circulated monthly
83% graduated from college
Median household income is $165,200
88% traveled by commercial airline in the
last year
• 91% have a home computer
• 85% are employed in the business,
industry or the profession
Internet Activities
• Links to Slingbox’s website or Banners
ads on TiVo's website Cross promotion
effort
• Banner ads on Business Travelers News
Online, Skyscraper - $1,840 Monthly
• Travelocity
Sales Objectives
• It is projected that in its first year of business
Slingbox will sell to five percent of its total target
market.
• Therefore sales in its first year will total 175,000
units with sales of $43,750,000 in 2006.
• Project a slight increase in sales in following
years
3 Year Projected Income
Statement
2006
2007
2008
$ 43,750,000
$ 44,187,500
$ 44,629,375
Cost of Goods Sold
30,625,000
30,047,500
29,009,094
Advertising
2,625,000
2,386,125
2,142,210
Public Relations
875,000
795,375
714,070
Personal Selling
437,500
397,688
357,035
Sales Promotion
437,500
39,688
357,035
Promotions Subtotal
4,375,000
3,976,875
3,570,350
General & Administrative
1,312,500
1,325,625
1,338,881
218,750
220,938
223,147
Total Expenses
$ 36,531,250
$ 35,570,937
$ 34,141,471
Taxable Income
7,218,750
8,616,562
10,487,904
2,454,375
2,929,631
3,565,887
$ 4,764,375
$ 5,686,931
$ 6,922,017
Revenue:
Net Sales Revenue
Expenses:
Testing/Evaluation
Less: Taxes (34%)
Net Income
NPV, Payback Period and IRR
• NPV - $1,459,619.57
• IRR – 27.96
• Payback Period – 2.19 years, initial invest
of 10.5 million in venture capital secured to
launch product