Sanwire Corporation (OTC Pink: SNWR) is catching the eyes of investors. Based on the company's 2021 performance, that interest should come as no surprise. After all, 2021 marked a year of significant growth for the company, with their wholly-owned subsidiary Intercept Music posting impressive gains across every business metric. And with 2021 now history, the excellent news is that projections call for more of the same, with momentum in place to generate potentially exponential growth this year. Better still, the long-term prognosis, well beyond 2022, is also bullish, as its transformative Intercept Music acquisition earns market traction in a sector worth billions.
And know this. Intercept Music didn't just hit its ambitious targets last year; they also laid the groundwork for a future of sustainable and profitable growth for Sanwire as a whole. Those initiatives helped transform Sanwire into a well-focused organization intent on creating shareholder value for its investors by streamlining its focus and capitalizing on music and entertainment sector revenue-generating opportunities expected to surpass all-time highs reached back in 1999.
Thus, at less than a penny a share, SNWR stock, based on reasonable peer multiples, should be valued multiples higher. And they have the operating results to justify that assumption.
Leveraging The Power Of Intercept Music
Sanwire's crowning achievement was its 2021 acquisition of Intercept Music, an innovative client-focused marketing, distribution, and monetization platform for music artists and labels. And since its integration, Intercept Music has been accretive to the SNWR mission, ushering in new revenue streams and opening the door for SNWR to capitalize on a number of 2022 initiatives. To date, their contribution has been nothing short of impressive.
Since its acquisition by Sanwire, Intercept Music has reported a YoY increase of 70% in gross sales, a 22% increase in per-artist revenue, and $1.1 million in new equity financing. Also, a significant portion of SNWR's convertible debt has been retired, and for all intents and purposes, SNWR entered the new year in its best operating position in history. That's not all. Intercept Music shows no signs of slowing. On the contrary, it's accelerating its growth by doing the right things in the right market at the right time to generate explosive growth through a business model attracting record numbers of new artists and labels.
Earlier this month, Sanwire reported Intercept Music has grown to represent 40 independent music labels and 300 independent artists. It's a significant year-over-year increase and comes on the heels of Intercept Music's expanded services. Now a one-stop-shop for artists and labels, Intercept Music offers a suite of services, including branded online merchandise stores for clients, streaming services, publicity, and massive social media support. By the way, these services create revenue streams for both the artist and Intercept. Thus, when artists do well, Intercept does too. And with new artist and label signings accelerating and with economies of scale gained through its comprehensive platform, the impressive 22% increase in per-artist revenue last year may be a precursor of better things to come.
More Services, More Revenues
That's likely, especially after Intercept Music expanded the scope of its services beyond just online commerce platforms. In a substantial upgrade, Intercept introduced several new marketing services for their clients, with one leveraging its expertise with marketing and software development to offer clients an effective and streamlined platform to enhance social media marketing reach. It's a powerful tool that uses unique software design to enable clients to plan and automate their marketing campaigns. Sounds basic, but it's not. It's a complicated software solution that does two things. First, it does away with the administrative inefficiencies in traditional marketing strategies. And, second, its work results in high margin, cost-effective marketing that generates high-margin revenues.
Of course, for publicly-traded companies, soaring revenues and profits can send share prices soaring. And combining business efficiency with personal service makes Intercept Music's contribution to the SNWR value proposition compelling. The more excellent news is that Intercept Music services and solutions create a win-win proposition for both clients and shareholders. It's easy to see how.
The company's platforms are smartly designed to enhance client services, utilizing automated marketing tools specifically designed to maximize market reach and reduce waste. And they work. Recently, Intercept Music reported a 50% decrease in customer service requests following an update to their customer service support platform. That time-saving drops toward the bottom line. Thus, when people refer to time as money, they are spot on in this case.
But it's not only about profits. Intercept Music understands that every second saved through efficiency can be channeled toward generating more value for the client. And when that happens, Intercept Music benefits from an industry not shy to gossip.
Capturing the Music Distribution Market from Both Angles
In SNWR's case, being talked about can be a boom for business. And happy clients should have plenty to say. In addition to its commerce and advertising platforms, SNWR announced expanding its services to include playlisting and recording.
Why is this announcement a potential revenue-generating game-changer for SNWR? Because streaming music is surging, with reports indicating that over 40% of music is being listened to through services like Spotify, Apple Music (NASDAQ; AAPL), and Amazon Music (NASDAQ: AMZN). And of those listeners using streaming service providers, a substantial portion of that listening comes as part of a playlist.
So, similar to other models, Intercept Music's playlisting service would match clients' music with similar media, allowing a targeted audience of listeners to come in contact with the clients' work. In short, this represents a tremendous opportunity for artists and labels alike as their content will be delivered right into the ears of those who appreciate it most, resulting in more introductions and helping to create an extensive and better-connected following.
That's an excellent addition. But there's more to like. After a long period of dormancy, SNWR is working to tap into the huge and rising demand for physical music recording. In fact, interest in physically recorded media, especially vinyl records, is enjoying a fierce comeback from a following of dedicated consumers generating a new "old" market for how people listen to content. While vinyl isn't a new medium, being early to tap into the potential of the re-emerging market can bring substantial rewards. That focus puts an additional revenue-generating opportunity into SNWR subsidiary crosshairs. Progress updates in that space are imminent.
Of course, the bottom line for SNWR is to create opportunities for its artists to achieve more exposure and recognition for their work. After all, the better they do, the greater the benefit to SNWR.
An Infrastructure To Create Value
And to enhance its bottom line potential, Intercept Music tripled its staff since 2021. The company's marketing department was the biggest beneficiary, adding a new full-time marketing manager and additional team members to meet the demands of a growing client base. They also streamlined operations by reducing redundant overhead through outsourcing PR and investor relations services to specialty vendors. Given SNWR's performance update, those strategies are paying off.
The additional manpower facilitates the most important thing- it allows Intercept Music to focus on the most critical aspects of its service. As previously stated, the company's revamped customer service platform has reduced ticket volume by half, with those savings used to grow its business and attract new talent. SNWR's efficiency has another benefit. It strengthens client loyalty.
Of course, that's important in any sector. But, in the entertainment industry, earning client trust is critical to survival. For inexperienced companies, this isn't easy to do. But, when the company does the right things and proves it can help artists win a Grammy, earn industry nominations, and market and sell content and merchandise, they get the praise that can spread faster than a #1 hit. That's the running reputation for Intercept Music.
And its stellar reputation is timely. Millions of artists are unsigned, and thousands a day a looking for experienced and effective representation. Hence, while investors may be happy to see SNWR performance metrics checking all the right boxes, artists want to see other things. Foremost, they need to know its representation can leverage the power of up-to-date technology, get their content heard, handle the technological work, and create a merchandising platform to market branded products. Then, the icing on the services cake is showing the ability to connect them with music sector specialists to make sure their work is expertly crafted and that their content is aggressively promoted.
SNWR does those things, and the results show. Better still, their hard work and intelligent integrations are attracting a wave of new talent and label signings. From an investor's perspective, that's excellent news.
Keep this in mind, too. SNWR is building a brand capitalizing on an industry often immuned from typical market pressures. In other words, no matter the political or social climate, music survives. Analysts today expect that combined music industry revenues over the next year will surpass all time highs set back in 1999. They note, though, that more than half of this revenue will likely come from the digital side of the market. Thus, it's good to know that Intercept and SNWR have that market covered.
As a matter of fact, its digital platforms may become much more valuable to the company than previously thought, with songs streamed per month skyrocketing by over 300% in the past two years. Thus, being focused on the right markets at the right time will have its advantages. Having the foresight to be there should inspire investor confidence as well.
Penetrating a Record-Setting Market
Moreover, it's good they know that SNWR is forward-thinking and timely to monetize new opportunities. SNWR recently announced exploiting the NFT market potential, supporting artists and labels that rely heavily on merchandise to generate revenue. The somewhat recent introduction of NFTs (Non-Fungible-Tokens) has provided SNWR another way to create appreciable revenue growth.
SNWR's subsidiary is already tapping into an NFT market where sales have exceeded $25 billion. Thus, even as an emerging sector, it's already substantial. And the better news, Intercept Music is exploiting the trend early, with intentions to create yet another multi-million-dollar revenue-generating stream for the company.
Of course, this can take an impressive 2021 and put it on steroids. That's a likely result of SNWR's Intercept Music knowing how to maximize their own interests and keep their artists happy. Unlike competing companies, SNWR, through Intercept, maximizes client revenue potential while allowing its artists and labels to maintain 100% ownership of their work. This sweetens the deal significantly for artists and labels signing with Intercept and seems to have contributed considerably to the company's growth spurt. Moreover, it adds firepower going forward to help its growth curve to steepen.
A Proposition Too Promising to Ignore
Perhaps the best part of SNWR is that its a company in motion. And companies bringing change to the markets typically are the ones that succeed. Thus, while SNWR may trade at penny levels today, the sum of its parts tells another story. SNWR is in hyper-growth mode.
Even better, the milestones reached in 2021 are now positioned to become catalysts in 2022. Hence, SNWR is better positioned than ever to create shareholder value in the coming days, weeks, and months than at any time in its history. Therefore, although its share price may look undervalued today, windows of opportunity don't stay open for too long. Once investors smell success, they pounce on valuation disconnects and close them quickly. It's often why retail investors are often late to a trade, tending to read about them instead of being ahead of them.
But in SNWR's case, this under-the-radar opportunity is still ripe for consideration. So, while evaluating SNWR stock at less than a penny may be a wise consideration, squeezing the investment trigger may be a wiser one. After all, while the stock could still be considered undervalued at three times its current price, notably, the investment thesis would remain the same- higher prices may be warranted. Thus, with SNWR doing the right things with the right assets at the right time, and with operating momentum on its side, this entry point looks attractive.
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