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MOVIE TRAILER GALAXY, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations.
(Edgar Glimpses Via Acquire Media NewsEdge) The following discussion provides information which management believes is
relevant to an assessment and understanding of our results of operations and
financial condition. The discussion should be read along with our financial
statements and notes thereto contained elsewhere in this Report. The following
discussion and analysis contains forward-looking statements, which involve risks
and uncertainties. Our actual results may differ significantly from the results,
expectations and plans discussed in these forward-looking statements.
Overview
We were incorporated in the State of Nevada on April 27, 2010 as Movie Trailer
Galaxy, Inc. and are based in Studio City, California. We are a development
stage company and have not commenced operations. We are proceeding with our
business plan by providing moviegoers with a comprehensive portal to preview the
latest movie information. We have begun taking certain steps in furtherance of
our business plan by constructing and updating our website.
Our website, www.movietrailergalaxy.com, serves as a movie blog which displays
the latest movies, trailers and box office information. The website will be
fully automated, gathering information from official movie website sources such
as the Internet Movie Database ("IMDB"), Yahoo Movies and Youtube. We have
received a going concern opinion from our auditor. We anticipate that we will be
able to generate revenue through website advertisements via the use of Google
Adsense, as well as through Amazon banner advertisements, which will provide for
payments on a per click basis.
We do not consider our self a blank check company and we do not have any plan,
arrangement, or understanding to engage in a merger or acquisition with any
other entity. We do not consider ourselves a blank check company, as we have a
specific business plan and have moved forward with our business operations.
Specifically we, while in the development stage, are proceeding with our
business plan by constructing and implementing an automated website. We have
taken certain steps in furtherance of this business plan including establishing
the website and programming. As of the date hereof, we have integrated Amazon
and Google accounts and ads to our website, and we hope to start generating
revenues.
Business Strategy and Objectives
Our blog is powered by a growing web portal resource for movie information
communications enthusiasts based on the development of new movies to online
technology. We plan to provide up-to-date information for movie lovers and
access to related products through our website, MovieTrailerGalaxy.com. Our
mission is to become the movie lover's online hub in the global market. We
intend to spread our reach throughout the global world as we empower the movie
enthusiast's culture. At Movie Trailer Galaxy, Inc., we intend to strive to give
the Movie Enthusiast's community a way to support each other and benefit from
one another.
We have objectives in order to fulfill our desire to participate and achieve an
ever-growing market share of the exciting industry that it is entering. These
key objectives include:
1. Establishing ourselves throughout the Global world as the movie
lover's online hub of choice, and penetrate the market in the
business of providing education, information, and networking ability
from the Web Portal.
2. Utilize creative, first-class public relations, advertising, and
marketing to raise public awareness of the site.
3. Develop management capabilities to ensure a strong foundation for
participation in a rapidly growing company.
Our Operating Strategy
Our website is being programmed to display the latest movies, trailers and box
office information. The website will be fully automated and will not require
user interaction for maintenance. We will achieve the automated update process
by implementing custom made scripts that will gather information from official
movie sources like IMDB, Yahoo Movies and YouTube. The update script will run
every day and should not affect the site's availability during the process, as
we expect it to takes about 10-20 seconds to complete.
Information such as posters, trailer links and movie information, will be stored
in the internal database. The links for the movie trailers will be stored in the
database and the actual trailers will stream directly from the source in the
form of links. This process is similar to what bloggers do to get their content.
Bloggers find information on the internet from various sources, and if it
contains video, they can simply embed it in their blogs or link directly to it.
Our website links to the actual movie trailers hosted at IMDB, Yahoo or YouTube
using a "light box" or "iframe" that elegantly displays the trailers without the
user having to leave our site. Linking the trailers saves money on hosting
expenses, as video streaming requires costly high-capacity servers. Our website
can be hosted in a shared hosting environment, which typically costs
approximately $10-$25 per month. The website includes a 600+ movie database, the
automation script, the domain name, an on-line function which allows the user to
add, edit, and delete individual movies and the information.
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--------------------------------------------------------------------------------There is no guarantee that anyone will visit the site. Our initial focus is to
provide movie trailers of the latest movies, and then branch into foreign movies
as well. We feel there is a market for previewing all movie trailers on one
site.
We believe the world of video communications enthusiasts comprises a lot of
people, from amateurs, to expert professionals. We believe that a website which
provides such resources is likely to become a popular online destination point
for consumers in the global market.
Competition
The industry we intend to compete in is the Movie Trailer industry. We have
competition from various other websites that offer similar services such as
themovieblog.com, moviesblog.mtv.com, and ugo.com/movies. We intend to compete
with other movie trailer websites by implementing our marketing plan.
Marketing Plan and Overview
MovieTrailerGalaxy.com has a comprehensive marketing plan which includes online
and industry magazine advertising, search engine articles, radio spots,
podcasts, and press pieces. In addition, we will advertise to our customers
through video email and video cell phone transmissions. We expect that our
current customers will recommend and refer us to other target users. We have
chosen this strategy because we believe it represents the most efficient
correlation of costs, communication to our target market, and brand recognition.
We intend to promote our business operations through a comprehensive marketing
plan including search engine optimization ("SEO"), online advertising, viral
marketing, social networking, blogs, various industry magazines, search engine
articles, radio spots, podcasts, press pieces, and pieces in interest-specific
magazines. In addition, we plan to emphasize spreading important messages
through video email and video cell phone transmissions to users.
We have chosen this strategy because it represents the most efficient
correlation of costs, communication to our target market, and brand recognition.
We intend to continue to monitor how this translates to sales and will be open
to experimenting with alternative opportunities for increasing sales. We also
place a great emphasis on our ability to generate good word-of-mouth business
among our target users.
We believe our primary role in the marketplace is being a provider of a
preferred Movie Lovers Online Destination. We want our target users to think
about us whenever they think about new movie releases or finding great deals in
the industry. We want them to choose to visit with us because it will facilitate
their deal-making and love of movies in exciting ways.
Our management believes very strongly in finding the most cost-effective ways to
market and promote the Company. We will base our promotion strategy on a
combination of online marketing strategies. We will utilize internet presence in
conjunction with search engine methodology, and good word-of-mouth advertising.
We will emphasize video email and cell phone transmissions of important messages
to users. The company also places great emphasis on the training of key
personnel and employees such that they represent a continual promotion
opportunity for the company. We expect our single greatest promotional tool will
be the good will and positive word-of-mouth advertising we generate among our
individual users and our businesses. Our promotion strategy is based in serving
our target users.
Search Engine Optimization
Our website is already optimized for search engines (SEO). This helps search
engines like Google, Yahoo, and Bing to properly index our site. We anticipate
that after we start marketing our site we will see noticeable increases and
decreases in our website traffic daily. We believe this is typical in the
marketing phase. Once our site is fully automated, we will concentrate on the
marketing of the website.
Our Pricing Strategy
We seek a balance between quality of offering, price, and the value that may be
derived from the competition. We believe we offer the best balance of these
aspects in the minds of our target users. Our pricing strategy is linked to our
value proposition and our sales, and marketing strategies highlight this
connection in ways that are easy for target users to understand. Ultimately, our
goal is for our target users equate MovieTrailerGalaxy.com with great value.
Promotion Strategy
Our management believes strongly in finding the most cost-effective ways to
market and promote the offerings. We will base our promotion strategy on a
combination of online marketing strategies. We will utilize internet presence in
conjunction with search engine methodology, and word-of-mouth advertising. We
will emphasize video email and cell phone transmissions of important messages to
users.
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--------------------------------------------------------------------------------Our single greatest promotional tool will be the goodwill and positive
word-of-mouth advertising we generate among our individual users and our
businesses. Our promotion strategy is based in serving our target users. We
believe that if we make sure that our target users are fulfilled and satisfied
with their purchase, then every marketing or sales program we utilize will
resonate with our ethic of service.
Sales Strategy
We have one channel of sales: online. We intend to grow our sales force to meet
our sales and revenue goals. Our web portal will be our critical sales channel
for our Company. We plan to view our sales strategy as being partially fulfilled
through the implementation of our marketing plan, which includes print ads, and
internet advertising. We will consider i.) our key personnel, and ii.) our
existing clientele, to be the most important assets of our sales strategy.
Revenue
In order to generate revenue, we have established accounts with Google Adsense
and an Amazon Store. Google Adsense ads pay on a per click basis. As of the date
hereof, we have integrated Amazon and Google accounts and ads to our website,
and we hope to start generating revenues. When the Google Adsense and Amazon
Store accounts are linked to our website, every time a user enters our website,
Google will display relevant ads to the user and if the user clicks the ad, we
will get paid a percentage of what Google charges to the advertiser. The movie
entertainment niche has high-paying keywords on the Google Adsense network. We
expect to see individual clicks paying more than one dollar in this niche. Top
advertisers include movie rental services and TV providers such as Netflix,
Blockbuster, DirecTV, Dish Network, individual Movie studios and many more. All
the ads displayed by Google are fetched automatically and displayed in our
website. All we need is a Google Adsense account. The Amazon store runs on
autopilot also, and pays us a flat commission on every item purchased by our
visitors.
We also plan to display Amazon banners throughout the whole website. We intend
to have an Amazon affiliate account. Furthermore, our ad system is scalable such
that we can virtually integrate any kind of ad, lead, or CAP network into the
site. We can also sell banner ads privately or adapt any other type of
monetization method. The website is already optimized for search engines (SEO).
This helps search engines like Google, Yahoo, Bing, etc. to properly index our
site as we start creating back links and submitting our site to various
directories. After we start marketing our site and creating back links, we will
start seeing traffic spikes go up and down every day. This is very normal in the
marketing phase and every site will experience the so called "Google dance"
after it starts to take off. The site will get traffic even if it is not
marketed at all, as new movies and more content get added weekly; this is one of
the many advantages of the Word press platform, Google likes its structure and
will keep indexing the new content.
We plan to offer Trailers of Foreign Movies as well, and targeting International
markets such as Bollywood in India, the largest movie industry in the world. We
also plan to offer Movie News, and interactive functionality with other social
networks (such as Facebook and MySpace) with certain unique movie-related
abilities for advertising.
Employees
As of the date hereof, we have no full time employees. Our President and sole
officer and director spends approximately 20 hours per week on Company
matters. We plan to employ more qualified employees in the near future.
Results of Operations For the Quarterly Period Ended February 29, 2012.
Revenues and Cost of Revenues. We had no revenues or cost of revenues for the
period ended February 29, 2012. We are in the formation stage as our business
was formed on April 27, 2010 and no revenue activities have yet begun.
Operating Expenses. For the period ended February 29, 2012 we incurred a total
of $15,941 in operating expenses, comprised of Compensation expenses of $3,000,
Professional Fee expenses of $12,679, and General and Administrative expenses of
$262. In comparison, for the period ended February 28, 2011 we incurred a total
of $17,281 in operating expenses, comprised of Compensation expenses of $1,500,
Professional Fee expenses of $14,067, and General and Administrative expenses of
$214. The reason for the decrease in operating expenses was our legal and
accounting fees decreased
Liquidity and Capital Resources
Our cash and cash equivalents totaled approximately $46 at February 29, 2012.
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--------------------------------------------------------------------------------Net Cash Used in Operating Activities. We had ($7,537) cash used in operating
activities for the six months ended February 29, 2012, as compared to ($11,464)
cash used in operating activities for the six months ended February 28, 2011.
The reason for the decrease in net cash used in operating activities is we have
operating expenses and we are unable to generate revenue
Net Cash Provided By/Used in Investing Activities. We did not use cash in
investing activities for the six months ended February 29, 2012.
Net Cash Provided By Financing Activities. We generated $5,500 from financing
activities for the six months ended February 29, 2012.
Critical Accounting Policies
None.
Recent Accounting Pronouncements
In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05
"Comprehensive Income" ("ASU 2011-05"), which was the result of a joint project
with the IASB and amends the guidance in ASC 220, Comprehensive Income, by
eliminating the option to present components of other comprehensive income (OCI)
in the statement of stockholders' equity. Instead, the new guidance now gives
entities the option to present all non-owner changes in stockholders' equity
either as a single continuous statement of comprehensive income or as two
separate but consecutive statements. Regardless of whether an entity chooses to
present comprehensive income in a single continuous statement or in two separate
but consecutive statements, the amendments require entities to present all
reclassification adjustments from OCI to net income on the face of the statement
of comprehensive income.
The amendments in this Update should be applied retrospectively and are
effective for public entity for fiscal years, and interim periods within those
years, beginning after December 15, 2011.
In September 2011, the FASB issued the FASB Accounting Standards Update No.
2011-08 "Intangibles-Goodwill and Other: Testing Goodwill for Impairment" ("ASU
2011-08"). This Update is to simplify how public and nonpublic entities test
goodwill for impairment. The amendments permit an entity to first assess
qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying amount as a basis for
determining whether it is necessary to perform the two-step goodwill impairment
test described in Topic 350. Under the amendments in this Update, an entity is
not required to calculate the fair value of a reporting unit unless the entity
determines that it is more likely than not that its fair value is less than its
carrying amount.
The guidance is effective for interim and annual periods beginning on or after
December 15, 2011. Early adoption is permitted.
In December 2011, the FASB issued the FASB Accounting Standards Update No.
2011-10 "Property, Plant and Equipment: Derecognition of in Substance Real
Estate-a Scope Clarification" ("ASU 2011-09"). This Update is to resolve the
diversity in practice as to how financial statements have been reflecting
circumstances when parent company reporting entities cease to have controlling
financial interests in subsidiaries that are in substance real estate, where the
situation arises as a result of default on nonrecourse debt of the subsidiaries.
The amended guidance is effective for annual reporting periods ending after June
15, 2012 for public entities. Early adoption is permitted.
In December 2011, the FASB issued the FASB Accounting Standards Update No.
2011-11 "Balance Sheet: Disclosures about Offsetting Assets and Liabilities"
("ASU 2011-11"). This Update requires an entity to disclose information about
offsetting and related arrangements to enable users of its financial statements
to understand the effect of those arrangements on its financial position. The
objective of this disclosure is to facilitate comparison between those entities
that prepare their financial statements on the basis of U.S. GAAP and those
entities that prepare their financial statements on the basis of IFRS.
The amended guidance is effective for annual reporting periods beginning on or
after January 1, 2013, and interim periods within those annual periods.
In December 2011, the FASB issued the FASB Accounting Standards Update No.
2011-12 "Comprehensive Income: Deferral of the Effective Date for Amendments to
the Presentation of Reclassifications of Items Out of Accumulated Other
Comprehensive Income in Accounting Standards Update No. 2011-05" ("ASU
2011-12"). This Update is a deferral of the effective date pertaining to
reclassification adjustments out of accumulated other comprehensive income in
ASU 2011-05. FASB is to going to reassess the costs and benefits of those
provisions in ASU 2011-05 related to reclassifications out of accumulated other
comprehensive income. Due to the time required to properly make such a
reassessment and to evaluate alternative presentation formats, the FASB decided
that it is necessary to reinstate the requirements for the presentation of
reclassifications out of accumulated other comprehensive income that were in
place before the issuance of Update 2011-05.
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--------------------------------------------------------------------------------All other requirements in Update 2011-05 are not affected by this Update,
including the requirement to report comprehensive income either in a single
continuous financial statement or in two separate but consecutive financial
statements. Public entities should apply these requirements for fiscal years,
and interim periods within those years, beginning after December 15, 2011.
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying financial statements.
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