Du och jag förstår varandra, en tyst överenskommelse. Vi stör oss båda på mannen som aldrig håller tyst. Han låter sin djupa kunskapsbank tala högt och ljudligt så att alla ska få höra. Hans något flackande desperata blick andas av en underton av rädsla för att missa något. Säkert är han både med i Motormännen och arrangerar veckans andelstips. Både du och jag skruvar något på oss och förbannar våra platser på rad 6. Vi har inte talats vid men du har beiga kläder och önskar inget annat än att få sova lite.

Motormännens man är vår gemensamme fiende men ingenting, ingenting kan få honom att inte berätta om hur man bäst tar sig från Gatwick eller hur Londons tunnelbana fungerar. Männen "som har koll" är uthålliga, lite lätt svettiga i pannan och aldrig, aldrig tysta. De studsar fram och tillbaka bland säten och kollegor och handlar kaffe och taxfree. Inget kan stoppa denna typ av man, inget förutom den kommande hjärtattacken.

Want to remove the Facebook chat bar? Follow these simple steps and it will be gone in no-time:

1. Install the browser plugin/extension "Stylish" which lets you modify the appearance of a website. (For Chrome | For Firefox)
2. Create a new style in Stylish and call it Hide Facebook chat
3. Edit the style and add the following in the code-box: .fbChatSidebar {display:none!important;visibility:hidden!important;}
4. In the box "Applies to" add the domain facebook.com and hit Save.
5. Reload the website in the browser and you should be good to go!

I woke up this morning with one idea in my head – why has not Headweb been acquired yet and who is a potential buyer? Weird thing to think when you wake up but someone has to be weird and today it was me. Let me give you an introduction to Headweb and then move on to some (huge) speculations.

Headweb is a Swedish VOD service focused at streaming movies on a wide range of platforms. The company was founded in 2006/2007 and resides in Stockholm. Headweb has managed to reach agreements with most film distributors and has a library of about 5000 movies. The company is privately owned.

Please note that I am just a happy customer of Headweb's and have no affiliation with Headweb or the other companies mentioned in this post.

Headweb core assets

-          Distribution agreements with film distributors

-          Technology platform with multiple clients. Obvious B2B and B2C-separation.

-          Agreement with LG on direct integration in LG’s “Smart TV”-products (link)

-          Web portal in multiple languages

-          Well known brand, at least in Sweden

Markets

 Headweb operates primarily in the Nordic countries and claims to be leading in those markets. The service was introduced in Sweden which as assumed to be the primary market. Let’s assume market split Sweden 50%, Denmark 15%, Norway 15%, Finland 15%, Other 5% for future calculations.

Pricing

The pricing model is based on a fixed rental price per movie and varies between 19 and 39 SEK, depending on type and release date. Let’s assume average price of 29 SEK for future calculations.

Margin

The operating margin is rather hard to estimate but let’s use Netflix’s target of 14% (link).

Market size

This section will be the mother of all assumptions but let’s hope we can ballpark it fairly well. Telia Sonera has reported to have 2M rentals in 2010 (link). The overall VOD market is expected to double in 2011 (link). A careful estimate would mean 3M rentals in 2011. Telia has 10% of the total TV-market in Sweden which leads to the conclusion that we can expect a market size of 30M units. One of Headwebs major setbacks has been not to be chosen as a pre-integrated solution in the TV-distributors STBs (set top boxes) which obviously limits the distribution to the consumer. However, Headweb has furiously worked on being present on several consumer platforms such as Plex, Playstation and Boxee. Also, the company has as earlier stated reached an agreement with LG on pre-integration in their Smart-TV-products.

The market size for the online market is estimated to be a 10% of the STB-market, 10M. Headweb is doubtless the dominating actor in this market with an estimated 50% share. For Sweden, that means 0.5M, Denmark 75K, Norway 75K, Finland 75K and Other 25K. All in all, the extrapolated volume could be in the area of 0.75M units the present year.

Revenues and operating income.

Selling 750K units at an average price of 29 SEK yields sales of 21.75M SEK. With an operating margin of 14% the operating income lands at approximately 3M SEK. The gross profit margin is assumed to be around 30% which gives EBIT at around 1 MSEK for 2011. Take that with a grain of salt.

Who could buy Headweb?

My guess is that it will either be a media house (such as Bonnier), a TV-distributor or a Private Equity firm. The media company would obviously find synergies in digital rights and existing platforms and Bonnier would be a good fit. The TV-distributor, such as Comhem, is today not having great margins on the product as such and could leverage higher revenues from owning the B2B-supplier. Having the long arm to consumers with the boxes is naturally valuable. The PE firm would of course look to realize expansion plans and to find synergies among other portfolio assets. With the profile of the last two Comhem would be a potential buyer, since the company is the biggest cable provider in Sweden and owned by a British PE firm. Lastly, I will through in Telia in the mix who are growing a lot in Sweden and abroad in the area of TV and would probably love to stop paying SF Anytime their royalties and to see more than 2500 movies.

What would the price be?

There are a number of competitors but I believe it comes down to the technology platform and the agreements. The profits are probably not that important but so far I believe that Headweb has been able to prove that the business model works and that their platform is capable of servicing high volumes. The market as such will continue to grow rapidly thanks to high speed internet adaption and customer preferences and I do not see it as impossible that Headweb’s sales will multiply over the coming years. My guess is that the buyer will value the core assets and find synergies in own existing B2C-extenders or B2C-agreements (for instance Bonnier delivering premium content to TV-distributors). I will go out on a limb here and suggest a current valuation of 30x EBIT (common 10-50 in internet deals around 2005) or 3x the sales which puts the company at a value of 30-65 MSEK. My guess it towards the higher range, around 60 MSEK. Why not higher? Simply because the current business model is rather easy to copy and the uniqueness is fairly low. Why not lower? The buyer gets a well established brand, modern technology and a quick to market product. In addition, the company operates in a high growth market with few available options to be purchased.

Reasonable?

/F

Do you love to use Hootsuite but are getting sick of the more frequent promoted tweets polluting your stream? You are not alone. The promoted tweets were launched by Twitter in order to capitalize on the huge success of the service. But lately, they've been coming a little too often and eventually I got sick of them.

I started looking for a service that would allow me to do the following:

I am currently listening to GP Bullhound talking about how to move an idea to an exit.

(From listening to a Google representative at Sime 2010 conference in Stockholm)