3. I N T R O D U C T I O N
This project is owned by W2B Publishing LLC (Partnership), which is a
partnership that was formed on June 17, 2008 between Msrs Michael
Wollner, Ray Wyman Jr and Gary Bedian (Partners) with offices located
at 345 South Figueroa Street, Suite 101, Los Angeles, California 90071.
4. I N T R O D U C T I O N
The Partners acquired angel funding with the goal to begin work on forming
a market driven luxury lifestyles publishing corporation that generates
revenue from advertising, affiliate luxury travel packaging, and traditional
and non-traditional trade publishing services.
5. I N T R O D U C T I O N
THE BUSINESS
The Partners will form PEN MEDIA, INC., a California Corporation
(Corporation) with its primary offices located in Buena Park, CA – the
current location of WollnerStudios, Inc.
6. I N T R O D U C T I O N
REST MAGAZINE™
The Partners have already begun production of the
first publication, called “Rest Magazine.”
7. I N T R O D U C T I O N
REST MAGAZINE™ is a modern, niche travel lifestyle monthly publication
that features upscale boutique hotels, resorts, spas and restaurants. Its
mission will be to narrate the art of rest and relaxation for a well-heeled
audience of ‘global nomads’ that enjoys every aspect of the world we unfold
in our pages: from the Americas, to Europe, and parts of Arabia and Asia.
9. V I S U A L C O N C E P T
REST Magazine’s visual language will be simple and
contemporary. It will stand out in any newsstand environment
amongst the standard myriad of colors and pictures. REST
Magazine will be the oasis of magazines. The place to go for
some real R&R and a new relevant but yet original experience.
An experience as unique as the things we write about.
17. S T R A T E G Y
It is well-known that newspapers and news magazines are in trouble and that
Internet advertising is experiencing phenomenal growth. However, a very
different picture is forming for specialty magazines, aka “Niche Magazines.”
Later, we will demonstrate how current advertising spending is supporting
print consumer ‘niche’ magazines. We will also show how our strategy will
build a ‘revenue-driven’ niche marketing publishing corporation supported by
key three strategies:
19. S T R A T E G Y
1. Ascertain well-defined Niche audiences.
20. S T R A T E G Y
1. Ascertain well-defined Niche audiences.
2. Create quality publications.
21. S T R A T E G Y
1. Ascertain well-defined Niche audiences.
2. Create quality publications.
3. Build robust Internet functionality that encourages
high reader/advertiser interaction.
22. S T R A T E G Y
A ‘revenue-driven’ niche marketing publishing corporation is another way
of saying that the Partners have their attention fixed on how the
Corporation will earn positive revenue quickly and efficiently. The key is
reader/advertiser interaction – communication and exchange between our
two most important audiences.
24. The Partners intend to prepare the private placement offering after the
creation of a full business plan, printing of a full-sized sample copy of REST
magazine and the launching of a semi-operational demonstration website. We
will test the magazine during the industry-wide 2008 Lodging Conference that
will be held in Scottsdale, Arizona held in mid-September. The Partners expect
to release about 1,200 copies of the sample copy of REST to potential
advertisers (hotel executives and owners) and other opinion leaders.
26. A G R O W T H M A R K E T
NATIONAL REAL ESTATE INVESTOR
magazine recently conducted a survey of 244
prominent developer/owners regarding what
they expect from BOUTIQUE HOTELS
properties.
27. A G R O W T H M A R K E T
55% said that they expect BOUTIQUE
HOTELS will become a new major
segment in the Lodging and Hospitality
industry.
24% said that they expect BOUTIQUE
HOTELS will replace an existing hotel
segment.
17% said they expect no changes at all.
4% had no opinion.
28. A G R O W T H M A R K E T
quot;There are about 4.5 million hotel rooms in the U.S. !
Boutique hotels account for 1% of the supply [but]
demand is a multiple of that figure. There is
potential for boutique hotels to account for 3% to 5%
of all hotel supply over the next 10 or 15 years.quot;
Michael Depatie, CEO, Kimpton Hotels
29. A G R O W T H M A R K E T
quot;... the message is short and simple - customization,
personalization, exclusivity; only the best will do for
this breed of consumer.quot;
Mark Penn, author, quot;Microtrends: The Small Forces
Behind Tomorrow's Big Changesquot;
31. O U R M A R K E T
REST MAGAZINE audience has 49.3 million people
aged 28 to 39 and extends to other generations
where appreciation and patronization of Boutique
Hotels and luxury services is occurring with
greater frequency.
32. O U R M A R K E T
Our audience has a total
buying power of $1.4 trillion
Our audience spends 12% more on
entertainment and leisure time
than the typical American
consumer .
33. O U R M A R K E T
Much of our audience has already or is just now entering
their peak income-earning years.
This is the audience that will dominate the business tourism
segment for the foreseeable future.
34. O U R M A R K E T
In 2006, our audience spent:
$22,300 on wines and spirits.
$21,700 on spas and home spa services, personal trainers and massages.
$91,100 on jewelry.
$61,200 on hotels and resorts.
35. O U R M A R K E T
Gen X
quot; 49.3 million people are included in GenX and they
are aged 28 to 39.
quot; GenX contains 35% fewer people than the Baby
Boomers Generation and is!32% smaller than
‘Generation Y’ or the ‘Echo Boom’ generation.
quot; GenX has a total buying power of $1.4 trillion.
quot; 81% of GenX are employed full or part time.
quot; On average, GenX spends 12% more on
entertainment than the!typical American
consumer (Reynolds, 2004).
quot; GenX is just now entering its peak income-
earning years and now dominate the business
tourism segment.
36. O U R M A R K E T
U Gen
quot; uGen resembles GenX in terms of its income and
spending habits (especially on the high end).
quot; uGen also helps bridge the gap between GenX
and other generations (Boomers, GenY)
quot; uGen extends our reach to late Boomers (aged
50 to 60) and GenY (aged 40 to 49).
quot; uGen Theory also postulates that the higher the
economic/education values are, the more impact
tech change has had on their lifestyle; mainly
because they are more like to be first or ‘near
first’ adopters.
quot; On average, GenX spends 12% more on
entertainment than the!typical American
consumer (Reynolds, 2004).
38. T H E N I C H E S T R A T E G Y
A WELL-DEFINED NICHE.
We will cater to well-heeled 'global nomads'
whose interest is upscale travel to all parts of
the world where they feel safe and
excitement; people who love to surround
themselves with excitement, intrigue and
style.
39. T H E N I C H E S T R A T E G Y
A QUALITY PUBLICATION and EXCELLENT CONTENT
The magazine will be well-planned, well-written, well-edited and
well-designed. Each issue will be an expression of excellence and
exclusivity; our own brand of sophistication and refinement. Think
of other historical 'photogenic' publications such as National
Geographic, LOOK and LIFE. REST will evoke that kind of
attention.
40. T H E N I C H E S T R A T E G Y
Robust Internet functionality that encourages
high reader/advertiser interaction.
Traditional publishing and the Internet will
complement each other. REST will have a website
that will be community driven and revenue-seeking:
community media, virtual publishing, personalized
content, affiliate marketing - whatever we can do to
build a total experience on and offline.
42. P U B L I S H I N G T R E N D S
CIRCULATION IS UP
According to Publishing Trends, MediaFinder®
and the National Directory of Magazines, the
circulation for luxury lifestyle magazines has
grown steadily 28% since a decline in 2001.
43. P U B L I S H I N G T R E N D S
PRODUCTION IS UP
According to MediaFinder®, the second-largest
category for new magazine launches in 2007 was
the luxury category, with 36 new magazines,
cutting across many different subject
classifications. The top spot was held by regional
lifestyle magazines.
44. P U B L I S H I N G T R E N D S
quot;We've seen tremendous growth in niche
publications, including affluent publications,
with new titles such as X-ology, covering
technology and affluent lifestyle... which
features luxury homes and travel...quot;
Deborah Striplin,
Editorial Director of The Standard Periodical
Directory.
45. P U B L I S H I N G T R E N D S
REVENUES ARE UP
$1.16B Advertising Revenue for Magazines servicing the Hotel
and Resort consumer in 2007 And for the 4th consecutive year,
Internet advertising revenues post record results with $21.2B, up
26% over 2006 revenues.
Consumer advertisers lead the way in 2007; leisure ad spend was
in third as a subcategory within the Consumer figures at 13% of
total.
47. V A L U A T I O N
The assessed start valuation of W2B Publishing LLC is based upon
several aspects of the project and requires some examination of
revenue potential (from advertising) and the scope of this project:
48. 1.
V A L U A T I O N
First is earning potential of the magazine, so let’s take a look at
the value of our advertising space. This calculation is based upon
the market value of our targeted audience: upscale consumers
(American and later European) who have visited boutique hotels
and are homeowners, managers and business owners with a
minimum household income of $150,000 USD).
49. 2.
V A L U A T I O N
Our planned distribution also has affect on value. In its first
year, 80,000 copies of the magazine will be distributed via
direct drop to upscale businesses and other locations, and
direct-mail drop to selected homeowners. We also are planning
an aggressive direct mail and online advertising campaign to
gain ‘opt-in’ free subscriptions.
50. 3.
V A L U A T I O N
American magazines in this ‘class’ (demographic and distribution
scope) will generate between $110 CPM (per thousand) to $246
CPM (Modern Luxury Media). Initially, we see $103 CPM; $130
CPM for premium positions.
The result will be $4.3M in GROSS revenues in the first full year of
publication; $1.13M EBITDA (gross NET after pre-production,
production, distribution, printing, sales commissions, owner payroll
and ed/prod payroll, but not GA and administrative payroll).
51. 4.
V A L U A T I O N
Then, there is the online component. The partnership has
acquired software that will allow the magazine to launch a fully
operational ‘virtual magazine’ – a ‘flash-like’ replica of the
published magazine that will allow subscribers/browsers to
access the pub and submit ‘safe’ orders for information from
advertisers and experience multimedia events direct from any
portion of the content. We will also allow visitors to rate boutique
hotels and restaurants (similar to TripAdvisor.com) – see
“concept” for a more complete description.
52. 5.
V A L U A T I O N
Next, is the historical valuation of other publications in our class. Note
the recent sales and public valuation of other magazines: Brentwood
Magazine (2005) a small local lifestyle, sold for $500,000; Orange Coast
Magazine (2007) a larger regional luxury lifestyle, reportedly sold for
$18M; and Modern Luxury Media (2007) a network of 25 luxury
magazines distributed throughout the U.S., was sold for $250M to Clarity
Partners LP in May 2007. We are confident that a $1M launch valuation
is compatible with historical valuations and commensurate with the
earning potential of this magazine.
53. 5b.
V A L U A T I O N
Moreover, depending upon the formula you wish to use (multiple of
revenue or CAPM), the valuation of REST MAGAZINE could be as
low as $5M or high as $20M. Please also note that we are planning a
$5.5M initial private placement offering.
54. 6.
V A L U A T I O N
Finally, we have a “million dollar team.” One of the owners is a
published author, experienced publisher and a proven editor;
another is an award-winning and proven professional in design and
production; and the third has extensive experience and connections
within the hotel industry.
55. 7.
Finally, this valuation is also based an initial infusion of $100,000 (USD)
from Angel financers in Europe. This capital will work alongside the
sweat equity and considerable personal investment that the three
partners – Michael Wollner, Ray Wyman, and Gary Bedian (W2B
Publishing, LLC) – have already and will continue to make toward
successful launch and implementation.
57. O R G A N I Z A T I O N
MANAGEMENT - THE EXECUTIVE BOARD
Members of the Executive Board will be chiefly responsible for the day-
to-day operations of the Corporation. Note that the positions of CEO,
COO, CFO will be determined by a vote of the Board of Directors.
quot; Michael Wollner, chief creative director and co-publisher.
quot; Ray Wyman Jr., chief editorial director and co-publisher.
quot; Gary Bedian, chief business development director in charge of distribution
and venture capital.
58.
59. O R G A N I Z A T I O N
MICHAEL K. WOLLNER
Michael is the founder and creative director of WollnerStudios, Inc. He
has over 30 years of experience from such high-profile agencies like
DDB Needham Worldwide, Ogilvy, Benton & Bowles and DMB&B. He
brings a combination of excellent creative and marketing ideas across a
broad spectrum of consumer and b2b categories with his international
experience. He is a passionate exponent of ideas based design,
advocating the delivery of creatively executed, single-minded solutions
working across all communication levels.
For more information visit www.wollnerstudios.com
60. O R G A N I Z A T I O N
RAY WYMAN JR.
Ray Wyman, Jr. is a career writer and has been heavily involved in the
publishing field for more than 30 years. He began his career in
publishing as an assistant pressman for a regional newspaper in 1976.
He has spent the rest of his life amassing experience in all aspects of
publishing: from concept to production and from prepress to
distribution.
For more information visit www.wollnerstudios.com
61. O R G A N I Z A T I O N
GARY H. BEDIAN
Gary Bedian is a highly skilled professional executive manager
specializing in commercial real estate development and hotel
management. He currently manages assets and investment portfolios
representing more than $1.5 billion in capitalization. His work includes
representing owner-management for commercial real estate
development, sellers and buyers for hotels, resorts and condominiums.
For more information visit www.gbedian.com
62. O R G A N I Z A T I O N
BOARD OF DIRECTORS
The Partners and Angel funders will form the board and will rotate the
Chair between them. New members will be included on the board as the
portfolio of investors develops.
63. O R G A N I Z A T I O N
ADVISORY BOARD
The advisory board will consist of people from the boutique hotel, spa,
restaurant and publishing industry.
