Trebel Music is a licensed music service. The company obtains licenses to distribute copyrighted content, which are renewable every year or every two years, depending on the music label. While music labels routinely renew licenses, it is possible that economic disagreement may delay or prevent license renewals, which may cause service interruptions.
Trebel develops and operates software systems to provision services for millions of users. It also relies on cloud computing service providers such as Amazon, Microsoft Azure, and others to provide tethered music downloads, correctly record and report usage for royalty calculation purposes, and provision for the correct operation of the Trebel Music app. Errors in its software, or failures in the software or the hardware on any of its service providers may cause interruptions in Trebel service, causing bad reviews of the app, and loss of revenue and brand value.
We rely on advertising revenue and virtual currency sales to generate income, with only minimal historical revenue in either arena. Our business is susceptible to changing ad prices, unpredictable fill rates, technology risks, seasonality, and changes in macroeconomic conditions that may impact our ability to effectively monetize the app.
Our liquidity relies on raising additional funds unrelated to this campaign on WeFunder. We have been funded by angel investors and have no institutional investors so far. There is no guarantee that we will secure the necessary funds to finance our growth.
We are heavily reliant on a handful of programmatic advertising exchanges for most of our revenue. If we experience issues with collections with these exchanges, it could have immediate and significant impact on our ability to operate and grow the business.
Most of our technology is currently developed offshore. There is no guarantee that the offshore team will keep pace with the latest technology developments or scale up with the company on a global basis.
The current US operating team has a short track record of working together, and resources are stretched thin. The key executives are not under contract and could leave the company at any time.
The current management team has limited operating experience in Mexico and Latin America, and the company projects significant growth in the coming years from these markets. There is no assurance that the current team can execute on acquiring users or driving revenues in these markets. Furthermore, the value of a user and the associated advertising revenue opportunity in these emerging markets is potentially much lower than in the US.
The mobile app business is a duopoly and requires integration and compliance with rules and standards set by the two operators of app stores, Apple and Google. Both Apple and Google have music businesses that directly or indirectly compete with Trebel. Changes in app store rules or technology by Apple and Google may cause service interruptions.
Trebel intends to conduct business throughout the world which makes the company subject to macroeconomic risk, currency risk, and geopolitical risk. These uncertainties could significantly impact Trebel's planned user growth and associated business performance.
Mobile technology changes rapidly and could present operational and competitive threats to the business. Trebel uses complex algorithms to serve ads, complex encryption to store and play music, and has intricate and expansive reporting requirements to the rights holders. These complexities, along with the shifting and evolving technology associated with mobile phones and their networks present technical risks for the company.
The music industry has seen various paradigm shifts where old technology and old methods of music distribution and consumption have quickly changed or become obsolete in a matter of years. There is no assurance that Trebel's business model and technology will evolve to adapt to these shifts.
Trebel is a small company and competes against much better funded and older companies who have widely differing business models and motives as it pertains to pricing, bundling, advertising, and discounting. These competitive threats and the relative size of Trebel compared to other platforms, apps, and services makes any investment in Trebel come with a high degree of risk.