Digital Youth Network Inc. (OTCBB: DYOUF)

Dear Reader,

Profiting from the MySpace Generation

It’s become ubiquitous of late… this MySpace thing.  Every night it’s on the news for one reason or another and now over SEVENTY-MILLION people call the place home.  The teen-driven social networking site has been the Internet’s latest Big Thing following Yahoo- eBay- and few others as traffic juggernauts of epic proportions.

MySpace’s enormous success has revealed something about our society, our youth and more importantly, our future. We are now all technophiles- lovers of technology- and with youth comes a more acute affection for enhanced communication.  The 30-and-unders all "text" each other, instant message like wildfire, date online, hang out in chat rooms, build MySpace pages and generally live two existences, one real and one electronic.

This isn’t going away, parents and curmudgeons.  It’s only going to get more and more electronic.  And you can’t invest directly in MySpace either.  Media magnate Rupert Murdoch recently spent more than $500 million dollars to acquire that choice piece of real estate, knowing full well its value as a unique window to a generation.  But there are many companies that know what Murdoch does, that digital media and communication is to this generation what newspapers were a hundred years ago and television fifty years ago.

Today’s featured company is one such entity that seems to understand the "MySpace generation" as well as anyone - with a variety of products and applications built to serve this enormous market.  Please take just a moment to read today’s intriguing profile.
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About DY Mobile

Digital Youth Network Inc. ("DY") is the parent corporation of two mobile-technology operations: Mobile on Demand and Digital Youth Network. Based in Canada, DY has successfully developed its brand name throughout Canada and is now entering the U.S. market.

DY brings services to customers such as music, ringtones, images, games, text messaging, and network communities for DY mobile phone users. The DY brand is also anchored with a strong online presence to supplement content with contests, promotions, content archives, and giveaways that feature concert tickets, posters, and movie passes.

DY Mobile has connectivity to most major carriers in North America and provides DY media partners and clients with consulting, software applications, reporting and billing for integrating mobile marketing -specifically text messaging with the clients own media. The Mobile content industry is estimated to generate $15B per year and DY Mobile has positioned itself to be a leader in marketing and distributing mobile content and mobile phone services.  DY has built a solid customer base in Canada and is now partnering with American companies to assist in increasing their revenues and subscriber base.

Text messaging has the fastest growth rate in telecommunication.  Using only 160 characters, over a billion messages are sent every day.  It’s not only a good way to communicate with friends but has several advantages for product sales.  DY connects text users to content and products.  By using other media, DY drives mobile and PDA users to text sites to pay for products and information without the use of a credit card.  The transactions are billed directly to the buyer’s telephone bill.

One example of the power of text messaging is the hit game show Deal or no Deal.   Each text message sent to the show is billed at $0.99.  With an estimated 3 million messages sent per show, it is one of the most successful promotions in the U.S.  This is a two-media sale.  First the text address appears on the television screen and then the mobile user sends a text message that enters them in a contest.

DY generates revenue from selling ring tones, music, and other products.  The company has concentrated on print media for its two-media sale.  First, the company contracts with print media, both newspapers and magazines, for a page of space to sell DY’s products and those of their advertising clients.  On this page are offerings of ring tones and the latest music along with other products.  Text messaging addresses are listed with each item and DY shares heavily in the revenue generated.  Secondly, the mobile user can download content products, request information, enter a sweepstakes or vote for their favorite American Idol.
 

The DY model for rapid expansion is to launch with media companies that already have  large and relevant audiences like Newspapers, Magazines TV and Radio stations

Most consumer products companies try to target potential customers by advertising in the media that they most often use.   Text messaging boasts the highly sought-after youth market. Text Messaging response rates can be quickly and accurately measured providing a good indication of the effectiveness of advertising dollars spent and the potential return on investment.  Also, creative content can be tailored to the specific likes and dislikes of the mobile users.  This unique flexibility makes text messaging a great tool for quickly field testing an advertising concept, providing immediate market research for a new product, launching on-the-spot promotions and for providing information - for instance at a concert venue or college campus. 
 

THE BRANDS of DY MOBILE

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DY allows for a turn-key solution for media companies to benefit from Mobile on Demand storefronts.  DY has the technology, content agreements, and billing solutions in hot demand by traditional media companies wishing to sell mobile content to the general population and develop mobile advertising programs for brands and advertisers. 

Magazines, newspapers, radio stations wish to capitalize on the incremental revenues they can generate from the sale of mobile content to their audience, but generally do not have the expertise, technology or agreements in place to do so on their own. 

Mobile on Demand is 100% Spam Free - DY works closely with Canada's Mobile watchdog, the Canadian Wireless Telecommunications Association (CWTA).  DY Mobile and Mobile on Demand are completely SPAM FREE.  Customers will never receive unsolicited communications from DY or its clients and the TrueTones DY provides are the actual songs, by the original musicians, and are licensed through Universal Music and SonyBMG

Universal Music 

DY develops Mobile on Demand for each media partner and tailors its content, look and feel to the media partners’ audience.  For example, in early 2005 DY entered into an agreement with Pacific Newspaper Group to create and publish a weekly page in The Province newspaper-branded Mobile on Demand. 

The project was a success, and as a result, DY expanded Mobile on Demand the weekly page into five Canwest-owned major newspapers (Montreal Gazette, Ottawa Citizen, Edmonton Journal, Calgary Herald and The Province in Vancouver) reaching more than 2,000,000 Canadians weekly.

In 2005 DY also entered into an agreement with Digital Advertising Network (DAN media) to run mobile advertising programs on their network of 67 mall video screens.  DY, together with DAN media has executed mobile advertising campaigns for such companies as L’Oreal, Yves St. Laurent, Rogers Wireless, 20th Century Fox and Dreamworks.

DY has secured two 30-second ads every 15 minutes, and is launching Mobile on Demand onto video screens to now promote and sell mobile content to DAN’s more than 10,000,000 weekly audience situated in food courts across Canada.  This agreement is currently being extended for an additional 24-month term.

In March 2006, DY entered into a final agreement stage with Metro Newspapers to launch Mobile on Demand in Metro Vancouver in April 2006. DY expects to expand Mobile on Demand into Metro Montreal and Metro Ottawa in May 2006. In March 2006, DY also entered into a final agreement stage with Chart Publishing, to create and publish Mobile on Demand page within Chart Magazine, Canada’s pre-eminent music magazine reaching more than 80,000 music-conscious readers each month.  Also in March 2006, DY entered into an agreement with The Magazine to publish a double-page spread in its monthly publication with more than 80,000 teen subscribers. 

The Digital Youth Network ("DY") was founded in 2002 to create a wireless community of student users, while at the same time addressing school safety issues.  Initially the DY program allowed secondary school students, enrolled in participating school districts, to become DY Members. As a DY Member, they received a discounted cell phone, some airtime, some free text messaging, free crisis line calls (*545) and access to all the online features of digitalyouth.ca 

Due to the rapid popularity of DY, we decided to open up the community to all Canadian students between 13 and 18 years of age with or without cell phones.  This has led to the rapid expansion which ultimately included nearly 20,000 members. DY has plans to re-invigorate this community concept building upon the tremendous success of MySpace and similar digital communities.

Chatrooms, text messaging and other communication features are available only to confirmed DY Members, hence all communication is between members only.  Being a DY member means you get crazy deals on stuff like clothing, music, movies, sports, events, airtime & ringtones. DY has one of Canada's first carrier-approved, third-party licenses allowing DY to sell content for all consumers' handsets (music downloads, games).  And members participate in DY promotions.

Digital Youth Network In The News

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October 18, 2005 - Media In Canada
Top Stories

Mobile on Demand goes national

by Pia Musngi

According to Dan Reitzik, everyone's going digital. The president of the Vancouver-based online and wireless community Digital Youth, announced that the company's Mobile on Demand program is expanding to five markets, and as a result of the expansion, they're busy searching for sponsors. The initiative, a partnership with CanWest Media Works, offers brands a bundled mobile and print buy. The weekly full-colour, full-page "mobile marketing destination" in Friday editions of CanWest print properties in the Vancouver, Calgary, Edmonton, Ottawa and Montreal markets will contain content such as mobile stories (called 'Text in the City'), ads and contests. The biggest draw? Ringtones provided by exclusive category sponsor, Universal Music.

Mobile on Demand initially ran as a test in CanWest's Vancouver Province last spring. In some weeks, text-ins fluctuated between 400-5,000, depending on content and contests offered that week. Because of that continuing success, the 16-week national program will be offered in the Vancouver Province, Calgary Herald, Edmonton Journal, Ottawa Citizen and Montreal Gazette beginning November 18. Digital Advertising Network (DAN), a Digital Youth partner, will support the promo through its network of in-mall screens. DAN Media will also be selling Universal ring tones.

Just started for Mobile On Demand is the New Music Tuesday Club. Users text their preferred genre to a short code and every week, an SMS will be sent about a newly-launched Universal music CD in that genre. Reitzik says this feature will be tied to regional music retailers.

"People want value-added info with time sensitive offers. It's all about immediacy," says Reitzik. At first the program, which started two weeks ago, is being used to create a database of users. Eventually, that database will be used to drive traffic to stores with incentives such as m-coupons or in-store artist signings.

Digital Youth is also in negotiations with a travel company as part of the national launch. The idea is to sign a travel sponsor to notify users about last minute travel deals. Reitzik says the company is also shopping for a video rental company to service movie fans for the upcoming New Movie Tuesday Club.

"This is so users can get the news about when the latest DVD comes out. We're all about building interested user groups. They understand that they're being marketed to and it's all permission-based. We want to create destinations in media for people to find anything and everything mobile such as content and contests. And this works best for aggregators."

Depending on the size of the ads within Mobile on Demand the buy costs between $800 and $3000 per week per market. Basic mobile campaigns are included in the media cost.

The company hopes to turn the full-page mobile destination into a pull-out section, eventually, he says. Mobile on Demand targets 25 to 35 year-olds and as of December 2004, the network member count was at 28,000.

With files from Lisa D'Innocenzo.
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The Digital Youth Management Team

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Financial Highlights For DYOUF

To Contact DY Mobile

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