You know when you watch a good court room drama, the defence lawyer is speaking, and at the time he/she seems to make perfect sense and you find yourself agreeing wholeheartedly with them? And then the prosecution lawyer has a go, and you find yourself agreeing wholeheartedly with them too?
Well, I'm getting that with RBL.
I completely understand all the negatives people had raised, but I use RBL and find their products are not overly expensive and of good quality. The only negative as been the kids photographic posters which were not of good resolution. T-shirts and masks were great.
I can see why people are unimpressed about the near term revenue forecasts, but the reasoning behind them seems sensible. There has been an exceptional event which has caused a not-to-be-repeated bump in sales. Firstly the lock down induced online shopping phenomenon, but also the number of masks sold, which is unlikely to be repeated at the same level. I would anticipate many of those customers will continue to use RBL in the future but how many masks do you need? In the presentation, they clearly stripped out this "bump" to estimate "normal sales" increasing at the previous CAGR., not the COVID rate. Should the "underlying" increase in revenue/sales etc not show evidence of improvement over 24 months, then clearly that would be of concern. Flagging the probability of a slow-down in the short term sounds like good managment to me.
Regarding the "network effect". I can see reasonable arguments for both sides. If they can invest in growth to become the dominant place to buy this sort of gear, then there is an argument to say that this will become a flywheel. Sure an artist can go off to some other platform but who is going to go looking for them? I know I can log on and find a huge range of work to choose from at reasonable price. Why would I look anywhere else.
The copying and copyright issues are definitely of concern. The example picked by Claude was unfortunate, given Banksy cannot claim a copyright . But the point could be applied to other areas, and other artists, as has previously noted. I will be watching closely how they cope with this issue.
Overall, I'm happy to hold for the time being.
