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MTVR Metaverse Report
Industry updates from the Fount Metaverse ETF (MTVR).Clickhere to access the full list of holdings.Metaverse Standards ForumMeta Platforms, Unity Software Inc., and other tech giants joined together to form The Metaverse Standards Forum in order to foster the development of open standards for the metaverse. Hosted by the Khronos Group, the Forum welcomes any company, standards organization, or university at no charge through a click-through Participant Agreement.“The metaverse will bring together diverse technologies, requiring a constellation of interoperability standards, created and maintained by many standards organizations,” said Neil Trevett, Khronos president. “The Metaverse Standards Forum is a unique venue for coordination between standards organizations and industry, with a mission to foster the pragmatic and timely standardization that will be essential to an open and inclusive metaverse.”The activities of the Forum will follow the needs and interests of the members which may involve diverse technology domains such as 3D assets and rendering, human interface and interaction paradigms such as AR and VR, user created content, avatars, identity management, privacy, and financial transactions. Forum meetings are scheduled to begin in July 2022. [1](The Metaverse Standards Forum)Meta Unveils Prototypes of VR HeadsetsMark Zuckerberg revealed several of Meta Platform’s unfinished headset prototypes to show off the progress made in Reality Labs, a business of Meta Platforms that produces virtual reality (VR) and augmented reality (AR) hardware and software. During his demonstration Zuckerberg said that Meta aimed to provide a realistic enough experience for users to feel like they’re in the same room with other virtual people. The protypes he demonstrated were:- Butterscotch: Butterscotch has a new lens developed by Meta that limits the headset’s field of view, making it possible to present fine text and display increased realism. However, the product was deemed “nowhere near shippable” because of its weight and bulkiness.-Half Dome 3: The resolution and image quality of Half Dome’s technology could improve enough for users to create giant computer monitors inside a headset. Half Dome 3 replaces mechanical parts with liquid crystal lenses.- Holocake 2: Holocake 2 is the thinnest and lightest headset that Meta has made. It uses a flat, holographic lens to reduce bulk, in addition to lasers. However, it requires specialized lasers that are too expensive for consumers to purchase and require additional safety precautions.- Starburst: Starburst focuses on high-dynamic range displays which are brighter and show a wider range of colors.- Mirror Lake: Mirror Lake, a ski-goggle style headset, combines all the different Meta headset technologies into a single, next-generation display. Mirror Lake is currently only a concept from Meta with no fully functional headset built.[2](Meta)Roblox on the RiseRoblox released its key metrics for May 2022 including [3]:- 50.4 million daily active users- 3.6 billion hours engaged- Between $196 million and $199 million estimated bookings- Between $194 million and $197 million in estimated revenueSeveral brands are collaborating with Roblox to enter the metaverse. Givenchy Beauty has opened The Givenchy Beauty House on Roblox where users can earn up to five exclusive Givenchy inspired digital items. [4] American food company Chobani is also hosting a “Cosmic Race” in Roblox. Participants can race through a virtual galaxy in order to win custom merchandise. [5](Centennial Beauty)Snap Inc. x Vogue: Redefining the BodySnap Inc. and Vogue have joined forces to open an exhibition at Centre d’art La Malmaison in Cannes using cutting-edge augmented reality. Designers from Balenciaga, Dior, Gucci, Kenneth Ize, Richard Quinn, Stella McCartney, and Versace showcased their designs, and Snapchatters were able to digitally try on the one-of-a-kind pieces using Snapchat’s revolutionary scan technology.Exhibition goers and Snapchatters were also able to bring the rooms of the exhibition to life using Snapchat’s AR experiences. With a simple scan, visitors could open other-worldly portals or watch exciting animation displays within the brands’ individual rooms. [6](Vogue)Learn how to invest in your future experiences with Fount ETFsThe Fount Metaverse ETF (MTVR)The Fount Metaverse ETF (MTVR) seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.MTVR may be an attractive vehicle for investors looking to invest in the metaverse.For a full list of MTVR holdings, please clickhere.The Fount Subscription Economy ETF (SUBS)The Fount Subscription Economy ETF (SUBS) seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the Fount Subscription Economy Index. The Index was designed to measure the performance of companies engaged in the business of providing subscription services, i.e., companies that sell products or services for recurring subscription revenue.SUBS may invest in companies that offer subscription-based pricing models, including those in the technology hardware industry.For a list of SUBS holdings, please clickhere.1) “Leading Standards Organizations and Companies Unite to Drive Open Metaverse Interoperability,” Metaverse Standards Forum, June 21, 2022;https://metaverse-standards.org/news/press-releases/leading-standards-organizations-and-companies-unite-to-drive-open-metaverse-interoperability/2) Leswing, Kif., “Mark Zuckerberg showed these prototype headsets to build support for his $10 billion metaverse bet,” CNBC, June 21, 2022; https://www.cnbc.com/2022/06/21/mark-zuckerberg-shows-early-metaverse-headsets-mirror-lake-holocake.html3) “ROBLOX REPORTS MAY 2022 KEY METRICS,” Roblox, June 15, 2022;https://ir.roblox.com/news/news-details/2022/Roblox-Reports-May-2022-Key-Metrics/default.aspx4) “GIVENCHY BEAUTY ENTERS THE METAVERSE WITH ROBLOX COLLABORATION,” Centennial Beauty, June 22, 2022;https://centennialbeauty.com/givenchy-beauty-metaverse-roblox-collaboration/5) Dominguez, Liz., “Chobani Races Into Metaverse Experiment With Roblox Event,” Consumer Goods Technology, June 17, 2022;https://consumergoods.com/chobani-races-metaverse-experiment-roblox-event6) “Vogue and Snapchat Break Fashion‘s Boundaries With Augmented Reality,” Vogue, June 19, 2022; https://www.vogue.co.uk/fashion/bc/snapchat-redefining-the-body
Are Payments the Key to Subscription Success?
Research from subscription consulting company Zuora indicates that companies that offer subscription-based pricing plans experienced faster sales growth than those thatdo not. Zuora also found that companies that offer more payment options, specifically those preferred by their customers, were among the most successful companies in terms of revenue growth.Stronger Revenue GrowthZuora created the Subscription Economy Index (SEI) to measure the performance of companies that offer subscription-based products and services.As of the end of 2020, sales for companies in the SEI grew at a seven-year compound annual growth rate (CAGR) of 18.2% versus 3.6% for the overall S&P 500 and 3.7% for retail companies within the S&P 500.What part do payments have in the growth of companies offering subscription-based products and services?More Payment Options, Faster GrowthZuora found that companies that offered more payment options, experienced the fastest revenue growth. For example:Companies that offered five or more different payment options experienced the fastest revenue growth over the seven-year period.Payment options worldwide, e.g., bank debit cards, digital wallets, and credit cards, varied, and companies that offered the preferred payment type in their countries experienced the fastest growth.Businesses that accepted more payment methods reduced churn, or the number of individuals canceling their subscriptions.Companies that accepted more payment options had more effective payment collection, i.e., they collected a higher percentage of the total amount invoiced to customers.Companies that accepted more payment methods grew their customer base faster.Businesses that accepted more currencies grew both their revenue and customer base faster.Customization Is KeyWhile companies offering subscription-based payment options grew their revenue and customer base faster than those who didn’t, businesses that offered more flexible payment options performed the best on those metrics. The key takeaway is that having the flexibility to customize products and services to a customer’s preferences is a factor that may allow companies to differentiate themselves from their competitors and grow their businesses faster.The subscription-based pricing model may allow companies to offer this flexibility as there are often more points of contact between the customer and companies that offer subscriptions.The Fount Subscription Economy ETF (SUBS)The Fount Subscription Economy ETF (SUBS) seeks to provide investment results that, before feesand expenses, generally correspond to the total return performance of the Fount SubscriptionEconomy Index. The Index was designed to measure the performance of companies engaged in the business of providing subscription services, i.e., companies that sell products or services for recurring subscription revenue.SUBS may offer an attractive vehicle for individuals looking to invest in companies offering subscription-based pricing models.
Can the Metaverse Help Solve Supply Chain Problems?
If you have recently ordered anything online, or tried to purchase appliances, furniture, automobiles, and electronic products, you are undoubtedly aware of supply chain issues that have limited the availability of these products or delayed their arrival.Can the metaverse help companies solve supply chain issues? Food and beverage company Kraft Heinz thinks so. The company is using the capabilities of the metaverse in an effort to secure its supply chain and get its products on store shelves quicker. How is Kraft using the metaverse? Can it help other companies solve their supply chain problems?Creating a Digital TwinKraft is creating a digital twin of its manufacturing process in the metaverse that may allow it to problem-solve virtually, according to a CNN article.[1] A digital twin is a virtual representation of real-world physical assets or systems.Virtual Factory FloorThe digital twin gives Kraft a capability that it did not previously have, namely, to have a working virtual map of the entire factory floor. Digitally mapping out these facilities may help Kraft better understand the design flaws and help to increase efficiencies.The digital twin may also allow Kraft to catch errors ahead of time by allowing it to simulate production. It can create alternatives, and then test them digitally before enacting them on the factory or warehouse floor. Previously, the company would not know if an idea worked until they implemented it. Virtual testing can help speed up the process.Other Companies Following SuitWhile explicitly using it for supply chain issues, Kraft is not the only company using the metaverse to design and improve its manufacturing processes. A recent Citi report[2] highlighted the use of the metaverse for the field of smart manufacturing. It explained that by utilizing simulations in the metaverse, manufacturers could significantly cut down on project costs, time, and wasted resources.It also noted several companies are already using the metaverse in smart manufacturing.Some of these include:Boeing is exploring digital twin technology to build airplanes.Siemens Energy developed a digital twin to offer predictive maintenance of power plants.Ericsson is building city-scale digital twins to help study the interplay of 5G cells and the environment for maximum performance and coverage.SummaryThe ability to create digital twins and perform real-time simulations highlights the potential power of the metaverse to help companies solve manufacturing and logistical problems. It can help make companies and entire economies more efficient and productive.The Fount Metaverse ETF (MTVR)The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.MTVR may be an attractive vehicle for investors looking to invest in the metaverse.For a full list of MTVR holdings, please click here.[1] Weiner-Bronner, Danielle, Kraft Heinz Wants to Solve Its Supply Chain Problems, In the Metaverse, CNN Business, 5/6/22[2] Metaverse and Money: Decrypting the Future, Citi GPS, March 2022
Tired of Bank Fees? Try a Banking Subscription
If you are unhappy with seeing a list of bank fees on your monthly statement, you might want to consider a banking subscription. Some neobanks – banks that operate primarily online – are replacing monthly fees, including overdraft fees, with a subscription-based pricing model.How does this work? Why may banking subscriptions be attractive to both individuals and financial institutions?Recasting Fees as SubscriptionsMounting fees are a source of dissatisfaction for banking customers.Banks’ efforts to reduce costs are not making a dent in reducing customer dissatisfaction, according to consumer research firm J.D. Power.[1]To combat customer dissatisfaction, some neobanks are recasting fees as subscriptionsand are marketing memberships as time and worry-saving features. Neobanks may offer different subscription pricing tiers that may include services such as free ATM withdrawals, no overdraft fees, foreign currency exchange, and higher interest rates.Consumers may prefer the subscription model because it has a predictable cost instead of surprise charges that may disrupt a customer’s financial plans. It may also allow customers to have more control over what to pay for and when.Why Banks Might Want to Offer SubscriptionsCreating customer satisfaction is one of the main reasons why banks may want to offer subscriptions. This is particularly true among younger customers. J.D. Power noted that younger customers are more attracted tothe neobanks subscription model.[2]From a marketing perspective, a subscription model may enable banks to market their products as having no fees. This can serve as a potentially attractive point of differentiation from traditional banking firms. It may also allow banks to offer a simplified product, which often is preferable to customers than a long list of customized options, according to The Financial Brand.[3]Financially, subscriptions may prove to be more lucrative than fees. According to The Financial Brand,people generally overestimate their usage of a product. Think of your gym membership. Banks may be able to entice individuals to consolidate their banking relationships under one institution and charge them a monthly subscription fee that will likely exceed the value of the services offered.Not Just BanksIt’s not just banks transitioning to a subscription model. Some wealth management firms are also adopting subscription platforms. For example, Charles Schwab has an automated investment platform that, for $30 per month, builds and manages client portfolios. Wells Fargo offers a hybrid robo-advisor for a subscription fee of 0.35%.[4]SummaryBanks and financial services companies are not immune from the subscription economy trend. The subscription model may allow banks to increase customer satisfaction while potentially appealing to a new demographic segment.The Fount Subscription Economy ETF (SUBS)The Fount Subscription Economy ETF (SUBS) seeks to provide investment results that, before feesand expenses, generally correspond to the total return performance of the Fount SubscriptionEconomy Index. The Index was designed to measure the performance of companies engaged in the business of providing subscription services, i.e., companies that sell products or services for recurring subscription revenue.SUBS may invest in companies that offer subscription-based pricing models, including those in the technology hardware industry.For a list of fund holdings, please click here.[1] Choo, Lindsey, Banks Need to Start Cashing In On the Subscription Economy, Protocol, 4/28/22[2] Protocol[3] How Innovative Bundled Banking Subscription Models Make More Money, The Financial Brand, 2022[4] Mansard, Michael, Why Subscriptions Are Key to the Future of the Financial Services Sector, Financial Derivative, 4/14/21
Subscriptions and the Business-to-Business Operating Model
The subscription model is one that is familiar to consumers; people have been subscribing to newspapers for decades. In recent years, the subscription model has expanded to just about every good and service that individuals consume, including streaming entertainment and news, groceries, and even travel.It is no surprise that the subscription model is infiltrating the model in which businesses sell their goods and services to other businesses (B2B). What is driving this shift? What advantages does the subscription model offer in the B2B world?Origins of the B2B Subscription ModelSalesforce is credited with launching the B2B subscription model in 2000 with its “the end of software” marketing campaign, according to subscription consulting company Zuora.[1] Salesforce, through its software-as-a-service (SaaS) to companies, provided a standard, distributed solution at a lower cost of entry so its customers wouldn’t need to worry about costly installation and maintenance.Potential AdvantagesTechnology advances quickly. What is cutting-edge today may soon become obsolete. Subscription models provide access to the latest software capabilities and innovations, with customers receiving automatic upgrades when available.Without a hefty, up-front purchase price, it may also allow companies to test new products and services. It also releases companies from the difficulty, expense, and skills required to manage on-premise technology.ConvenienceSubscription services are also geared toward providing convenience. Software subscriptions usually allow for a nearly instant set-up, simple scalability, and easy cancellation.Potential Cost SavingsBuying technology usually requires a significant up-front investment which may be beyond the ability of some companies, especially small and medium-sized businesses (SMBs). Subscription services may remove this up-front fee, making it easier to implement the improvement and innovation offered by new technology. Therefore, subscription-based models may help level the playing field for SMBs by lowering the cost of access to digital and automated technologies, allowing them to compete with larger companies.Potential Benefits for Companies Offering B2B SubscriptionsB2B subscription models may provide companies with a more predictable stream of revenue and cash flow. They may provide an additional source of revenue as companies, that could not afford an outright purchase of a good or service, may opt to subscribe.Additionally, companies offering B2B subscriptions may benefit from increased information and contact with the business customer and the ability to provide more customized products and services.Not Just for ConsumersSubscriptions are not only for consumers. The subscription-based model may also have the potential to disrupt the way companies buy or sell services to other companies.The Fount Subscription Economy ETF (SUBS)The Fount Subscription Economy ETF (SUBS) seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the Fount Subscription Economy Index. The Index was designed to measure the performance of companies engaged in the business of providing subscription services, i.e., companies that sell products or services for recurring subscription revenue.SUBS may invest in companies that offer subscription-based pricing models, including those in the technology hardware industry.For a list of fund holdings, please click here.[1] The Subscription Economy is Transforming B2B Operating Models, Subscribed, Zuora Website, Retrieved 5/1/22
Why Is Meta Opening a Physical Store?
Meta, the company formerly known as Facebook, announced that it planned to open its first physical store on May 9. What is behind Meta’s move? Is this at odds with its goal of transforming into a metaverse company? Is this potentially a good thing for the metaverse?Complimentary and Potentially Enhancing to its Metaverse AmbitionsMeta announced in its blog that it planned to open its first physical retail space at its campus in Burlingame, California.[1] The store will allow customers to get hands-on experience with all of Meta’s hardware products.Meta’s physical store will enable customers to experience the metaverse experiencefirsthand. Meta founder Mark Zuckerberg noted, “The best way to understand virtual reality (VR) is to experience it.”[2] VR is one component of the metaverse.According to its blog, the Meta store will showcase the company’s Quest 2 VR headset, the Portal video calling device, and the Ray-Ban Stories smart glasses.Visitors can demo popular apps on Quest 2 and project their experience on a large, curved LED screen in the store for others to see.The company is also working on producing additional hardware products such as a smartwatch and more high-tech augmented reality glasses.Meta’s decision to open the store on its corporate grounds is deliberate. According to Martin Gilliard, Head of Meta Store, “having the store in Burlingame gives us more opportunity to experiment and keep the customer experience core to our development.”[3] Meta intends to learn from customer experience in its stores and help define its future retail strategy.Following Other Tech Company’s LeadMeta is not the first tech company to open a physical store. In May 2021, Google announced that it was opening its first physical retail store – the Google Store – near its offices in Chelsea in New York City.[4] The store showcases some of Google’s physical devices, such as Pixel phones, Nest products, Fitbit devices, and Pixelbooks. The store employs staff to help customers troubleshoot issues or help with installations.Although it closed most of its 83 physical stores, Microsoft left a handful open, including its London, New York, Sydney, and Redmond, WA locations. These stores were reimagined as “experience centers.”The locations showcase some of Microsoft’s products, such as its Surface PCs, Xbox, and its Windows and Office products.[5]And, of course, we have Apple, who, in 2001, opened its first of what would become many retail stores.Using Physical Space to Showcase TechnologyThere is a precedent for using physical locations to showcase a tech company’s technology: getting potential customers acclimated to new products and to engage in market research.As such, we believe that Meta’s opening of its first physical store is positive as it may allow consumers to experience the metaverse firsthand.The Fount Metaverse ETF (MTVR)The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.MTVR may be an attractive vehicle for investors looking to invest in the metaverse.For a full list of MTVR holdings, please click here.[1] Introducing Meta Store: A Hands-On Experience with Our Hardware, Meta Website, 4/25/22[2] Isaac, Mike, Meta Plans to Open Its First Retail Stores as It Highlights Metaverse-Related Products, The New York Times, 4/25/22[3] Introducing Meta Store: A Hands-On Experience with Our Hardware, Meta Website, 4/25/22[4] Kelly, Samantha Murphy, Google to Open its First Retail Store to Sell Devices, CNN, 5/20/21[5] Liao, Shannon, Microsoft is Closing All of Its Stores, CNN, 6/26/20
