With the recent success of the movie Avatar, and the way it sank Titanic on route to becoming the world’s #1 earning box office movie of all time, seems everyone is talking about 3-D display these days. There is no doubt 2010 is shaping up to be the year of 3-D. Consumers and technology enthusiasts alike are becoming all too acustomed to the 2D lifestyle, requesting a change, something different to renew that interest in viewing pleasure. We have seen the evolution of blu-ray, the 1080p standard, high definition and much more throughout the years, yet one thing has remained the same — they are all 2D displays, however, all that is about to change as we welcome a new decade.

Companies have been frantically spending millions in R&D each year to be the first players to step on the market with this technology, realizing the massive potential target market at hand. We are on the verge of a historic change in the formats we view our televisions and displays today.

Insight Media says that the stereoscopic 3D market is poised to grow from a handful of 3D-capable displays and a few thousand gamers, to an expected worldwide market of over 40 million 3D-capable displays by 2014. The results were published in Insight Media’s groundbreaking 2009 Stereoscopic 3D Gaming Report: A Comprehensive Analysis of S-3D Technology for Gaming.

Brands including, Sony (NYSE:SNE), Phillips (NYSE:PVH) and LG are all expected to compete for this vast market, however they all lack one aspect: The fact that their technology requires glasses. There is one company, however, who is looking to breakthrough and change all of that, Provision Holding, Inc. (OTC:PVHO).

TheMarketFinancial.com is proud to announce that we have established a conference call with Provision Holding Inc. (OTC:PVHO) scheduled for 29/1/10 regarding important company updates.

For those who are new to the company, we highly encourage you read our first two articles on the company:

• Provision Company Profile
  
• Introductory Conference Call

Below is perhaps one of the most comprehensive reads regarding Provision you will find:

• Please introduce yourself – what is your roll at Provision and how long have you been with the Company? Perhaps tell us a little bit about the management team and your advisory board.

• Curt Thornton, CEO, Provision Holding.

• Role = Founder, since 2001

• Briefly describe Provision’s operations over the past several years.

  • Provision’s operations have evolved over the past several years

  • While revenue producing since day one; profitable while a private company

  • Early years were primarily focused on product development and IP formation, selling hardware

  • Transitioned about 2 years ago to become a digital media company

  • How does your 3D technology work?

    • Technology used incorporates an optics based system, with electronics and software

    • What differentiates Provision’s technology from other 3D displays?

      • Two other major forms of 3D displays: traditional 3D with glasses and what is commonly referred to as ‘autostereoscopic’ 3D displays, or 3D without glasses.

      • Provision’s technology has significant points of differentiation with autostereoscopic displays:

        • holographic images are projected floating in space detached from screen

        • clear, high resolution, SVGA and above

        • single source content versus multiple sources of content by autostereo.  Provision’s single source does not hurt the eyes with its wide viewing angle, as compared to autostereo with multiple sources of content causing eye strain and very narrow view angles.

        • low cost to produce content, and can use all existing 2D content as is with no conversion process.

• Can you explain how you are collaborating with the WII remote to create tactile advertising?

  • Provision is collaborating with the University of Tokyo to create “Touchable Holography”.    Wiimotes placed above the display to track hand motion, and an airborne ultrasound tactile display created in the university’s lab to create the sensation of touch. The result is a holographic image that produces tactile feedback without any actual touching, and without degrading the image itself.

• How strong is your IP (Intellectual Property)? Describe any patents and for how many more years they are available for.

  • Currently, Our IP portfolio consists of over 40 patents, copyrights and trademarks

  • More than half are already issued

  • Covers U.S., Europe, China and Australia; currently major markets for PVHO

  • Patents usually go up to 20 years

  • Core patents include optics, software and proprietary electronics

  • We’ll be expanding our IP portfolio further in 2010

• What do you see as the shortfalls of tradition 2D display media?

  • Two major shortfalls of today’s traditional 2D digital media displays

  • First: Ubiquitous; they are everywhere, from gas pumps, to shopping malls, to grocery stores.  Novelty gone.  Low price 2D allow everyone to have a flat panel at home, so they’ve become invisible and ineffective out of the home.

  • Second: Content.  Most of the content displayed on traditional 2D is the same thing you can see at home: weather, news, traffic, recipes.  Why pay attention when I can see the same thing at home.

  • These 2 things contribute to a new disease called ‘Ad Blindness”.

  • How does Provision’s 3D system address the ‘ad blindness’ caused by the ubiquity of outdoor display media? Any relevant case studies?

    • Ad blindness is defined as conscious or subconscious ignorance of advertising due to “Irrelevance and vanilla design”

    • PVHO addresses this by

    • First, we are NOT vanilla, nor are we ubiquitous.  There are no other 3D holographic images being projected in retail stores today.  We see the world in 3D, but unfortunately, until now the world has only been using 2D high resolution flat panels.  PVHO becomes the disruptive technology that everyone has been looking for since they first saw Star Wars back in 1977.

    • Second, Provision’s content is very relevant to today’s consumer.  We do not display news, weather, sports, stock updates.  Our content is informative, engaging, interactive, and entertaining.  There is tremendous variety in how we tell a story as a 3D hologram.  Seeing a floating image inside a retail store is so compelling that it ultimately breaks through the clutter of everything else trying to capture your attention.

    • Results?

    • We’ve published a couple of case studies demonstrating how effective our 3D platform can be.  In one survey,

      • 88% said 3D enhanced the store experience

      • 91% said they were motivated toward the product or brand

      • 100% said 3D would boost their memory of the product or brand

Based on your company’s gathered data, what is the projected current market for your product?

• Current projected market in the digital out of home space is reported to be a $2.6 B market, as this is our first market channel for the product.

Outlook for the market, growth potential?

• Digital Out of Home market is projected to grow 13.2% per year, up to 4.53B by 2013.

• How has the market performed in the recession? One example is newspapers and the cost cutting measures they have undertaken, mostly suffering due to their reliance on advertising,  How does this situation affect you?

  • During 2008-2009, all industry reports show an increase in DOOH between 6-9%, the largest growth in all advertising segments.

  • Newspapers have been in decline for years, mostly due to the success of the web, and the need for immediate information, so there is no surprise that print, in general, continues to struggle.

  • Traditional advertising in television continues to struggle as consumers take advantage of their TIVO platforms trying to skip ads.  So, during a prime time TV show like Idol or Dancing where you might expect 20M to 35M viewers per week in front of the TV – but missing the ads.  In store, DOOH, by comparison, has 60M per week going through the front doors of all the Kroger grocery stores in the US.  Advertisers want to reach the consumer in the most effective way possible, and its being demonstrated that IN-STORE is the place to be, since over 70% of the buying decisions are being made inside.

  • What was the inspiration for the 3DEO Platform?

    • Market Opportunity: Talking to retailers, Brand marketers, manufacturers, Advertisers – all trying to reach the consumer in a new unique way.

    • Traditional Media losing audience; Marketing as we knew it was broken.

    • Digital Media Platforms have been on the rise since their inception just a couple of years ago.

    • 3DEO Platform solves these issues as well as provides immediate gratification to the consumer in a fun and entertaining way.

    • What is a 3DEO Reward Center?

      • 3DEO Reward Center is a (kiosk or terminal) destination inside the retail store, located right at or near the front entrance.

      • Includes PVHO’s 3D holographic display on the top, with touch screens below for the consumer to interact with: coupons, promotions, sweepstakes, etc.

      • Networked via computer, communicated via Internet; programmable remotely that can be changed every minute, hour, day, or whenever.

      • In retail locations like casual dining or convenience stores, our 3D platform just consists of our 40 inch holographic screens by themselves, not integrating them into a kiosk solution. But the effectiveness and results are still the same.

      • What can 3DEO do for brands 1) at the point of purchase and 2) from a branding perspective?

        • Data shows that sales lift is one of the significant benefits of 3D and digital media, with sales lift from 12% to as high as 91%.

        • In one study, 100% said 3D would boost their memory of the product or brand

        • Describe 3DEO’s performance in its 27-store rollout in Fred Meyers Stores.

          • Our market trial in Portland was quite successful in all aspects

          • Coupon Redemption rates averaged 17% across all products with the highest single redemption rate of up to 43%; compared to published industry standards of 1.5%

          • Attracted major Fortune 500 advertisers including P&G, Bayer, BIC, CBS, J&J, Unilever, and Warner Home Video

From the latest 10-Q issued on 11/23/2009, revenues in 2009 were 54,419, down from 266,327 during the same period last year, what were the major causes of this sudden decline?

• Comparing the quarters from 2008 to 2009, it’s certainly attributable mostly to the world economic situation, as both our international hardware sales and domestic hardware sales have dropped off this year.  (US credit freeze, and the strengthening of the US dollar, wiped out our international partners margins) All our distributors, reps, and their clients were tightening their belts to get through 2009’s crisis.

• We begun to transition our efforts from just selling hardware to launching our digital media platform, entering the trials in Portland, and educating the media world on the power of the forthcoming 3DEO platform.

Looking at the latest Income Statement, there were 54,000 dollars made in revenue with 22,000 COG, thus leaving you with a gross profit of 32 thousand. The problem is that the R&D, and even more so the Selling, General and Admin were 47,000 and 474,000 respectively, trumping the revenue. It seems each 10-Q has had relatively the same story behind it, so how will you and your team plan to tackle this problem and thus change this ongoing pattern?

• There is no question that Provision knows how to run a company profitably as we’ve done successfully as a private company before going public.

• There is no question that Provision knows how to run a company on a very lean, zero-based budget.  We’ve trimmed overhead to the lowest levels possible this year, as all companies have done to survive the world economic crisis, as we saw this coming towards the end of 2008.

• The immediate and current focus is to begin our return to profitability by redeploying our 27 3DEO kiosks into the LA market, maximizing our digital media revenues here in the #1 Hispanic market, and the #2 media market.

• What is 3DEO’s revenue model, and how do you plan to change it so that it becomes more profitable going forward? How much does each Reward Center generate?

  • The 3DEO revenue model for our rewards centers is driven by three forms of revenue at the kiosk.  First, we have 3D holographic ads on the top of the kiosk.  Second, at the touch screens, we have coupons, promotions, giveaways and sweepstakes that advertisers pay for.  And lastly, we have banner advertising on the bottom of the touch screens.

  • Our Dual Station 3DEO platform can produce approximately $8,000 per store per month in total ad revenue.  With a cost of installation of approx $13k, the maximum payback could be 2 months when fully deployed.

  • Our Single Station 3DEO platform can produce approximately $2,500 per store per month in total ad revenue.  With the cost of installation of approx $8,000, the maximum payback could be 3 months when fully deployed.

  • These numbers make the 3DEO revenue model quite profitable when implemented in the top 10 and top 20 media markets of the country.  The company did not anticipate any significant media revenues during our trials in Portland, which is ranked #24.

  • By way of example: 1600 screens installed = 52M

  • In discussions with major retailer, 5000 locations, = over 150M very profitable

  • Please describe the planned rollout of 3DEO.

    • PVHO has publically announced a total of over 1000 retail locations seeking to install either our 3DEO platform, or one of our 3D holographic screens.

    • PVHO has also signed an additional 800 grocery store locations yet to be announced publically due to confidentiality limitations.

    • Currently, the company is beginning to redeploy 27 3DEO kiosks in Southern California scheduled for the first quarter of 2010.

    • The planned rollout will continue throughout the year focused on the implementation of the top 10 markets, followed by the top 20 markets.  With input from advertisers, and several media agencies, PVHO will be leading the implementation starting in LA, NY, and Chicago – the top 3 markets.

    • Who are you major partners 1) for 3DEO placement and for 2) 3DEO advertising sales

      • Announced 47 Hispanic grocery stores in Southern California, 800 convenience stores in New York – both top 1 and 2 markets.  The retail convenience stores are associated with major gasoline retailers like Shell, ExxonMobil, BP, and others.

      • In advertising sales, we’ve announced contracts with major media buying agencies including Adcentricity and ad sales groups like LocalAdLink.  Under confidentiality, we’re waiting to announce a recently signed contract with another major media buying agency.

      • Further, due to confidentiality agreements, unfortunately, we cannot name names, however, we can represent that we have letters of intent from several Fortune 500 brands that are looking forward to joining the 3DEO platform as we continue our rollout, but have used them as very strong committed references for some of our investors.

You have partnerships with some of the wealthiest fortune 500 companies, of the likes including: Google, IBM, McDonalds, Intel, Kroger. These companies fund millions each year for new projects and developments, are you currently in talks to receive any of these bonuses which would help you achieve a more positive balance sheet, and thus ease your ongoing business operations?

• While PVHO has announced some very strong partnerships including Intel, Microsoft, Daihatsu/Toyota, Unisys, I can tell you that we are in discussion with several major companies regarding potential strategic investments that would open up market channels for projects and developments worldwide.

In your latest 10-Q it states, “Given our plans and expectation that we will need additional capital”, do you feel positive that you may achieve this capital through a partnership funding rather than issuing shares thus diluting stockholder value?

• The company feels very confident that as we continue to successfully launch the 3D platform both domestically and internationally we’ll begin to cross over the threshold of options that will provide several alternative funding structures, both traditional and non-traditional.  We are committed to maximizing shareholder value and minimizing dilution for everyone.

A lot of investors are worried with regards to the many warrants and secured promissory notes, some of which including the Company’s 3DEO kiosks… Going forward, do you foresee more of these entering the company’s financial stream?

• The last 18 months have been tough times for all companies around the world, and we’ve lost a lot of companies, large and small, high tech and low tech.  PVHO has made some very difficult decisions given the capital markets, but we’ve been committed to survive 2009 and ready ourselves for a great future.  Like most companies, the tough choices are the ones you’ve got to make to survive.  Provision has survived, and that is one of our greatest accomplishments this year.  It’s no secret; the capital markets have been tough.  They are even tougher on companies like Provision.  However, as bad as 2009 has been, we’ve rejected far more ‘bad’ structures than you can imagine.  We’ve not been desperate and that has got us through.  While we cannot foretell future structures, I can assure you that we are committed to getting the best financial structures for the company given the time and circumstances surrounding the particular situation.

On your advertisers page you list companies such as: Budweiser, BIC, Revlon and Disney… can you describe your connection to them?

• These companies and many other ones have been advertisers on our 3DEO platform

• What company in the display advertising space is comparable to Provision?

  • First, there is no other 3D advertising network currently in retail

  • Second, in the 2D display advertising space, there are a few large companies

  • PRN – the Walmart TV network

  • Care Media Network – doctors offices

  • Captivate – office buildings

  • National Cinemedia – movie theaters

  • Zoom Media – bars, college campuses, gyms

What competitor analysis have you done, and please describe it.

• See competitors from 2 perspectives: 3D technology, and Digital Media companies

• We’ve seen and discussed current 2D digital media companies and we know who they are and what their strengths and weaknesses are.

• In 3D; we’ve evaluated the current and pending 3D technology platforms, and have continued to conclude that we remain unique and first to market in DOOH. While there are many ways to achieve 3D, as has been demonstrated over the last 50+ years, most technology based companies have taken a very traditional approach, from either using 3D glasses, or using traditional flat screens.  While all very cool, they have their limitations.  We chose a simpler path that was a little unconventional, resulting in a 3D holographic product, which continues to amaze our customers and consumers alike.

• Where would you like to see Provision in two years? In Five years?

  • 2 years; deployed a minimum  of  5000 locations in DOOH with revenues north of $150M

  • 5 years;  I’d like to see PVHO cross over from the out of home market to the home consumer market, where our technology could be the standard 3D holographic platform on all the game consoles and perhaps 3D TV without glasses.

  • Clearly, we’ve got tremendous opportunities to cross over into many other market channels, like education, medical imaging, gaming, and more.  So, we’re very excited about the future.

  • If Provision were to be acquired, who do you see as a potential buyer?

• In media: Care Media, NCM, NBC/Comcast, Google

• In Technology: Samsung, Sony, LG, Cisco

• Home Consumer Market: Microsoft, Apple

Disclosure: Long PVHO

TheMarketFinancial was compensated 300,000 common shares for a three month investor relations contract with Provision Holding, Inc.

A young and savvy, yet experienced and accomplished investments mogul since ‘01; Michael has amassed a fortune as a private self investor. Recently starting his own successful blog and turning it in to a corporation — MIV Investments Inc., a company offering advice to thousands of people worldwide and attracting contracts from various reputable sources. His articles and publications have been linked to Forbes, CNN Money, Reuters, Bloomberg, and many other top worldwide mainstream media sources.

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