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French Morning Media Group

Digital media platform for French expats and Francophiles

$8,404

Raised from 29 investors

Min: $50,002

Max: $200,002

Security Offered

Preferred Shares

Minimum Investment: $105.91

  • Approximately 500,000 unique visitors each month to its websites

  • In 2018, the company generated over $1.1 million in revenue, representing a ~20.3% year-over-year increase

  • Subsidiary websites MauditsFrancais.ca and London.FrenchMorning.com have reached 120,000 monthly users

  • Subsidiary website Frenchly.us increased traffic by 135% year-over-year from 2017-2018, and reached 110,000 monthly users in January 2019

Executive Snapshot

French Morning Media Group (FMMG) is an online media group for French expatriates and Francophiles. It has four subsidiaries: French Morning in the U.S., Maudits Français in Canada, French Morning London in the UK, as well as Frenchly, an English version dedicated to English-speaking francophiles. The company provides news, current events, and local information guides for cities popular with French expats. It has seen steady growth from 2017 to 2018, reaching approximately 500,000 unique visitors each month—a 120% year-over-year increase. The company intends to continue this expansion abroad, with a focus on areas in the Asian markets, where it intends to select two to four cities to launch new editions.

In 2018, FMMG acquired the media company French Radio London, which allowed it to reach a broader audience in the UK. French Morning also launched a French language publication in Montreal, Maudits Francais, that has reached 70,000 monthly users.

The company previously raised $293,276 in a Series Seed Preferred round that consisted of $208,276 raised through the MicroVentures platform, along with $85,000 from three angel investors in 2017.

Terms

Investment Terms*

Security Type: Series Seed II Preferred Stock

Round Size: Min: $50,001.98 Max: $200,001.69

Price per Share: $6.23

Pre-Money Valuation: $3 million

Conversion Provisions: Convertible into one share of common stock (subject to proportional adjustments for stock splits, stock dividends and the like) at any time at the option of the holder.

Perks

Perks

French Morning Media Group will provide the following “perks” to investors in addition to the shares purchased, at each level of investment defined below, after shares are issued to the investor. All perk thresholds are inclusive of previous perk thresholds.

$100+

  • A personalized “thank you” on one of French Morning’s social media accounts

$500+

  • The perk listed prior, plus:
  • French Morning mug (shipping included for continental U.S. only)

$5,000+

  • The perks listed prior, plus:
  • Invitation to French Morning’s annual Investor’s dinner in New York City for the next two years (travel not included)

$25,000+

  • The perks listed prior, plus:
  • Become a member of the French Morning advisory board; an opportunity to sit along with prominent member of the French American community

Overview

Opportunity

With increasing globalization, more individuals are traveling for work,i telecommuting,ii or even relocating abroad.iii In fact, according to the International Organization for Migration, 244 million people lived outside their country of origin in 2015.iv France, in particular, has experienced substantial growth in the number of individuals living outside its borders; about 1.8 million French nationals have registered as living abroad as of 2017, though the estimated number that includes non-registered expatriates is believed to be 2.5 million, according to the French Foreign Ministry.v French expats have cited professional reasons as well as a desire to experience new cultures as motivation for the move.vi

Living abroad can be an exciting new adventure…and a challenge. Beyond dealing with the language barrier and culture shock, expats struggle with familiarizing themselves with new government regulations, securing steady income, and handling housing issues.vii As a result, a growing number of expats are dealing with depression or anxiety.viii While these individuals acclimate to new lives outside their home country, some may still strive to remain connected to home. Take the 2017 French elections for example, where over 1.3 million French citizens living abroad registered to vote.ix

FMMG is an online media company focused on building a community around meaningful news and content for Francophiles—defined as a person who has a strong liking or strong admiration for France or the French—and French expats around the world. The company’s three websites frenchmorning.com, frenchly.us, and mauditsfrancais.ca currently target French expats and Francophiles in the U.S., Canada, and the UK. A desire to keep up with French news and culture has created an opportunity for content specifically geared towards French expatriates. Combining a French community-based magazine with local guides to cities across the U.S., Canada, and the UK, FMMG aims to capitalize on this niche audience.

Founded in 2009, FMMG provides a link to French politics, current events, and culture for the French-speaking community living abroad, plus local guides for cities popular with French expats through its websites FrenchMorning.com. The site has seen steady growth from 2017 to 2018, reaching approximately 500,000 unique visitors each month, a 120% year-over-year increase. FMMG’s English language website—Frenchly.us— increased its traffic by 135% year-over-year as well, to an average of 110,000 monthly users. Additionally, the recently launched French language MauditsFrancais.ca website in Montreal has reached 70,000 monthly users and French Morning London 60,000. Over the last year, FMMG has also invested heavily in video content on YouTube and Facebook. It now has more than 78,000 subscribers on YouTube and over 100,000 likes and followers on Facebook.

Product

French Morning

Frenchmorning.com targets French expats. The site is presented in French and is organized into seven editions:  Los Angeles, New York, Miami, San Francisco, Texas, Washington DC, and London. The site is broken down into several sections that offer expats resources to stay up to date with related current events and culture.

Not only does French Morning deliver news, the site provides practical guides to learn English, find jobs, manage finances, and navigate real estate markets.

French Morning also includes an Ads section, where visitors can both post and search for personalized services ranging from music lessons to babysitting, and a Directory section, where users can find information on professional services such as law firms, real estate firms, and transportation companies.

Frenchly

Frenchly.us is published in English and is designed for American Francophiles. The site’s material covers content revolving around French-related current events, entertainment, food & wine, style, and travel.

Maudits Français

MauditsFrancais.ca is published in French and targets French expats in Montreal. The site is structured similarly to FrenchMorning.com, but the information is specifically centered around news and events set in the respective cities.

Use of Proceeds and Product Roadmap

FMMG plans to use the proceeds raised through this campaign to continue the expansion of French Morning outside of the U.S.

The company’s priority will be to grow in Asia. It plans to target two to four cities where it aims to open new editions. Approximatively two-thirds of the proceeds will go towards hiring new people in each of these new editions. The remaining third is intended for use in diversifying French Morning’s content formats and hiring a video journalist in Europe for the London branch.

Business Model

The company has two revenue streams:

  • Advertising: From directory listings to customized campaigns, the company offers a wide variety of services to assist advertisers in gaining leads and building brand awareness. The company also has an integrated studio—French Morning Studio—which aims to help clients craft the story, media, and execution strategy for their campaigns through social media assets and/or video series.

Events: The company organizes a wide range of events designed to bring its online content “offline” in order to deepen relationships with readers. Monetization of these events occurs through sponsorships and ticket sales. Sponsorships make up about two thirds of the revenue while ticket sales comprise the remaining one third.

User Traction

FMMG is experiencing growth across all its platforms. In total, it more than doubled its audience from 2017 to 2018, and it now has 6 million unique visitors across its multiple sites and 7 million page views. Its users have spent 5 million minutes on branded sites, and it has 110,000 email subscribers. FMMG has eight local editions in eight major metropolitan areas around the world including New York, Washington DC, Miami, San Francisco, Los Angeles, Texas, London, and Montreal.

The company now receives approximately 500,000 unique visitors each month to its websites. This represents a 120% year-over-year increase. From 2017 to 2018 its English language website—Frenchly—had an increase in traffic of 135%. It recently reached 110,000 monthly users in January 2019.

In 2018, FMMG acquired French Radio London which increased French Morning’s geographic reach in the UK. Since the transaction, French Radio London was incorporated into the flagship website FrenchMorning.com and renamed French Morning London. It currently reaches more than 67,000 monthly users.

French Morning’s audience on social media saw the same kind of growth, as it now has a little over 100,000 likes and followers on Facebook and 78,000 followers on YouTube. Over the last year, the company has invested heavily in video, with a number of these products seeing traffic reaching several millions of views, both on Facebook and YouTube.

Historical Financials

In 2018, FMMG generated $1,118,779 in revenue, versus revenue of $930,353 in 2017. In early 2018, a large number of clients renewed annual contracts, which is reflected by the large increase in revenue for the first quarter.

In 2018, expenses totaled $1,207,078, which is up ~15.2% from 2017’s total expenses of $1,048,064.

  • COGS (cost of goods sold) $165,491,
  • Operating Expenses $1,041,587
  • Within operating costs, the top expenses were
    • payroll costs $531,902
    • event costs $102,276

In 2018, FMMG generated a net loss of $84,627, versus a net loss of $117,831 in 2017, which represents ~28.1% decrease in the annual deficit.

Industry

Digital magazines provide consumers with increased convenience relative to print alternatives by allowing them to access content from virtually anywhere at any time. The number of digital magazine readers has been steadily on the rise, and now more than 20 million individuals in the U.S. alone consider themselves digital magazine readers. Before this digital disruption—caused by the internet—people were exclusively reading paper books, magazines, and newspapers. Now, they are turning to eBooks, eMagazines, and eNewspapers for their reading content. In 2017, 266 million eBooks were sold in the U.S., and around 15% of consumers have indicated that they read online newspapers on a daily basis with another 16% responding that they read them several times per week. The U.S. digital publishing industry has seen its revenue to grow to nearly $18 billion in 2018.x Additionally, according to Technavio, the global digital magazine publishing market is projected to surpass $35 billion in 2020. This growth is expected to be driven by increased internet access worldwide along with more improved accessibility options via smartphones and tablets.xi

In the U.S., the magazine industry alone generated around $28 billion in 2017, down 39% from a decade ago. However, although the revenue and time spent reading magazines has trended downward, the number of magazine readers has increased in the U.S.xii Globally, magazine publishing generated $91.9 billion in 2017. By 2022, revenues are expected to drop slightly to $88.1 billion. This in part is driven by consumers who are reluctant to pay for content, and intense competition for ad revenue amongst consumer magazine publishers (CMPs). With the revenue trajectory in decline, CMPs have begun to diversify product offerings (e.g. events, custom content, brand licensing, e-commerce and affiliate marketing) to grow revenues outside of their normal business channels.xiii However, because advertisers pay less for digital ads relative to print ads, the increasing market share from digital revenue is unlikely to offset the decline in print media revenue.xiv

Some publishers have found that consumers are willing to pay for content if it is consistently and significantly better than what can be found for free online. A few magazine titles have experienced recent success by introducing paywalls on their content. One publishing editor for The Spectator noted, "a big change is taking place in the market. There's now too much writing online, and in an era of fake news, where you get your analysis from has never been more important." Other publishers have noted that readers have begun to seek out factual and credible news to better understand the effects on governments and the economy. For example, The Economist and The Spectator, both of which are reputable news outlets, sold more issues between January and June 2017 than the same period in 2016. However, the opposite is true for celebrity, gossip, and fashion publications. Titles such as Vouge, Marie Claire, and Vanity Fair experienced a year-over-year decrease in sales between January and June 2017, ranging from 3% to 10%, as they have struggled to strike a balance between digital and physical print content.xv

In the ninth edition of the Magazine Media World Report, the International Federation of Periodical Publishers (FiPP) identified a resurgence in consumers’ willingness to pay for content. Attributed to millennial readers, subscription sales have rebounded, due in part to millennials’ habit to pay for content via subscription (e.g. Netflix and Spotify). Some also point to the fact that millennials may be more apt to pay for physical print media as a break from the hours they spend daily in front of a computer screen.xvi

In 2018, capital investments in the publishing industry totaled $36.7 billion across 493 deals. This represents a 5.7% year-over-year decrease in capital invested and a 25.8% year-over-year decrease in the number of deals. Over the past 11 years, $335.8 billion has been invested across 7,602 deals. 2011 saw the most capital invested in a given year at $50.7 billion, while 2015 had the highest number of individual deals at 925.xvii

In 2018, capital investments in the publishing industry totaled $36.7 billion across 493 deals. This represents a 5.7% year-over-year decrease in capital invested and a 25.8% year-over-year decrease in the number of deals. over the past 11 years, $335.8 billion has been invested across 7,602 deals. 2011 saw the most capital invested in a given year at $50.7 billion, while 2015 had the highest number of individual deals at 925.

Competitors

France-Amérique

First published in 1943, France-Amérique is a French magazine published throughout the U.S. that covers news, culture, business, education, and food in America. The bilingual magazine publishes monthly issues and targets French expatriates, Francophones, and American Francophiles. It currently sells physical copies in 29 states and Washington D.C.xviii France-Amérique has 11 official partners, including TV5Monde, AirFrance, and the Paris American Club.xix In the U.S., a one-year subscription to its print magazine (12 issues) is $89.99.xx

Le Figaro

First published in Paris in 1826, Le Figaro is a daily national French newspaper that publishes stories about the economy, politics, sports, culture, and lifestyle. Subscriptions to the newspaper are €1 for the first month and €9.90 per month without commitment thereafter. Subscriptions feature unlimited, ad-free access to the newspaper across multiple platforms.xxi In January 2017, Le Figaro had over 336,000 issues in circulation.xxii

Le Monde

First published in 1944, Le Monde is a French daily evening newspaper, available in print and digital formats, that publishes stories about politics, culture, sports, and science. Subscriptions are priced at €24.90 per month and provide access to all content on multiple platforms with limited advertisements and exclusive newsletters.xxiii In 2017, Le Monde had an average circulation of 301,528.xxiv In September 2017, Le Monde entered into a strategic partnership with competitor Le Figaro to scale its digital advertising offers. Called Skyline, this new partnership allows advertisers to run ads across all of the combined media brands operated by both companies.xxv

French District

Started in 2008, the French District is a news site for French expats and Francophiles living or interested in living in the U.S. The site has local editions, including Florida, New York, California, and Washington D.C. The site provides its visitors with information on current events and guides to professionals and businesses. Since its inception, the French District has written more than 10,000 articles and has sent about 450 newsletters a year.xxvi

Courrier International

Started in 1990, Courrier International tracks articles covering politics, economics, and cultural topics from around the world and translates them into French. The company’s weekly newspaper and digital edition offers its readers a variety of selected materials from the foreign press, translated into French. The content of the newspaper and its website come from more than 1,500 sources worldwide.xxvii An online-only subscription costs €1 for the first month then €6.90 per month. Adding in the weekly paper brings the monthly subscription to €9.90 per monthxxviii

France Today

First published in 1985, France Today is a magazine and website that offers two different editions; one for UK readers and one for international readers. Each magazine consists of articles and content about French travel and lifestyle. France Today is available in over 30 countries, including the U.S., Canada, Russia, China, and Japan. The company’s website receives over 250,000 visits per month.xxix For readers in the U.S. and Canada, a one-year subscription (six issues) costs $50, and a two-year subscription (12 issues) costs $90.xxx

Team

Emmanuel Saint-Martin

CEO

Born in France, Emmanuel started his career as a journalist, working as a reporter for the weekly magazine company Le Point. During his time there, he covered topics such as sports doping, education, Afghanistan, and the war in Iraq. He then moved to New York in 2004, where his wife began work for the United Nations. In 2006, he worked as a correspondent for the news channel France 24. In 2009, he founded French Morning as a side project. Since its founding, French Morning has expanded its reach to the French-American community with six editions in the U.S alone. Emmanuel also makes frequent guest appearances on CNN, the “Charlie Rose Show,” the “Brian Lehrer Show,” and others to give his commentary on French current affairs. He has published several French Books, including “L’Arrogance Française” and “Et surtout n'en parlez à personne; l'Affaire Madoff.”

Alexis Buisson

Managing Editor

Alexis discovered journalism as a teenager through cable news channels, and went on to create his high school's newspaper and started volunteering as a host and news flasher in a Paris radio station. He studied journalism for a year at Boston University (BU) as an exchange student in 2005-2006, during which time he also worked for the student newspaper and wrote his first feature story on the devastation of Hurricane Katrina in New Orleans. Alexis moved to New York two years later and began freelancing for various French and French-speaking news organizations, covering presidential campaigns and the effects of the Great Recession among other topics. He joined FMMG as a freelancer in 2007 and became Managing Editor in 2011. In addition to his position at French Morning, Alexis freelances for various French publications, including the daily newspaper La Croix.

Romain Poirot

Advertising Director

Romain leads the U.S., UK and Quebec business development teams in all aspects of online growth, customer relationship management (CRM), partnerships, and events. His expertise is in online media and entrepreneurship, and he has more than six years of experience in online media sales management. Prior to FMMG, Romain helped online media start-ups grow and advance to new levels. He holds two bachelor’s degrees, one in International Marketing and one in International Business from EM Strasbourg in France, and PACE University in New York, respectively.

Past Financing

In 2017, French Morning Media Group raised $293,276 in a Series Seed funding round. The round consisted of a  crowdfunding campaign through the MicroVentures platform that raised $208,276  as well as investments from three angel investors totaling $85,000.

Discussion

Investment Risk

An investment in the company is speculative, and as such is not suitable for anyone without a high tolerance for risk and a low need for liquidity. You should invest only if you are able to bear the risk of losing your entire investment. There can be no assurance that that investors will receive any return of capital or profit. Investors should have the financial ability and willingness to accept the risks (including, among other things, the risk of loss of their entire investment and the risks of lack of liquidity) that are characteristic of private placement investments. There will be no public market for the securities being offered, applicable securities laws will restrict any transfer of the securities, and the securities will not be transferable without the company’s consent.

The information provided herein is not intended to be, nor should it be construed or used as, investment, tax or legal advice, a recommendation to purchase, or an offer to sell securities of the company. You should rely on the offering statement and documents attached as exhibits to the offering statement when making any investment decision. An investment in the company is not suitable for all investors.

Litigation

On April 18, 2019, an action for copyright infringement was filed against French Morning Media Group alleging an unauthorized reproduction and public display of a copyrighted photograph of Emmanuel Macron. The plaintiff seeks monetary relief under the Copyright Act of the United States. A July 10, 2019 filing informed the Court that the parties have reached a settlement in principle and request that the action be administratively dismissed with leave to reopen if the plaintiff has not filed a withdrawal within 60 days.

Company Risk

The company’s industry is highly competitive, and the company may not be able to compete effectively against the other businesses in its industry. The company is subject to a number of significant risks that could result in a reduction in its value and the value of the company securities, potentially including, but not limited to:

  • Rapidly changing consumer preferences and market trends,
  • Inability to expand and maintain market acceptance for the company’s services and products,
  • Inability to gain access to international markets and comply with all applicable local laws and regulations,
  • Inability to achieve management’s projections for growth, to maintain or increase historical rates of growth, to achieve growth based on past or current trends, or to effectively manage rapid growth,
  • Inability to develop, maintain and expand successful marketing relationships, affiliations, joint ventures and partnerships that may be needed to continue and accelerate the company’s growth and market penetration,
  • Inability to keep pace with rapid industry, technological and market changes that could affect the company’s services, products and business,
  • Technological problems, including potentially widespread outages and disruptions in Internet and mobile commerce,
  • Potential costs and business disruption that may result if the company’s customers complain or assert claims regarding the company’s technology,
  • Failure to adequately address data security and privacy concerns in compliance with U.S. and international laws, rules and policies,
  • Performance issues arising from infrastructure changes, human or software errors, website or third-party hosting disruptions, network disruptions or capacity constraints due to a number of potential causes including technical failures, cyber-attacks, security vulnerabilities, natural disasters or fraud,
  • Inability to adequately secure and protect intellectual property rights,
  • Potential claims and litigation against the company for infringement of intellectual property rights and other alleged violations of law,
  • Difficulties in complying with applicable laws and regulations, and potential costs and business disruption if the company becomes subject to claims and litigation for legal non-compliance,
  • Changes in laws and regulations materially affecting the company’s business,
  • Liability risks and labor costs and requirements that may jeopardize the company’s business,
  • Dependence on and inability to hire or retain key members of management and a qualified workforce,
  • Ongoing need for substantial additional capital to support operations, to finance expansion and/or to maintain competitive position,
  • Issuance of additional company equity securities at prices dilutive to existing equity holders,
  • Potential significant and unexpected declines in the value of company equity securities, including prior to, during, and after an initial public offering, and
  • Inability of the company to complete an initial public offering of its securities, merger, buyout or other liquidity event.

Endnotes

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