NXOI: Shareholder Update

FORT LAUDERDALE, Fla., July 19, 2011 /PRNewswire/ -- Next One Interactive, Inc. (OTCBB:NXOI),  

Dear Shareholders,

We have faced many challenges over the past year and I wanted to take this opportunity to highlight some of the significant changes that have taken place within Next One Interactive. Our goal and mission is to create a company that can deliver unique "travel and real estate content" across multiple platforms (Television, Video on Demand TV, Mobile and Internet), thereby recognizing and benefitting from the convergence of these technology platforms. When achieved, it will allow the consumer to watch television, obtain information and transact across multiple distribution media platforms.

To accomplish our goal, the Company, over the last several months, has reduced its efforts on the R&R TV Network and has instead focused on the Video on Demand platforms. The 3 main divisions and their supporting platforms within the company are:

1. The R&R TV Network
2. Travel Platforms including applications for Video on Demand (VOD)
3. Real Estate  Platforms including application for Video on Demand (VOD)

I would like to talk about each of the divisions and recent changes that have occurred.

1. The R&R TV Network

The best known of the divisions is the R&R TV Network. At its peak the Network reached a potential viewership base of close to 30 million households and carried significant programming content for both travel and leisure. The Company's goal from inception had been to grow the distribution of the R&R Network to a targeted 50 million households. Upon achieving this goal the network would:

1) Serve as a key driver for Video on Demand (VOD) and

2) Capture significant advertising revenue due to the reach.

Unfortunately, after several attempts to hit this 50 million household target, it became clear that for reasons ranging from a weak economy for advertisers in both the "travel and real estate" industries to the high costs of operations, the R&R TV Network was going to have to curtail its R&R Network operations or even suspend. The R&R Network operations Company after reviewing several options late last quarter, we curtailed our distribution platform and began negotiations for alternative costing structures and distribution. As of today, we have significantly reduced our operational costs of the network from roughly $850,000 per month to roughly $75,000 per month. We have continued negotiations with multiple parties in the travel, real estate and media industries and believe that we will again be able to expand this platform in the near future BUT will only do so in conjunction with sponsorship and advertising support. While the R&R Network was the most visible division of the Company, clearly it was also the most expensive to operate and had the longest timelines to positive cash flow. While we would like to revisit network growth in the future, it is my belief that the Company's greatest opportunities remain in the "interactive and VOD platforms" as they afford us multiple revenue streams (advertising, commissions and referral fees on real estate and travel) and the ability to achieve positive cash flow sooner. It is in these areas that we will continue to focus the bulk of our efforts.

2. Travel Platforms including applications for Video on Demand (VOD)

During the last quarter the Company focused its travel efforts on two key programs. These include the development and continuing refinement of our R&R Travel Advantage program and a supporting beta test platform for Travel VOD with a major cable operator. The R&R Travel Advantage program was derived from the Company's ability to accept discounted vacation products, such as resort stays and cruises, in exchange for advertising time on its TV and Video on Demand platforms. Membership is $495 and includes a choice of a 4 day cruise or a 7 day luxury resort stay for two people. Company shareholders can become members for $149 by going to www.rrtvadvantage.com and entering the promo code - "owner".

To date, we have announced two outside groups that have decided to utilize some of our travel certificates and product offerings. Additionally, there are several groups with whom we are having ongoing negotiations for this program to be a direct to consumer/loyalty and/or an incentive program. The costing structure of this program has largely been absorbed and it is our hope that we will develop a number of new partnerships and be able to acquire a significant distribution platform for these specialty priced vacation products over the next quarter.

3. Real Estate Platforms including applications for  Video on Demand (VOD)

One of our major initiatives for the last two years has been the rollout of a National Real Estate Program on VOD, Web and Mobile platforms. To this end, we have developed and introduced a new technology product, which we are marketing to the real estate industry under the name of "Home Preview Channel" in conjunction with its real estate partner - RealBiz Media. The product was officially unveiled in November 2010 at the national conference for real estate professionals, in New Orleans. The product is designed to sit on a real estate agent's computer screen giving them the option to convert their clients home listing to a video and instantly be displayed on over a dozen real estate websites as well as on the real estate VOD section of television in their market for a 30 day period – all for less than the price of most weekend newspaper ads. The response from the real estate industry has remained extraordinary and the consensus remains that the "Home Preview Channel" platform is by far the most innovative and cost effective marketing program available to the real estate industry.

We are working with several major players in the industry to begin new beta testing of a somewhat modified Home Preview Channel platform. Previous testing caused us to rethink our model and the costing structure of our distribution platforms. One major concern has been the need of the cable industry to complete the implementation of interactive and "request for information" (RFI) capabilities. With the fast advance of broadband, mobile and web television, the cable industry has aggressively started to push towards interactive solutions for television, but at present only a minority of the television distribution is capable of providing any meaningful interactive services. While we believe the platform has the potential to position us as an industry leader, it has come with a significant financial investment. Our goal is to continue to work with our partner RealBiz Media in efforts to introduce our VOD platform with RFI capabilities in most of the major cities in the USA prior to the end of the year. Clearly, this will have to be a staged rollout, but we are targeting a 5 to 10 city beta test of our platform late summer.

I believe Next One's investment in the Real Estate Video on Demand program has properly positioned the company for future growth that has the potential to quickly outstrip all other divisions. Once operating, target groups will include national and regional realtors, bankers, and mortgage brokers as well as a number of supporting service groups. Additionally, once the VOD real estate network is established, there is an immense opportunity to use this platform to capture some of the trillions of dollars of foreclosed real estate properties currently held in the US banking system that must be liquidated.

Conclusions

While the last year has been a very painful process for our directors, employees and shareholders, please know that we have been working diligently to reassess the business model and adapt it to the current economic environment. To this end, we have:

1. Reduced our monthly operating costs from roughly $1.3 million per month to $200,000 per month.
2. We have either eliminated or changed our programs with our major partners from a minimum monthly guaranteed payment in favor of a model that is primarily driven by a revenue share.
3. We have developed significant partners and unique platforms in both the travel and real estate arenas. I believe the implementation of these projects will finally occur during this quarter and the multiple revenue streams we have hoped for over the past few years will become evident reality.

There is no doubt that an additional financing will be needed to fully implement our programs. However, the reduction in operating costs by over $1 million per month combined with the significant potential of new contracts in both the real estate and travel arenas should greatly reduce the amount needed to allow us to execute the business model.

My hope is, this outline helps in a better understanding of our current VOD and Network positioning.

We certainly appreciate our shareholders continued support in turbulent times and will continue to work diligently towards growing our strategic relationships and technology in real estate, travel and media properties.  

Sincerely,
Bill Kerby
Vice Chairman & CEO

About Next One Interactive Inc.

Next One Interactive Inc. (NXOI) is a multi faceted media company specializing in Travel and Real Estate. Next One delivers targeted content via digital platforms including Satellite, Cable, Broadcast, Broadband and Mobile. Along with the full time R&R TV Network, the company will deliver its content and sponsors' messages on Video on Demand outlets enhanced by interactive applications. In today's digital market Next One Interactive delivers information and entertainment to consumers. The company has created multiple revenue streams including transactional commissions, referral fees, advertising and sponsorship.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plan, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks described in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by the cautionary statements that may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

CONTACT:
NXOI Corporate Headquarters
NEXT ONE INTERACTIVE, INC.
DIRECT:  954-888-9779
[email protected]
TWITTER: @RRTV & @RRADVANTAGE

SOURCE Next One Interactive, Inc.