Originally posted by DreadPirateRoberts
I feel like the the deal Buddy has with Thor has been forgotten about by many, yet it's a large chunk of BUD's revenue and I believe it has a lot of potential for further growth. I went back and read through the announcements, watched some webinars, and did some googling and thought I'd summarize what I found as a review for those who are interested:
Thor is the manufacturer of several brands of RVs, one of which is Airstream. Airstream trailers, built in Ohio, have a distinct "bullet" shape and color. According to wikipedia, Airstream was manufacturing approximately 3,744 trailers per year as of 2016, although I suspect this has increased. 2017 was a record year evidently:
https://www.cnbc.com/2018/02/26/airstream-to-expand-production-to-meet-booming-rv-demand.html. That article lists manufacturing at 95 per week. If we figure 50 weeks of production that comes to 4,750 per year.
Airstream's flagship RV is the "classic":
https://www.airstream.com/travel-trailers/classic/. The base model starts at just over US$150,000. The 2019 models of the classic all come with "Smart Control Technology," (
https://www.airstream.com/travel-trailers/classic/smart-control-technology/) which is powered by Buddy Cloud. (Jump to minute 12 from the webinar:
Airstream owners get one year of the Smart Control Service for free, and after that there are packages available on either a monthly or yearly basis. Buddy gets a royalty for each RV that has the service switched on (even during the free trial period).
In addition to all 2019 Classic models coming equipped with the Smart Control Technology, Airstream also sells a $1000 upgrade kit that can be added to any current trailer:
http://fortune.com/2019/02/21/airstream-att-connectivity-airstreamlife-vanlife/.
Buddy also charges Thor a monthly retainer, which is currently US$100,000 per month. This agreement (
https://buddy.com/wp-content/uploads/2018/11/BUD.ASX-Market-Release-Airstream-Nov-2018.pdf) was signed at the end of Nov 2018, and so the 4C from Jan 2019 only included the December payment. In the current quarter, we can expect $300,000 in revenue from this part of the agreement (which is good for one year and can be canceled with 60 days notice).
Overall, I think the deal with Thor is pretty darn good. What we don't know is how much BUD get's per trailer, but even at a few bucks it can add up nicely. How many RV owners will sign up for this service? Hard to say, but these are not cheap trailers so I don't see the cost being an issue. I have no idea how valuable the ability to monitor and control the trailer is to an owner, but it seems everything these days is becoming smart/connected so I would expect this to be a feature many owners would like.
This is one of BUD's revenue streams that seems to be doing really well. And hey, how about LifX in Airstreams??
DPR, Airstream was 20% down on manufacturing in 2018, so there has been a drop in orders. I am unsure as to cellular coverage at camping sites in USA, but if Australian logic was applied, it would be worth it just for the 4g LTE booster. I also believe the retrofit kit was available to be fitted to all of the old Airstream models, I may have read that wrong though.
In context though, if you are paying USD $150,000 for a trailer, what is a $20-30 month subscription fee for connectivity, remote controlling and resource management? One could even argue a reduction for insurance given the trailer can be located anywhere.
I like the long list of brands Thor has under its banner, most notably Jayco, every other van in Oz is pretty much one of them, if you can monitor resources and not have to go climb up a hill 200m to the SE of your campsite to get a feint signal at 6am to 6.30, I can see it being a very popular product here too.
