INVESTOR NEWSLETTER February 2021

Investor Newsletter – February 2021

In this month’s investor newsletter, we look at the key growth segment of home fitness, a rapidly evolving market with music at its core. We consider fitness trends and the role of 7digital, catch up on client news and put Apex Rides under the spotlight.

Update From CEO Page 2

News Bites - FORME Life and GrandPad Page 3

Spotlight on Apex Rides “Music has become critical to Page 4 online fitness services amid the Covid-19 pandemic; Industry News & instructors have become like Insights Page 5 DJs” - Wall Street Journal Investor Newsletter February 2021

UPDATE FROM OUR CEO Music is central to the fitness market – and now more than ever

This past year of global lockdowns and the accompanying shift to home workouts has highlighted a fact well-known to fitness innovators and trainer teams everywhere. That is, the vital role digital music plays. “We expect to

For 7digital, it is a hugely exciting market and we are positioned to be the sign about six dominant music solution provider to the home fitness industry. deals in 2021, Music is such a powerful tool, creating emotional responses that boost generating happiness and enhance quality of life. Our newsletter last month highlighted the scientific evidence for music’s health benefits. This substantial month, we focus on its importance to the fitness industry and our clients. year-on-year Music increases enjoyment, motivates, makes hard work less arduous and keeps customers coming back for more. revenue growth

Digital services grow in popularity every day and home fitness services in this place music at the heart of their appeal. 7digital offers these service segment“ providers a full music solution including a pre-licensed music catalogue, content delivery, reporting and rights-holder payments, curation and playback of playlists for recording live classes. Paul Langworthy In the recent past, even big fitness players have occasionally fallen foul of Chief Executive Ofcer licensing rules. But because we take care of all the back-end technicalities, our clients can focus on providing a great product and service to their customers, worry-free.

We expect to sign about six deals in 2021, generating substantial year on year revenue growth in this segment.

“We are positioned to be the dominant music solution provider to the home fitness industry“

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NEWS BITES An immersive and engaging home fitness experience, FORME Life transforms an elegant, full-length mirror FORME Life signs into a personal strength studio for body and mind. “FORME Life looks like an expensive mirror but is in fact as new client a touch screen, voice-activated, wall-mounted studio that also has attachable equipment,” said Vogue magazine. The company has also been featured on At the end of February, 7digital added connected Bloomberg and CNN. fitness company FORME Life to its growing roster of clients in the home fitness market. The FORME Life hardware and programming launches in Spring 2021 and will be available in the FORME Life trainers will utilise 7digital's music- continental US for the first phase of the rollout. platform-as-a-service to access a licensed catalogue to cache or stream music content that can then be “Of all the B2B providers, 7digital have the best synchronised with a training video and played on- solution and own the ‘fitness' space," said FORME demand and live. Life. "Their support and knowledge is second to none, plus they were the most responsive and knowledgeable during the tender process. We have “Of all the B2B providers, had a fantastic experience working with their team so far and their support is excellent.” 7digital have the best solution and own the Find out more about our new client on ‘fitness' space.” www.7digital.com - FORME Life

A new era of connectedness for Europe’s older generation

GrandPad, the world’s first purpose-built tablet for lockdown restrictions. 7digital’s music platform has the over-75s, is widely used in the US to counteract been integrated with GrandPad since 2016. Our loneliness and connect with family, friends and contract was renewed last year, and users have carers. The good news is, since our client teamed up access to more than 30 million songs and with Ericsson and Orange Belgium, the tablet has customised playlists. become available on the other side of the pond too. “In a world where health concerns and limited This means older citizens in the UK and Ireland can mobility may distance seniors physically and now buy GrandPad via specialist retailer TechSilver – emotionally, this technology can help reduce the and there are plans to expand to other European negative health impacts created by isolation and countries in future. loneliness and make family caregiving much easier," says Scott Lien, GrandPad’s CEO. GrandPad features a pre-loaded music service, as well as other stimulating activities. Because of its 4G LTE, no pop-ups, built-in security and ease of use, it is Learn more about our partnership with simple for older adults to stay in contact, even amid GrandPad on www.7digital.com 3 Investor Newsletter February 2021

UNDER THE SPOTLIGHT Apex Rides

In September, 7digital signed a 12-month contract with smart-bike and in-home fitness platform Apex Rides. Following a successful launch, the London-based company is powering customer fitness classes using our playlisting tool and global music catalogue.

As the newest kid on the block in the UK exercise bike market, Apex Rides’ fresh, ergonomic design, state-of-the-art tech and gamified software, plus accessible pricing, have quickly attracted attention. Pre-orders of its bikes hit 2,500 in the first six months. In January, the company announced it had raised £3 million, including backing from ex Formula 1 boss Eddie Jordan and Capita founder Sir Rod Aldridge, which will be used to fuel app and hardware development, wider content creation and international expansion.

“Beautifully designed and sold at a more accessible price” - Forbes

HOW DOES IT WORK? WHERE DOES MUSIC FIT IN?

Exclusively partnered with boutique fitness pioneer 7digital’s platform ensures instructors have access to Boom Cycle, Apex Rides provides a full bike and fully cleared and compliant music, enabling subscription service with live and on demand customised playlists curated by genre, tempo or interactive classes. Bluetooth technology connects to theme to fit a particular class ethos. users’ iPads or iPhones so they can stream and take “We recognised from the start that music is an part in classes. Real-time interactive leader boards essential and powerful ingredient in the context of measure RPM and resistance, with Apex reward fitness and wellness, and we needed to make sure points up for grabs. our instructors had the tools to give members the best overall user experience,” says Simon Cook, who co-founded Apex Rides in 2018 with Charlie Lucas.

Read all about our contract with Bikes are available from the Apex Rides website and Apex Rides on www.7digital.com John Lewis retail store.

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INDUSTRY NEWS & INSIGHTS Fitness powers up

The right music reduces perceptions of exertion by 12%, increases the effects of exercise by 15% and boosts endurance by 15%

For many of us, local gyms were a haven in our daily In the UK alone, home gym equipment sales spiked or weekly routines. They were a space to de-stress, more than five thousand per cent. The US market is improve our fitness or even socialise against a predicted to rise from $11.16bn in 2018 to $23.27bn background of our favourite pumping beats or a by 2025 - with 63% of regular exercisers likely to spot of something quieter for, say, a yoga class. Then retain a home/gym mix post-pandemic according to along came Covid-19. Fortune Magazine.

It seemed the $94bn global fitness industry would be Research by Brunel University for LesMills showed hard-hit by the resulting enforced closures. Yet fears on-beat music was key to enjoyment - inspiring, of its demise have been, as Mark Twain once said, engaging and keeping members coming back for greatly exaggerated. We have seen a transformational more. The right music reduced perceptions of shift to home fitness among the 183 million paying exertion by 12%, increased the effects of exercise by subscribers and other casual exercisers, complemented 15% and boosted endurance by 15%, among other by a Millennial and Generation Z-driven demand for benefits. music. Great music is the key to any good workout, and with ‘Music has become critical to online fitness services home fitness set to become commonplace in our amid the Covid-19 pandemic; instructors have health regimes even after the pandemic, we are become like DJs,’ says the Wall Street Journal. likely to see many more music-based apps come to the market.

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