TXI - THE BUSINESS
The TXI Group
TXI was established over nine years ago to develop Internet technologies and content and to capitalise
on the emerging role of the Internet in consumer entertainment. With over 250 foundation shareholders,
it has invested in system design R & D, project development and corporate structuring. With the ongoing growth in demand for streamed content, TXI began to research the merits of building its own
bespoke streaming Content Delivery Network (“CDN”). It quickly became apparent that to launch its
network, Adult Entertainment (AE), as has occurred throughout the evolution of the Internet, still
provided the fastest means to establish a large consumer base. AE also provides an economical manner
in which to test and perfect the network, while ensuring a rapid and substantial revenue stream.
Importantly, this should suffice to provide a timely and significant return on investment for TXI‟s
shareholders. Consequently, an adult product has been conceptualised that utilises TXI‟s in house
developed technologies and which will give TXI a unique and profitable position in the online market
place.
TXI now requires working capital to build its private Internet streaming network; to set up the tropical
Xisle resort and production facility; to commence the marketing campaign and to launch Xisle to its
intended target audience. TXI‟s intention is to achieve a subscriber base which will yield in excess of
150,000 simultaneous users at any given time for its CDN, within the first year after launch. Using the
aforementioned success, TXI intends to bring the Company to the stock market as soon as is
appropriate, TXI offers a unique opportunity for investors to participate in the development of a
streamed content delivery system, augmented by Adult Entertainment and Reality programming
products, at a time that is considered ideal for all three markets.
TXI’s Mission
TXI intends to create a network that is capable of providing sophisticated HD (High definition),
interactive streamed content to its customer base. TXI will market its Internet products, such as live
Adult Reality based shows and optimised media players to its own clients. To test the network and its
business model and to develop a rapid revenue stream, TXI intends to present its own content. Xisle
will be a live 24-hour interactive, HD streamed reality formatted online Adult Entertainment (AE)
website. Xisle will offer a membership-based online community a new experience in AE, at a
substantial discount to other main distributors of Adult Content. The TXI network will be capable of
delivering other non-adult content simultaneously. As a result, the network will be placed in a
separately incorporated Company and will comprise a substantial amount of the Company‟s initial
balance sheet asset value. TXI‟s intention is to garner a substantial client/subscriber base, by making
the Xisle website extremely well known for the provision of live interactive HD streamed Adult
Entertainment.
The TXI Network
The Network architecture will be designed in a manner that ensures a suitable platform for streaming
corporate and sporting events, news broadcasting, etc. The network will offer a level of delivery
efficiency, security, quality and interactivity that will render it highly competitive with its rivals.
Importantly, the network will be
easily scalable and highly
reactive to demand.
The Content Delivery Network
(“CDN”) will be launched using
TXI‟s own content (the Xisle
project), thereby achieving the
dual benefit of Xisle functioning
as the test mechanism for the
network and the network in turn,
providing a highly cost efficient
means to distribute Xisle.
The TXI Network is currently
designed to support 150,000
simultaneous
users
at
transmission speeds that average
in excess of 1Mb/per second as a standard. Its speed and resultant images are estimated to be equivalent
to television quality. This will become apparent when transmitting the signal from a home PC to a
television using an HDMI1 cable. The speed will be monitored, so that if a consumer‟s reception
1
The High-Definition Multimedia Interface (HDMI) is a compact audio/video connector interface for transmitting uncompressed digital
streams. represents a digital alternative to consumer analog standards such as Radio Frequency (RF) coaxial cable, composite video, S-Video,
SCART, component video, D-Terminal, and VGA. HDMI connects digital audio/video sources such as set-top boxes, Blue-ray Disc players,
personal computers, video game consoles, and AV receivers to compatible digital audio devices, computer monitors, and digital televisions.
HDMI supports, on a single cable, any TV or PC video format including standard, enhanced, and high-definition video along with up to
8 channels of digital audio. HDMI products started shipping in autumn 2003. Over 800 CE and PC companies have adopted the HDMI
specification (HDMI Adopters). In Europe, HDMI is included in the HD ready in-store labelling specification for TV sets for HDTV. HDMI
capacity drops, so will the rate of transmission to the consumer. Therefore, a customer should never
experience the “freeze” commonly associated with reception deficiencies at the consumer‟s end during
streaming. TXI will concentrate on four time zones, each with a 4 to 5 hour window; the Far East, with
Japan and South Korea being the major consumers; Western Europe and the East and West Coasts of
North America.
The Premise Behind the Content
Today‟s consumers have an everincreasing passion for the „Reality
TV‟ format and also for various
forms of Adult Entertainment
(AE). The former now exists in
many entertainment sectors; from
social to political, from crime to
competition. As yet, there has
never been an AE Reality format
show, on either TV or on the
Internet. There is little doubt that
such a presentation will be
popular. TXI believes that an
opportunity to gain 24-hour visual
access to the poolside in a tropical
hedonistic environment, including
possible participant interaction
with contestants involved in a
“Reality show”- style competition,
would be an appealing concept to a
large and broad-based adult
audience. Much like other Reality based formats, the ability to vote for and against contestants, as well
as to participate in the determination of the actual content being viewed, will be of paramount
importance in creating a sense of community and brand loyalty.
The Internet has now evolved beyond its earlier role of being a tool predominantly used for AE,
research and shopping. It is now seen also as a place to join communities of like-minded persons with
whom to interact daily. Big Brother has had a large viewer base, in many countries, which have
communicated their thoughts online, while watching the programme.
Meanwhile, the world of AE webcam viewing often operates in a community environment – with the
focus on the young women being viewed. Therefore, we have to conclude that this type of community
began to appear on consumer HDTV camcorders and digital still cameras in 2006. Shipments of HDMI are expected to exceed that of Digital
Visual Interface (DVI) in 2008, driven primarily by the Consumer Electronics (CE) Market.
has not yet evolved to its full potential and as such, only provide viewing material of a short term
entertainment value.
In summary, statistics show that the average viewing time on an AE site is less than 10 minutes, whilst
Big Brother‟s viewing time was clearly much longer.
Product Response
TXI‟s simple response to the aforementioned premises and to the perceived demand that they imply, is
to combine both predilections into a single product and, using TXI‟s own technologies and bespoke
streaming network, deliver it in a format that exceeds today‟s typical Internet community user‟s
expectations.
Xisle will be a hedonistic environment, where initially 26 men and 26 women will participate together
in a variety of situations. There will be three levels of filming, accompanied on the website by
corresponding viewing filters that will determine what can be viewed. These three different levels of
„explicitness‟ (minimal, soft and explicit) will be distinguished through metadata2. Contestants will be
filmed by both „spy cams‟ and roving cameras. The resulting content will be distributed via a magazine
with DVDs attached, through downloads via our network, or delivered by Internet streaming. Xisle‟s
membership will be able to vote during the 24-hour live broadcasts, for their favourite „actors‟ and
„actresses‟. Twice monthly, half the contestants with the lowest vote totals will be replaced by new
actors and actresses. Once Xisle has had time to establish a large viewership, and has been able to
gauge the public‟s preferences, then contestants will primarily be sourced from the viewers themselves.
Potential contestants will be determined though their submission of self-promotional material through
the Xisle website. This online material will allow the general public to vote them onto Xisle. All
contestants will initially receive a modest daily remuneration, whilst those that remain will be eligible
for substantial monetary prizes, scaled depending on the popularity of their performances.
TXI plans to achieve its brand status through viral marketing and by using its in-house-developed
technologies and original methods of presentation and delivery. With unique streamed HD viewing
quality and a sophisticated level of simultaneous community interactivity, Xisle will provide something
for everyone that enjoys Reality TV/Adult Entertainment, whatever their preferred level of explicitness.
Through TXI‟s ability to provide a bespoke service to its customers and by presenting a reality TV style
multi-selection format, we will be able to offer superior service and exceptional value for money. TXI
intends to rapidly become a leading AE provider and the first globally branded AE website on the
Internet.
Xisle Website
Reality TV Format: the online Reality Show will be formatted as a contest, whereby the viewer can
select and change various levels of viewing filters. Should the viewer decide to remove all of the
viewing filters, the telecast in essence becomes a live Adult Entertainment (AE) broadcast. There will
initially be 26 male and 26 female contestants involved in an erotic popularity contest. The contest will
be bi-monthly. Half of the female contestants will be voted off the show twice a month by Internet
voting. The remaining female contestants will then vote half the male contestants off. Initially it is
intended to award $100,000 to the remaining female contestants, on a sliding scale and $50,000 to the
2
Metadata – descriptive data appended to a file. Metadata can describe many aspects regarding the content of a file – namely who is in the file,
what they are doing etc.
male contestants on a reciprocal
basis. At any time, it will be
possible to view the contestants in
the numerous venue locations:
whirlpool, beach, restaurant, gym,
etc., as well as in the private areas.
Fixed and hand-held cameras will
record as much content as possible
as it happens in „real time‟.
Free Contestant Voting Area:
this will focus both on the
contestants that are resident in the
facility and on the other aspiring
contestants that are currently
being voted for by the general
public.
Xisle Downloads: a wealth of
other video material with a wide
variety of selection options will be
available for download from the
TXI Archives.
Electronic DVD Magazine: a comprehensive selection of approximately 10 – 15 hours (Disk 1) and 12
– 17 hours (Disk 2) of high quality adult video clips. The disks will essentially be comprised of the
„best of‟ video clips, as selected from all the produced or captured material from each month‟s cycle of
Xisle‟s on-going Xisle „games‟. As well, each monthly issue of Xisle‟s all-digital magazine, will
contain in-depth interviews and erotic previews of the upcoming month‟s contestants, scheduled events
and „stratagems‟, as well as exclusive and behind-the-scenes adult film star interviews, sex advice clips
from the „pros‟ and many printable images.
Special Issue Electronic Magazines: video material from Xisle‟s ever-expanding archives will be
regularly assembled into compilations featuring various specific themes (e.g. “All Blondes”), that will
be available for purchase, either as special editions of the electronic magazine, or as a DVD that can be
delivered by mail.
Video Library: all the video material that is captured at the facility will be fully indexed, classified and
archived for easy retrieval and subsequent post production. A library of past material, contestants and
events will be available to members. This library will contain Xisle‟s favourite funny and sexy videos
and images from past activities at Xisle.
Xisle Community Area: a substantial and sophisticated interactive user community area will provide
space for members to post their own personalised profile, images, video, etc., and allow them to make
contact with other like-minded persons.
Chat Rooms: In an effort to develop an online community, members will be able to access different
chat rooms, specialising in different AE interests.
The Xisle Shop: will be open to both members and non-members, offering a range of adult products
with discounts available to members.
Xisle Magazine
The monthly magazine will be sold at newsstands
throughout Europe and N. America. The paper content
will be non-explicit, so as to be compatible with the
requirements of all retail chains. The magazine will
essentially be a TV and online competition guide and
will be in a format comparable to the better known
adult magazines, such as Playboy, but with a clear
crossover to the „Lads‟ Mag‟ style and format. Its
content will act as a TV guide by profiling the
contestants for the upcoming month and by presenting
past and future Xisle events and highlights. Shrink
wrapped, the magazine will be approximately 100
pages in size. It will contain 2 DVDs and will sell for
€9.95. There will be approximately 10-15 hours of
content on Disk 1, which will be immediately
accessible. Disk 2 will have an additional 12-17 hours
of content, but will only be capable of activation by
paying a further €9.95 online. The number of pages in
the magazine will depend on advertising.
By publishing a paper magazine, TXI reduces the level of VAT within Europe to 6%. The magazine
will help Xisle achieve high brand exposure and recognition.
TXI believes itself to be currently the only company that has received, courtesy of its format and
encryption, permission to sell X-rated products on retail shelving within Germany.
The Resort
Location: The Xisle Reality Show will be filmed at a turnkey resort (with the exception of the onlocation constructed, but easily transportable, studio facilities). The resort will house the actors and
actresses, as well as the production studio. Depending on the size of the resort, the staff may or may not
reside on-site. The preferred resort location is the South Pacific. The exact location will depend on a
cost-benefit analysis with respect to best available satellite capabilities within that geographical area.
Production Facility: the Production Facility will allow TXI to film around the clock. It will also enable
mini-cams to be operated remotely, in a „Big Brother‟ 24-hour format. This will ensure that the Content
Production Facility (CPF) can provide TXI with a large amount of content, on an Economy of Scale
basis. In other words, TXI will be able to film at a fraction of the cost incurred by other Adult
Entertainment companies. Adult Films for the most part are filmed by renting/leasing a facility short
term and paying camera crews, performers, directors and film editors as consultants. This is more
expensive than long term leases and employment agreements. For example, hiring a professional actress
at standard rates would incur a monthly cost of $30,000. Twenty-six of these actresses would therefore
cost $780,000 per month. By providing room and board, as well as a small per-diem and a prize
structure, TXI hopes to reduce this cost dramatically. By cutting the costs, TXI can offer much more
affordable rates to our subscribers – thereby increasing overall subscriptions.
Spy Cams: there will be more than 250 High
Definition remotely-controlled spy cams (with a
specification equivalent to those used in the 2010
FIFA World Cup) installed in the resort. Some of the
Reality Show scenes will be filmed by groups of
cameramen for more explicit viewing. The spy cams
will be strategically located, throughout the facility.
There will be several spy cams in selected suites,
covering bedrooms, showers, and common areas.
There will also be a number of spy cams covering
each of several areas of the facility that are
especially designated for adult interaction and
competitions. These include beach areas, swimming
pools and bars, as well as other locations where adult
interaction will often be observed. These remotely
operable cameras will be mounted, but will have a
broad range of camera motion. The outdoor spy
cams will also include special weather proofing and
all will possess long range lenses to allow for high resolution close up filming of activities.
Mobile Crews: mobile television cameras, operated by skilled professional camera crews, will be able to
capture material anywhere in the facility, with a look and quality that is more traditionally associated
with network television. The mobile crews will be deployed for scheduled shoots, which can be telecast
live or archived for future editing. Courtesy of their mobility, the mobile crews will be utilised mainly
for unscheduled events.
Master Control: all cameras on the facility will send their audio and video feed back to a Master
Control Room, which will house a complex switching and routing system and a video wall. The latter
will simultaneously show the pictures from each of the approximately 250 HD video cameras covering
the site. Cameras capturing viewer-worthy material will be constantly selected, monitored and
manipulated by a master production control room staff that will then manage the images and sound in
real-time. Finally, the resultant feeds are electronically routed to the Network Access Point (NAP) and
then disseminated to all the Points of Presence (POPs) in the TXI network. These feeds are then
available to Xisle‟s website community in real-time, as well as being sent into Xisle‟s digital storage
archives for later use.
Post Production Facilities: raw material captured by cameras and microphones, will be artistically
manipulated to create a high quality television or video product. Therefore, Xisle‟s Resort Production
Facility will require a substantial post-production infrastructure, consisting of multiple non-linear editing
suites, as well as speciality post-production facilities, designed to accommodate special effects, sound,
music and other edits such as colour or image brightness adjustments. The edited video output will be
formatted for optimised integration with TXI‟s proprietary media player, such that the resulting video
quality will be substantially better than standard industry streamed video, whose quality is degraded
through its requirement to be encoded for different media players.
Archival Storage: the quantity of video material that will be captured by spy cams, mobile camera crews
and in-studio will be enormous. Almost every minute of action video is an asset that can be leveraged at
some point to generate direct revenue or promotional value. Because of the fully digital nature of Xisle‟s
production facility, storage is much easier to manage and more cost effective than it would be in a more
traditional analogue environment. However, as there will be an ever increasing quantity of accessible
material, the system must be sophisticated and scalable. A number of cutting edge SAN (storage area
network) facilities are being assessed to identify the best way to fulfil Xisle‟s requirements in this area.
Marketing
A marketing spend will be required to present Xisle to its target market. Xisle will need to initiate its
marketing program three months before its launch in order to test and perfect the CDN prior to time it
begins to charge for it. The initial 3 month campaign (designed to start prior to the launch of the site) is
intended to accomplish four principle objectives:
1.
2.
3.
4.
A very rapid exposure of TXI‟s website to as many viewers as possible.
A face-to-face age verification of possible viewers, where required, as for example in Germany.
The expansion of the knowledge base for the avatar3.
Feedback on what TXI‟s potential clients are watching.
Marketing Actions
During the 3-month lead up to the launch of the Xisle website, special marketing actions are planned:

3
Face to Face Marketing: TXI is planning to set up marketing booths at selected train
stations and airports. These booths will display prizes to be given away to those people that
register and then activate the free demo disk that will be given away in conjunction with hats,
t-shirts etc. The main prizes are expected to be automobiles and motorcycles. The hostessmanaged booths will have up to six portable computers, to allow individuals to register. To
allow for follow-up marketing actions, the required registration information includes proofof-age verification, mobile phone numbers and e-mail addresses. In return for registering, the
individual will receive an Xisle demo disk and Xisle branded items, such as a baseball cap,
coffee cup, t-shirt, bathing suit, beach bag, etc. All items will have Xisle logos and the logo
of a participating sponsor. The intention is for the sponsor to pay for the production of the
item to be given away, whilst TXI covers the cost of the giveaway itself.
An avatar is a computer user's representation of himself/herself or alter ego, whether in the form of a three-dimensional model used in
computer games or a two-dimensional icon (picture) as used on Internet forums and other communities. In Xisle’s case it will be a very pretty
lady.
Internal Market studies and forecasts indicate that TXI can distribute approximately 4 million
DVDs in 3 months. Each DVD will contain software that will have Adult Reality Contestbased material, and will allow the user to:
 Set viewing levels, much like Internet Filters. If the user sets the viewing security at the
highest level, no material containing any nudity will be viewable. At the lowest viewing
security level, everything will be viewable. When the product is first installed, all filter
levels will be set to their highest levels. Therefore, the only way to view explicit
material is for the user to remove all the filters themselves. This choice will be reported
back to TXI, thereby indicating the most suitable programming to present, when the
Xisle website first goes live.
 Watch preliminary pre-launch events on Xisle.
 Watch Adult Reality Contest based material.
 Watch PG (Parental Guidance) related material.
 Observe and vote for the potential contestants.
 Provide an acceptance system for applicants to submit their personal statistics, videos,
desires and other fantasies, so they can become potential candidates for competing in the
Xisle contest.
 Watch what is happening on the island via small non expandable screens. TXI does not
wish to give away the opportunity for free full-screen viewing until it is included with a
client‟s membership fee 3 months later.
 Experience the High Definition
nature of our network and what a
1 - 3+ Mb stream performance
looks like, possibly through
broadcasting motorsport streams.
 Explore the online store. This
should generate a significant
amount of pre-orders for
subscriptions, as clients will be
entitled to discounts on most of
the range of Adult Products
within the store, which will be
active prior to launch.
 Watch our viral marketing ads.
(To view examples of how Adult
humour can relate to these types
of adverts, visit the website: www.trojangames.co.uk.) If TXI‟s viral ads are good
enough, people will circulate them to their friends, virally propagating awareness of
Xisle, its nature and impending launch. TXI is forecasting that by distributing 4 million
disks and by using other Word of Mouth Marketing techniques, TXI should actually
attract 4-10 million people to the pre-launch Xisle website, although the foregoing is not
included in our proforma financial statements.
 Navigate the website with the avatar. Every command that the avatar does not understand
will be sent to Xisle‟s hosting site, so that TXI can modify the information database
associated with the help files (avatar). Through its pre-launch, TXI hopes to establish all
of the required help necessary to eliminate a helpdesk.
 Allow TXI to determine the types of content that people are looking for on the island,
once production begins in real-time.

Internet Marketing: a full suite
of online marketing methods will
be used, to generate a viral
marketing campaign, such that
recipients of an email, a video or
some form of Word Of Mouth
(“WOM”) activity will be
incentivised to tell their friends
of the impending launch of Xisle.

Conventional Marketing:
In addition to computerised
activities, other conventional
promotional activities such as
racing sponsorship will be
undertaken in all the initially targeted counties prior to the launch of the website.
This initial marketing campaign will also allow TXI to fully test and debug its software and network
configuration (before users are actually paying for its utilisation).
The Advertising Opportunity
The in-show advertising capabilities of the Xisle Reality show should attract major brand names.
Companies are in constant search for new media in which to advertise their products and the Xisle
Reality Show will prove to be a major opportunity to a multitude of viewers around the globe, on a daily
basis. The magazine, which is essentially a distribution vehicle, will provide further opportunities for
advertisers to approach the same worldwide markets that TXI intends to access.
The TXI Strategy
While the completed network will provide a significant asset base for TXI, it is the adult content and the
uniqueness of the Xisle product that will generate the revenue streams, promote the network branding
and provide the substantial client acquisition.
While current funding is being achieved, initiatives will be undertaken, so as to implement the project as
quickly as possible. These include the segregation and completion of various software components
independently; the utilisation of pre-existing databases (such as those of the supplier to the Xisle online
shop); and outsourcing of major project requirements such as marketing and PR to competent and proven
firms.
Corporate Structure
TXI is actually a conglomerate of different Companies, all of which have separate goals.
TXI International N.V.
100%
TXI Communications N.V.
100%
TXI Finance B.V.
100%
TXI Technologies N.V.
(To be incorporated)
TXI International N.V. - TXI International N.V. was incorporated for reasons of separate
accountability and legal security, in relation to any of the actions of any of the subsidiaries. It was also
incorporated in order to segregate TXI Communications N.V. (the Adult Entertainment provisioning
Company) from the other mainstream activities the group will be pursuing. Regarding its technical
endeavours, in the event TXI wishes to license any of its technical capabilities to third parties outside of
the group, the Adult Activities of TXI Communications will not influence the technologies group. TXI
International operates under a 2% Income tax regulation/requirement within Curacao. When it was
decided that a holding Company was required, all the earlier TXI Communications shareholders
executed a share swap, basically exchanging their common stock in TXI Communications N.V. on a
share-for-share basis, with TXI International. This occurred formally on July 27, 2007.
TXI Communications N.V. - This was the first of the Group to be set up, in September 2000. The TXI
Communications concept has not fundamentally changed, in that it still centres on the utilisation of
economies of scale and the production and sale of high quality Adult Content, at a discount, in order to
acquire a substantial Internet based client/subscriber list. TXI Communications‟ fundamental use to the
overall group has been expanded to not only generate substantial revenue over a short period of time,
but also to be utilised as the tool that tests and proves TXI‟s live network technology.
TXI Finance B.V. - This Company is essentially a marketing Company. It is responsible for all
operational activities, commencing with the sale and marketing of TXI International‟s common stock,
through to the setup and co-ordination of trade shows and the solicitation of distribution contracts.
TXI Technologies N.V. (to be incorporated) - This Company will be the entity responsible for the
production of the live content distribution network.
It should be noted that all of the organisations owned by TXI International may dividend all or any
part of their income to the parent Company without suffering any tax consequences whatsoever.