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Welcome Did You Know? Did you know that artists have their own Trade Union? This Trade Union is known as the South African Music Rights Organisation (SAMRO). This organization ensures that artists get compensated for their work. This includes royalties for radio and television airplay as well as live performances that SAMRO take part in. SAMRO Statistics As of October 2013 SAMRO has 33 630 members. This means that there 33 630 registered artists getting compensated for their music in South Africa. In 2015 SAMRO received 12 650 new members. This shows that artists are on the increase every year. Royalties • Artists receive 65% royalties from their music. • This means that artists receive majority royalties from their work. The further 35% goes to the composers and producers of the artists song. 1 2 3 AN Entertainment Panning you into the future… What is PAN Entertainment? • A Digital Music Marketing Agency that assists upcoming artists with their reach to the audience • Our business concept is to distribute music through a Subscription-Based app called “One Press Express” that distributes music to radio stations, television stations and online music platforms through a press of a button. What is our Mission? • Creating a means for providing the upcoming artist with a marketing innovation that grants instant gratification What is our Vision? • To be the leader in online services that distributes and promotes local upcoming artists What is our Purpose? • To monetise and gain maximum profit through a successful technology innovation of the artist marketing method Key Partners Radio Television Online Magazines App developer Artists SAMRO Key Activities Networking R&D App development Marketing Distribution Key Resources Artists’ material Technology Human Capital Internet Cost Structure Marketing App development Salaries Value Proposition One Press Express App Customer Relationship Customer Advertisements to Segments customers Upcoming App stores/Reviews artists Social media 16-35 E-mail communications Channels Social Media Magazines Live local events Revenue Streams R50 monthly subscription/R600 annual fee 10% from royalties TELEVISION • • • • • • • • • • • • • Channel O Vuzu Vuzu Amp KykNet Mzansi Music Mtv Gospel TV Soweto TV BET Africa SABC 1 SABC 2 SABC 3 E-tv One Press Express APP One Press Express ONLINE MUSIC SITES SOUNDCLOUD TUNECORE ITUNES DATAFILE HOST RADIO • • • • • • • • • • • • • • • • • SA-fm 5fm Good Hope Metro Fm RSG RADIO 2000 UKHOZI fm Umhlobo wenene Thobela FM Lesedi Motsweding FM Phalaphala FM Munghana Lonene Ligwalagwala Fm Lotus Tru Fm Metro Fm Bliss Sibiya Ntuthuko Zulu Core Course Links • Need • Productivity What is Leadership? • The art of leading others to intentionally create a result that would not have happened otherwise. • A process of social influence, which maximizes the efforts of others, towards the achievement of a common goal. • A leader is someone who motivates, inspires and guides others towards the desired and common outcome. • Leaders set direction, build an inspiring vision and create something new. Head of School Disciplinary Action & Information development Business Leader Operational Manager Goals & Policies Strategy & Objectives Sales & Marketing Value Capture Value Proposition Finance Revenue Management Different types of Leaders • • • • • • • Transitional leader – Leads for change Situational Leader – Leads based on Situations Transformational Leader – identifies needed change Value based Leader – Leads by value Free Reign Leader – leads by allowing followers to do as they please Autocratic Leader – Makes decisions on his/her own Democratic Leader – Lets his followers decide What type of Leader am I? Democratic Leader Laissez-Faire Maslow's Hierarchy of Needs Aldefer’s ERG Growth Relatedness Existence Herzberg’s Two-Factor Theory High Hygiene Factors Motivator Factors (lower order needs) (higher order needs) Salary Company Policies Working conditions Benefits Job Security Job Dissatisfaction 0 Career advancement Personal growth Recognition Responsibility Achievement Job Satisfaction High McGregor's X and Y theory How to make the Team Productive Incentives to boost morale • Allow music to be played while accomplishing tasks • Trust the team members to complete their tasks and facilitate them • Team building • Allow members to leave early when tasks are complete • Team members may dress how they feel Bliss Sibiya Aluve Macetyana Core Course Links • Business Modelling • Need • Economy Key Partners Radio Stations App developer Artists SAMRO AFDA Key Activities Networking R&D App development Marketing Distribution Key Resources Artists’ material Technology Human Capital Internet Cost Structure Marketing App development Salaries Value Proposition One Press Express App Customer Relationship Customer Advertisements to Segments customers SAMRO App stores/Reviews members Social media 16-35 E-mail communications Channels Social Media Magazines Live local events Seminars Revenue Streams R50 monthly subscription/R600 annual fee 10% from royalties Key Partners • Radio Stations • App Developer • Artists • SAMRO • AFDA Key Activities • Networking • R&D • App Development • Marketing • Distribution Key Resources • Artists’ Material • Technology • Human Capital • Internet Why Associate with SAMRO? The option of collaborating with SAMRO is influenced by the fact that they have more than 33 000 artists registered under them. Because a market has been established by SAMRO we can penetrate that market directly with this association. How can we benefit from the association with SAMRO? • We establish a market share through them as an association because their members are protected • We may integrate our policy with theirs. • We can get assistance with marketing our APP. How SAMRO benefits from us • SAMRO can easily give out royalty payments to artists because of our app that is being provided. Every time an artists music gets played SAMRO can easily get a notification through Artificial Intelligence. This makes pay outs quicker than before. • This makes it easier for administration on SAMROs part and less stress for the artist involved. What is Management? • • • • • • Management is the functions of creating corporate policy and utilising its resources in order to achieve the objectives of that policy. Organizing Planning Coordinating Controlling Commanding Strengths Marketing is low Costs easy to manage Human Capital Organizational culture is good Integration of avenues Weaknesses Time Financial Capital Opportunities Changing environment Availability of resources Innovation of market Local music policy passed by SABC Discovery of new talent Threats Competition Record Label Strategies Economy (Macro Environment) Policies • • • • • • • • Division Policy Time and attendance Privacy Policy Equal opportunity Employee conduct Disciplinary conduct Ethical Policy Disclaimer policy What is Blue Ocean Strategy • A new mind set that makes competition irrelevant due to unique thinking of innovation Blue Ocean Marketing Frame work • Full Independence • Quicker fan base • More decisions an artists can make • Dependence on record labels • Exploitation Raise Create Eliminate Reduce • More creativity within the industry • Increase in material 90% local 10% international airplay • Maximum control over artists material • Administration for the artists • Control on record labels What is Operational Management • Operational Management are processes used to design, supply, produce and deliver valuable goods and services to customers • Also known as process management that manages all the processes used to get the product to the consumer • If a business was a car then operation management would be the engine What is a Process? • A process is a series of activities, steps or tasks which are all interrelated. • Activities that transform inputs into valuable outputs. Inputs •Energy •facilities •Material •People •Information •Technology Transform Coding App Development Research Features Outputs •One Press Express The Value Process SAMRO artists submits music on the app SAMRO can pay royalties instantly “Pay per Play” For every royalty pay out 10% goes to Pan Entertainment One Button Express (app) gets notification of submission SAMRO receives notification of submission SAMRO records number of plays Radio/ TV stations play music Three Vital Elements Benefits customers expect to obtain by using the products offered by the firm Customer segment receiving priority because it is critical to the firm’s success Value proposition Operational activities that the firm can perform well Critical customer • • Indie music artists Indie record labels A website and app that markets and distribute indie music to radio stations and television networks Capabilities Songs and music video submissions to well known TV and radio stations Instant Gratification Convenience What is Project management • A project is temporary task that it has a specific beginning and end in time, and therefore defined scope and resources. • A project is a one-time activity that has a set time in which to complete and a budget. • Infrequently occurring set of activities that creates outputs within prespecified time and cost. Project Management • A Project is: • unique • not a routine operation • specific set of operations designed to accomplish a singular goal How Do Projects Succeed? • It must be completed within budget. • It must be completed on time. • The Goals/deliverables should meet the expectations of customers, project team members and other stakeholders. Gantt Chart Produced by Computergaga Project Start Date 2016/08/15 Current Date 2016/08/12 Project Duration 0% 42 days % Complete 39% 1 Task Name 1 2 3 4 5 6 7 8 9 10 10 11 12 13 Duration 40% 60% 80% 100% 39% 2016/08/15 Task ID 20% Start Date Phase 1: Idea Generation 1 days 2016/08/15 Generate ideas 14 days 2016/08/15 Research record labels 2 days 2016/08/16 Research Soundlcouds business model 2 days 16/08/2016 Research Trackwave Digtital 2 days 2016/08/20 Gather information on possible TV3 networks days 2016/08/21 Have a meeting with Independent5 Radio days stations 2016/08/25 E-mail SABC 5 days 2016/08/25 Register the company 1 days 2016/08/22 E-mail SAMRO 1 days 2016/08/23 Search for App developers 3 days 2016/08/24 Set-up Instagram Account 1 days 2016/08/20 Set-up Facebook Account 1 days 2016/08/20 Set-up Twitter Account 1 days 2016/08/21 Finish Date 16/08/2016 02/09/2016 18/08/2016 18/08/2016 23/08/2016 24/08/2016 01/09/2016 01/09/2016 23/08/2016 24/08/2016 29/08/2016 22/08/2016 22/08/2016 22/08/2016 % 100% 50% 75% 100% 100% 10% 0% 0% 0% 0% 50% 100% 100% 100% 2016/08/22 2016/08/29 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 01 02 03 04 Project Management Scope/Quality (Better) Schedule (Faster) Budget (Cheaper) Project Deliverables What must I have in order to be a good project planner? • Influencer of people. • Clear communicator. • Self-motivated. • High ethical standards. • High threshold for ambiguity and stress. • Well-connected with the customer. What is Chaos Theory? • A mathematical theory also known as the “Butterfly Effect” • It is when small change affects a greater cause. Chaos Theory Redefined CHANGE EFFECT Chaos Theory Redefined Cause Effect Not pitching to work Delay in meeting targets. No consensus between employees Focus would be on finding solutions not work. Strikes Delay in reaching deadlines. How do we instil Sustainability? • We instil sustainability through the triple-bottom line approach also known as the 3P’s (People, Planet and Profit) People • Pan Entertainment will take part in Seminars to empower people with the passion for music. • Collaborate with SAMRO to talk to upcoming musicians about the future of music. • Build a centre with a music studio in Underprivileged backgrounds. • Collaborate with different cultures and races through Theatre shows and concerts e.g. Found “The Rainbow Concert” Planet • We are not influencing negatively on the impact of global warming however we do want to contribute to the planet by contributing to environmental organizations Profit • We want to make it easier for upcoming artists to get their music out there at a frugal cost but still make a profit as a business. • We are creating economic value by investing in the art sector. • We want to invest in art festivals, concerts and tourism routes to get people outside the country to come and spend within it. • We want to create events similar to Tomorrowland for tourists to come enjoy our music as well as our culture and send money during their stay. Edwin Chetty Ntuthuko Zulu Core Course Links • Need • Economy • Business Modelling Key Partners Radio Stations App developer Artists SAMRO AFDA Key Activities Networking R&D App development Marketing Distribution Key Resources Artists’ material Technology Human Capital Internet Cost Structure Marketing App development Salaries Value Proposition One Press Express App Customer Relationship Customer Advertisements to Segments customers SAMRO App stores/Reviews members Social media 16-35 E-mail communications Channels Social Media Magazines Live local events Seminars Revenue Streams R50 monthly subscription/R600 annual fee 10% from royalties What is Marketing? “The aim of marketing is to make selling unnecessary” – Peter Drucker (1973) • • • NOT just advertising NOT just selling NOT just promotion • • • Getting inside the consumer’s mind without them knowing it Selling as much as possible to make a profit. Selling products to achieve objectives What does Marketing involve and why is it needed? • Essentially understanding your product and your consumer • Without marketing, no one would know what the product is • Appealing to the Need of the consumer i.e. Want to Need What is the Marketing Mix • According to Mind tools (2016) the marketing mix is a business tool used in marketing and by marketers. • This comprises of the 4P’s - People, Price, Place and Promotion • This comprises of the 4C’s - Consumer, Cost, Convenience and Communication The Marketing Mix One Press Express R50 monthly subscription South Africa App Stores The Marketing Mix Consumer: 16-35 Cost: R50 p/month OR R600 p/annum Convenience: marketing is easily accessible without much effort from artist Communication: Weekly e-mail updates that serve as query management as well Porter’s Five Forces Bargaining Power off Buyers Threat of Substitute Products Rival Competitors Threat of New Entrants Bargaining Power off Buyers What is a Marketing Plan/Strategy? • A comprehensive document or blueprint that outlines a company’s advertising and marketing efforts for the coming year. • Describes business activities involved in accomplishing specific marketing objectives within a set timeframe. Pan Entertainment’s Marketing Plan • Aggressive digital marketing • SAMRO Seminars & conferences • Community & College Radio stations • Live events (Open mics, talent shows etc.) • Performance schools • High schools E-mail Account Facebook Page Twitter Page Instagram Account What is Market Research and the purpose thereof? • The action or activity of gathering information about consumers’ needs and preferences • Is there a market for our value proposition? • Therefore allowing the making of wise and profitable business decisions 95% 90% 20 19 18 18 Market Research 95% 85% 19 17 14 Frequency 10 8 19 18 17 16 12 90% 85% 95% 60% 55% 45% 55% 45% 40% 12 11 11 9 9 Yes 8 No 6 4 2 0 5% 1 15% 10% 3 2 5% 15% 10% 3 2 1 1 DO YOU KNOW 2 HAVE YOU EVER 3 HAVE YOU EVER 4 DID YOU MAKE 5 DID YOU MAKE 6 HAS THOSE 7 WOULD YOU 8 ARE YOU 9 HAVE YOU EVER WHAT A DIGITAL APPROACHED MADE ATTEMPTS USE OF SOCIAL USE OF RADIO & METHODS APPROACH AN AWARE OF MADE USE OF MARKETING ONE TO MARKET MEDIA TELEVISION WORKED IN AGENCY TO SOCIAL MEDIA THEM AGENCY IS YOURSELF AS AN GETTING YOUR ASSIST YOU WITH BOOSTS ARTIST NAME OUT THERE YOUR MARKETING Questionnaire 5% 1 10 WOULD YOU PAY AN AGENCY TO ENSURE ALL EFFORTS OF MARKETING YOU Would you pay an agency to ensure all efforts of marketing you 5% 1 2 95% Proof of Concept Edwin Chetty Aluve Macetyana Core Course Links • Resources • Economy Key Partners Radio Stations App developer Artists SAMRO AFDA Key Activities Networking R&D App development Marketing Distribution Key Resources Artists’ material Technology Human Capital Internet Cost Structure Marketing App development Salaries Value Proposition One Press Express App Customer Relationship Customer Advertisements to Segments customers SAMRO App stores/Reviews members Social media 16-35 E-mail communications Channels Social Media Magazines Live local events Seminars Revenue Streams R50 monthly subscription/R600 annual fee 10% from royalties What is the purpose of Finance? • Calculate the costs of a business • Calculate the revenue streams of a business • Ensure that the revenue is greater than cost Costs of a Business • Various costs involved in the running of a business • Most important, and common being Operating Costs • Expenses related to the operation of a business on a daily business • Examples include: • • • Inventory Salaries and Benefits Advertising and marketing Thereafter classified into Direct & Indirect Costs Methods of Costing • Marginal • • Excluding fixed costs from the costing of a product Making use of the variables involved in production of product in costing • Total Absorption • Including the fixed costs/overheads into the costing of a product What is a Budget? • A quantified plan of action for a forthcoming accounting period. • An itemized summary of likely income and expenses for a given period. • A plan in monetary terms to explain what the business will do in the future. The purpose of budgeting is to provide a financial framework for the decisionmaking process. How to create a Budget? 1. What are my goals? The first step in creating a budget is to set your goals Budgeting involves tough choices 2. Where is my money coming from? This includes income sources, funding etc. 3. Where is my money going? Includes operating expenses and capital outlays (fixed and variable costs) 4. Add it all up. 5. Make adjustments if needed. Types of Budgets • Financial budget • Focuses on cash and capital expenditures. • Making sure the business has the cash it needs to fund its operations and to maintain and/or upgrade its buildings and equipment. • Operating budget • Detailed plans that estimate how much income a company expects to make and what it thinks its expenses will be in the short-term, a year. • There are usually separate operating budgets to create plans for each area of the business. Budgeting Techniques • Incremental budget Based on the current year’s results plus an extra amount for estimated growth or inflation next year • Fixed budget Budget that is designed to remain unchanged regardless of volume of output or sales achieved • Flexible budget Designed to change as volume of outputs change • Zero-based budget Budget from a zero base where every item of expenditure has then to be justified in order to be included in next year’s budgets Our Pricing • Our price is R50 monthly subscription or R600 annual fee • First year projection is based on 5 000/ 33 000 members • Second year projection is based on 10 000/ 33 000 members • Third year projection is based on 15 000/33 000 members • Our pricing is made to accommodate the struggling artist. Year One Sales Start-Up Costs App Development Company Registration Year Two Year Three R3 000 000,00 R6 000 000,00 R9 000 000,00 5000 units 10 000 units 15 000 units R250 000,00 R550,00 Non-Operating Costs Donations Total Non-Operating Costs R250 550,00 R0,00 R0,00 Operating Costs Advertising Stationery Communication Bank Charges Salaries Contingencies Total Operating Costs R9 000,00 R2 400,00 R14 400,00 R2 400,00 R120 000,00 R12 000,00 R160 200,00 R9 000,00 R2 400,00 R14 400,00 R2 400,00 R120 000,00 R12 000,00 R160 200,00 R9 000,00 R2 400,00 R14 400,00 R2 400,00 R120 000,00 R12 000,00 R160 200,00 R410 750,00 R2 589 250,00 R160 200,00 R5 839 800,00 R160 200,00 R8 839 800,00 Total Costs Net Profit/Loss Net Profit/Loss R10,000,000.00 R9,000,000.00 R8,000,000.00 R7,000,000.00 R6,000,000.00 R5,000,000.00 R8,839,800.00 R4,000,000.00 R3,000,000.00 R5,839,800.00 R2,000,000.00 R1,000,000.00 R2,589,250.00 R0.00 1 2 3 Break-Even Analysis • R410 750 / R600 • R32014 / R600 • R32014 / R600 = 685 people in the first year = 3204 people in the first year = 3204 people in the first year Methods of Funding • Angel Investors • Dragons’ Den South Africa • App Contests • Effectuation Theory vs Frugal Thinking in the loop of Resources Conclusion • No loan = No increase of cost • Immediate growth is visible in our business, increasing rapidly over time • Investments are likely to become more fruitful in the future deeming the business Sustainable in the loop of Economy Thank You for your time