Wewus432 Posted April 22, 2004 Share Posted April 22, 2004 an excerpt from a Business 2.0 article about new business opportunities. Digital Artists Agency ELEVATOR PITCH: Riding the online-music wave, DAA would be an entirely new breed of talent agent for musicians. INITIAL CAPITAL: $20,000 TARGET MARKET: By 2008 the music download business will be worth an estimated $3 billion annually, according to Forrester Research. Agents take 15 to 20 percent of an artist's sales. BUSINESS MODEL: DAA researches, markets, and develops talent online. It receives commissions from online sales of music, tickets, and merchandise. DETAILS: The promise of online music is that more bands can become profitable because the marketing costs are lower. But with so many digital music stores, streaming radio channels, illegal peer-to-peer networks, and other music services coming online, how do you keep up? No one has broken a monster act onlineyet. That's where the agency comes in. Backed by its core research, DAA will help labels and artists understand the online food chain, which starts with a song getting plenty of free play and proceeds to actual music sales. Trends in who's listening to what and which sites are hot are fluid and poorly understood. AOL Music, for instance, has 18 million listeners a month; get in the rotation there and it's a short hop to actually selling your single through iTunes. DAA constantly monitors and interprets the data and develops a plan for promoting an act. Either working with the digital music stores or through its own guerrilla marketing efforts, the agency will generate online buzz for its clients by trying to get their album on, say, the iTunes homepage or the list of top hits at Musicmatch Radio. DAA makes money from the resulting music sales, ticket sales, and new areas of revenue like getting unknown acts preloadedat the factoryon MP3 players. Combined, iTunes-like services and sales of MP3 players already amount to a $670 million industry. HURDLES: The window of opportunity could close fast. Once traditional Hollywood agents who already enjoy relationships with established artistswake up, it'll be hard to compete. WHAT THE PROS SAY: Burnham: "I think the business is there. It's a service you could launch with sweat equity up front. You wouldn't even need VC money." Les Vadasz, former head, Intel Capital: "There's a good opportunity here to start this as a one-man shop." Ryan Floyd, Storm Ventures: "There are no capital costs. It is all your relationships and ability to convince individual artists to go with you. You could promote artists at a fraction of the cost. iTunes and Rhapsody would love that idea." Link to comment Share on other sites More sharing options...
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