1 May 2007
Lowe Key Entertainment – Management Proposal
Lowe Key Entertainment creates, distributes, and promotes R&B and
Soul music. Our vision is to be the leading entertainment company for
the best in R&B and Soul music. Our creative environment sets our
business apart from others by keeping a balance between business
Lowe Key Entertainment knows the importance of maintaining and
understanding our niche market (African Americans between the ages
of 18-30). Our target market is divided into two segments (faithful
fans and observing customers). To reach our target segments, we will
create and maintain a sense of culture surrounding each project
through alignment of our values with the values of our customers.
Our goal is to sell 500,000 units of each release. By cross-marketing
our products, all products will benefit from the marketing strategies
implemented for each product. This will help Lowe Key Entertainment
in maintaining a reasonable share of the market for R&B and Soul
Selling 500,000 units of all four products, Lowe Key Entertainment will
have gross revenue of $20,000,000. The range for the cost of
producing and promoting such products is $12 to 13 million for all
four. Most of the production and miscellaneous expenses are
recoupable from units sold for each product.
To reach our goals, Lowe Key Entertainment must close the gaps that
are between the company and goals. We must assemble a team of
talent, gain the leverage needed within the industry, and measure our
success to close these gaps. Closing these gaps will help Lowe Key
Entertainment become creatively and professionally successful.
Lowe Key Entertainment is an entertainment company that
provides its customers with quality, ground-breaking soul and
rhythm & blues music. We creatively and strategically develop
artists by providing creative and economical input and direction.
Lowe Key Entertainment strives to create a balance that tailors
to the artist’s and the customer’s needs. This balance is
achieved by promoting creativity among artists and providing
the finances and marketing strategies that reaps a profit without
comprising the integrity of the company and art form.
The vision of Lowe Key Entertainment is to be the leading
company amongst artists for career guidance. Lowe Key
Entertainment will grow to include different audio and visual
mediums of entertainment to become the leading entertainment
entity among its customers.
Our company recognizes the advantages a diverse staff
can bring to benefit our company. Our goal is to capitalize
on our diversity to create a unique culture that
differentiates our company from competitors and reflects
the cultural backgrounds of our customers.
Teamwork draws upon the many unique talents each
employee brings to the company. By working together,
our company is able to bring the best products and
services effectively and efficiently.
Lowe Key Entertainment strives to be the leading moral
example within the music industry. Considering the effect
a decision will have on the company and its customers is
the key to maintaining our ethical standards.
Lowe Key Entertainment is a company that balances both
the creative and business aspects of the music industry.
The company provides financial resources for the artist and
creative input. Employees are divided according to
5Respect for others
Our company wants to create an understanding between
both the business and the creative aspects of the music
industry. Lowe Key Entertainment will take all employee
ideas into consideration and expect employees to do the
same. Disciplinary action will be taken if anyone of our
employees disrespects are takes illegal action causing a
threat to other employees, customers, and/or the
1.Hire the right personnel needed to push the company forward
for economical success.
2.Have at least 5 talented artists that could be developed in a
short period of time (less than 3 years).
3.Obtain the finances necessary to release one of these artists
within a year of development.
1.Have the first artist sell more than 500,000 copies of the
associated product within a year of release.
2.Have enough profit left over from the first product release to
support another artist's release.
1.Gain and maintain more than a 10% share of R&B/Soul music
distributed within the music industry in 15 years.
2.Have five artists as cash cows selling more than 1 million
copies of their product each year within 10 years.
GAP 1: Lowe Key Entertainment does not have the talent roster
to run a record label. There are no current artists.
GAP 2: Lowe Key Entertainment lacks financial resources and
leverage within the music industry because of its
independency. Lowe Key Entertainment must increase
exposure to gain leverage within the music industry and
to maintain its independency.
GAP 3: There is also no formulated formula for success.
Our customers are largely young African Americans between the
ages of 18-30. This demographic is career focused and/or just
beginning to form a family. Therefore, it is important for our
music to reflect the values of family and work (i.e. parentally
Our Customers are divided into two segments. The first
segment is those customers that are devoted fans. They
intentionally and persistently purchase the releases of our
artists. It is important for this segment to have the product
available upon release (i.e. digital downloads).
The second segment has to be convinced to purchase the
product. To reach this segment, we must promote the album
through free on-line listening parties and alignment with other
products. Music is normally purchased at a discount from rack
jobbers like Wal-Mart and Target. Therefore, music is a
secondary purchase. It is often purchased with other, mostly
Lowe Key Entertainment strives to reach its market with the best
in musical products within the R&B/Urban genre. One way Lowe
Key Entertainment will reach this goal is by having a diverse line
up of artist that can provide our customers with at least four new
products available for purchase within the market. Developing a
new musical act at least every two years and gaining a 10%
share of R&B/Urban genre will help provide our customers with
more than four new quality products for purchase each year.
Lowe Key Entertainment is creating a niche for itself within the
music industry which gives the company room to grow. It is
important to separate our products from others by creating a
loyal fan base.
Our market is for people who share a love of R&B and soul
music. To reach this audience, it is important to use to Internet
as a new promotion medium using the right formats, keep in
touch with social trends, and to keep in touch with the markets
It is also important to keep our products accessible for our
market. Being aware of the changes within the music industry
and maintaining independence are the keys to keeping our
products accessible. Our products should also reflect quality for
a reasonable price.
The mobility of music has made a single song more marketable;
therefore, it would be lucrative to integrate the products into
other industries besides the music industry. The marketing
strategy is to associate our products with economically stable
products such as a model cell phone, a popular TV show, or with
a movie and/or video game.
The best way to reach our market is to allow our product to be
accessible on the Internet and to rely on the Internet as a
primary source for promotion and revenue. The Internet is
known for increasing exposure and has become a very important
part of everyday life. It is not only used for entertainment but
also for business and work. By recognizing the importance of
the Internet, the potential market can expand.
A roster of devoted fans should be maintained for each artist. It
is important to keep in touch with the changing behaviors and
interests amongst our roster of fans.
The success of the musical products should be monitored
through chart positions. The chart positions will be compared
with Lowe Key Entertainment’s past records and with the records
of competitors. The number of units shipped, digital downloads,
and promotion materials necessary for distribution should also
correlate with the number of units sold. All products are
expected to break-even.
Financial records should be maintained, monitored, and
compared to industry records and standards (i.e. Billboard,
RIAA, and Pollstar) for consistency and accessibility for
investors. By examining the balance sheet, owner’s equity
should be assessed also.
Plan 1: Expand financial and artistic resources.
a. Develop business plan and hire personnel to help
manage the business.
i. Write management proposal, marketing plan,
and financial plan.
ii. Talk to industry contacts about the possibility
of working for Lowe Key Entertainment.
b. Shop business plan to business investors.
i. Talk to industry contacts about investors.
ii. Attend parties and conferences for
c. Look for five sonically different artists with a local
i. Attend local shows.
ii. Go to publishers’ unsigned artists showcases.
iii. Attend college gigs.
d. Hire writers and producers that fit each artist’s style.
i. Look for up and coming writers and producers
at local colleges.
ii. Talk to publishers about prospective writers
e. Record demos.
i. Book studio time.
ii. Arrange for producers, writers, and musicians
to attend studio sessions.
Plan 2: Expand following for artists.
a. Create marketing plan for artists.
i. Take survey of demographics at local shows.
ii. Determine action plan and metrics to reach
b. Make websites for artists.
i. Determine a server.
ii. Obtain legal rights to URL’s.
iii. Hire web designer(s).
iv. Form fan clubs.
v. Hire someone to manage and update the
c. Create tour schedule for artist.
i. Contact managers and/or booking agents with
d. Obtain a publicist.
i. Get references from industry insiders.
Plan 3: Penetrate the market with products.
a. Release singles to radio and digital stores.
i. Determine a release date for each single to
ii. Have singles available for digital downloads
on the date of release to radio.
iii. Make videos for singles.
b. Work with publishers to exploit singles.
i. Suggest TV shows, products (commercials),
movies, and other entertainment mediums for
c. Create a tour centered on those artists.
i. Release groups of CDS and other musical
products strategically around the same time.
ii. Implement marketing strategy.
iii. Set up meeting with managers and/or
d. Proportionately focus on digital and brick & mortar
i. Look at industry data to determine what the
appropriate route is.
ii. Contact retailers about in-store promotion.
Lowe Key Entertainment is going to release four albums by four
different artists over a two year period. The cost per unit
released, which includes promotion and production, is expected
to be in a range of $5.94 - $6.49. Record sales are expected to
be above 500,000 in units within a year’s time for each album.
Some of the expected budget is recoupable. This includes tour
support, production costs, vocal training, cosmetics and living
expenses. The range for these recoupable funds is $250,750 –
401,250 per album released. The revenue from all four of these
CDs is expected to be at a total of approximately $20,000,000
within two years assuming wholesale is at $10.
For One Artist/Album
Radio Promotion (3 month range/single)
Independent $ 6,000
Low-end Commercial 30,000 – 100,000 (116 Howard)
Total $ 36,000 – 106,000
Music video $ 50,000 – 100,000(156 Passman)
Distribution (rack jobbers, digital downloading, special retail,
Co-op $ 1.50 per record (142 Howard)
Marketing/Promotion $ 3.50 per record (143 Howard)
per song (1* charge) $ 0.99
per album/store(1* charge)$ 0.99
per album (per year) $ 9 .98 (blackboard: tunecore)
(maintenance and storage)
Total $ 2,500,030
*$3.50 per record should also cover these costs: promo copies,
manufacturing of singles, the hiring of independent publicists
and promo people, postcards/fliers, web site design and keep
up, magazine ads, and sales personnel(s).
Possible Tour Support $ 100,000 (Brabec)
Booklet Design $ 10,000 – 15,000 (93 Brabec)
Photos (2-3 hours) $ 425 (Tarrice
Stylist $ 1,800 (NY Image Consultant)
Make up $ 485 – 855 (BDG)
Hair $ 35 – 120 (NY Image Consultant)
Total $ 12,745 – 18,200
Production costs $ 100,000 – 250,000 (88-89
Vocal training $ 750 – 1,250
Artist $50,000 (Per artist)
Entrepreneur $120,000 (Two years)
Total $ 170,000
*Artist’s living expenses are recoupable.
Operating Expenses $ 0 – 2,000
*Includes rent, utilities, office supplies, etc.
Total $ 2,969,525 – 3,247,480
Total (4 albums) $ 11,878,099 – 12,989,920