4. General Environment
• Royalty Fees
• Internet Radio - $0.0291
• Satellite Radio - $0.016
• Terrestrial - $0.000
Political
• Domestic economy
improving
• Record low interest rates
• Marketing and advertising
budgets increasing
Economical
• Increased focus on
physical health
• Demographic shifts
Societal
• Increased internet
access
• Increased network
capabilities
• Multiple platforms for
streaming
Technology
5. Specific Environment
Threat of New Entrants
• Relatively low costs associated with entry
• Internet is the next frontier
• Ability to develop a niche
LOW
“Barriers to entry in the
industry may be low,
but barriers to success
are extremely high…”
IBISWorld
6. Specific Environment
Power of Buyers
Advertisers
• Advertising agencies expecting
slow & steady growth
• Numerous advertising
possibilities
End Users
• Multiple options offering similar
platforms
• Subscription based vs. free
• Increased demand & content
due to faster connectivity
HIGH
7. Specific Environment
Power of Suppliers
• Royalty fees are concerning
• Unequal treatment across broadcast mediums
• Internet Radio Fairness Act Implications
HIGH
8. Specific Environment
Threat of Substitutes
• Younger generations are tech savvy
• Terrestrial radio dominates
• Alternative media sources
HIGH
9. Specific Environment
Intensity of Competitive Rivalry
• Industry growing vigorously
• Surge in mobile phone/tablet popularity
• Robust algorithms are the most successful
MEDIUM - HIGH
10. Competition
• Dual purpose revenue
model
• Advertisement free
• Low market penetration
• Potential spinoff?
• Largest musical library?
• Rapid user growth
• Diverse listening
options
• Outgrowing revenue
model
• Subscription based only
• Unique programming
• Difficulties retaining
users
12. From Savage Beast Technologies
to the largest internet radio service
13. Company Overview
• Disruptive business model
• Core Competency: Music Genome Project
• Competitive Advantage: New Advertising / Media Planning Platform
• Ease-of-use for customers
• Precise, targeted messaging
• Marketing & Sales
• Grassroots, word of mouth user growth
• Focus on Blue Chip advertisers
• Direct sales strategy for local advertisers
14. Internal Environment
• Music Genome Project
• First Mover Advantage
• Customer Loyalty
• Brand Recognition
• Mobile app popularity
• Vision
• Passionate Leadership &
Employees
• Dissemination of
Information
• Contentious Supplier
Relationship
• Unproven Sales Strategy
• Lack of Profitability
• Financial Strategy
• Cash Position
25. Recommendations
• Short Term (6 – 24 months)
• Establish a corporate partnership with a fitness equipment manufacturer
• Aggressively pursue a national sales force
• Identify an executive with experience monetizing unproven business models
• Lobby for royalty equity
• Intermediate (2 – 5 years)
• Additional expansion of sales force
• Identify strategic partner
• License the Music Genome Project globally
• Increase 1:1 marketing capabilities
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
01/31/2009 01/31/2010 01/31/2011 01/31/2012 01/31/2013
ThousandsofDollars Total Expenses Vs. Total Revenue
Total Expenses
Total Revenue
Adjusted CostAdjusted
Expenses
26. Recommendations
• Long Term (5+ years)
• If consistently profitable:
• Replicate the business model globally
• If unable to establish profitability:
• Find an acquisition partner
