Money Making Machines: Old and New

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Success and innovation in difficult times IS possible -- as is fun and learning. This presentation profiles unconventional business models and leaders succeeding in the New World.

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Money Making Machines: Old and New

  1. 1. Open Source Education Free Learning Real Results
  2. 2. Hello!
  3. 3. Kick the Pedal in the World After Midnight
  4. 4. When life hands you a lemon...
  5. 5. Some Do…
  6. 6. Some think… $$$ And
  7. 7. When this happens…
  8. 8. Many people do this…
  9. 9. Some create things like this
  10. 10. Or something like this…
  11. 11. They think like this… Events evaporate. Patterns persist.
  12. 12. There is always $ to be made
  13. 13. Change. Lots of it. All the time. What’s the constant?
  14. 14. W(H)AM!
  15. 15. <ul><li>Old World </li></ul>Time Rate of Learning Pace of Change New World Change Past Now
  16. 16. Business & Change It’s actually the same thing… Rules change, business changes
  17. 17. <ul><li>Old World </li></ul>Time Rate of Learning Pace of Change New World Same Problem: Events Evaporate, Patterns Persist Consultants Get Rich Business & Change
  18. 18. Companies keep asking: <ul><li>WHY change? </li></ul><ul><li>WHAT to change TO? </li></ul><ul><li>WHO to change? </li></ul><ul><li>HOW to make the change happen? </li></ul><ul><li>WHAT to change (soft, ie., culture)? </li></ul><ul><li>WHAT to change (hard, ie., systems)? </li></ul><ul><li>HOW to sustain the change? </li></ul>
  19. 19. All they see is….
  20. 20. <ul><li>In short, they ask: </li></ul><ul><li>Why do I need to change </li></ul><ul><li>my </li></ul><ul><li>Business? </li></ul><ul><li>Money Making Machine? </li></ul>
  21. 21. Money Making Machine ?s <ul><li>Which action brings in money the fastest? </li></ul><ul><li>Which action will have the biggest reduction in how fast money goes out to run the business? </li></ul><ul><li>Which action will release money or free up resource out of the business? </li></ul><ul><li>Which actions must I do to comply? </li></ul>
  22. 22. Let’s reduce this to…. <ul><li>Evolve, </li></ul><ul><li>Dominate, </li></ul><ul><li>Or </li></ul><ul><li>Die! </li></ul>
  23. 23. Evolve, Dominate or Die! Blockbuster Inc. is the largest chain of DVD, Blu-ray Disc, and video game rental stores in the world. The first Blockbuster store was opened in Dallas, Texas in October, 1985.
  24. 24. Do you remember….
  25. 25. And…
  26. 26. And…
  27. 27. Opportunity!
  28. 28. Netflix is an online DVD rental service. Established in 1997 it has amassed a collection of 100,000 titles and approximately 10 million subscribers. The company has more than 55 million discs and, on average, ships 1.9 million DVDs to customers each day. It topped the Top 100 Online Retail Satisfaction Index with an American Customer Satisfaction Index score of 86, well over the industry average of 75. Evolve!
  29. 29. Evolve!
  30. 30. Evolve! Dominate!
  31. 31. Die! Blockbuster Inc. is the largest chain of DVD, Blu-ray Disc, and video game rental stores in the world. The first Blockbuster store was opened in Dallas, Texas in October, 1985. On the 3rd of March 2009, Blockbuster Inc hired legal counsel to explore a possible bankruptcy filing.
  32. 32. Evolve, Dominate or Die!
  33. 33. <ul><li>500,000 units: Gold album </li></ul><ul><li>1,000,000 units: Platinum album </li></ul><ul><li>2,000,000+ units: Multi-Platinum album </li></ul><ul><li>10,000,000+ units: Diamond album </li></ul><ul><li>Average price, new: USD $15 </li></ul>http://www.classicbands.com/bestsellers.html Sales = $815,000,000 Number Artist Sales 1 The Beatles 106,530,000 2 Garth Brooks 92,000,000 3 Led Zeppelin 83,620,000 4 Elvis Presley 77,280,000 5 Eagles 65,000,000 6 Billy Joel 63,250,000 7 Barbra Streisand 62,750,000 8 Elton John 61,620,000 9 Aerosmith 54,370,000 10 Pink Floyd 52,600,000 Date of Release Title Label Billboard Peak RIAA Certified January 13, 1973 Aerosmith Columbia #21 2x Platinum March 1, 1974 Get Your Wings Columbia #74 3x Platinum April 8, 1975 Toys in the Attic Columbia #11 8x Platinum May 3, 1976 Rocks Columbia #3 4x Platinum December 1, 1977 Draw the Line Columbia #11 2x Platinum November 1, 1979 Night in the Ruts Columbia #14 Platinum August 1, 1982 Rock in a Hard Place Columbia #32 Gold October 21, 1985 Done with Mirrors Geffen #36 Gold August 18, 1987 Permanent Vacation Geffen #11 5x Platinum September 12, 1989 Pump Geffen #5 7x Platinum April 20, 1993 Get a Grip Geffen #1 7x Platinum March 18, 1997 Nine Lives Columbia #1 2x Platinum March 6, 2001 Just Push Play Columbia #2 Platinum March 30, 2004 Honkin' on Bobo Columbia #5 Gold
  34. 34. Old Wolrd Business Model
  35. 35. Aerosmith: Old World Limitations <ul><li>Old World </li></ul><ul><ul><li>Physical albums, DVDs, concerts </li></ul></ul><ul><ul><li>Retail channels </li></ul></ul><ul><ul><li>Movie soundtracks </li></ul></ul><ul><ul><li>Record clubs </li></ul></ul><ul><ul><li>Bricks and mortar, silo business with lots of overhead </li></ul></ul><ul><ul><li>Controlled marketing & promotion by record companies, radio/TV stations, retail channels </li></ul></ul><ul><ul><li>Limited venues and time for concerts </li></ul></ul><ul><ul><li>Fixed/mature/maturing customer segments </li></ul></ul>
  36. 36. Aerosmith: Old World Limitations <ul><li>Old World </li></ul><ul><ul><li>Physical albums, DVDs, concerts </li></ul></ul><ul><ul><li>Retail channels </li></ul></ul><ul><ul><li>Movie soundtracks </li></ul></ul><ul><ul><li>Record clubs </li></ul></ul><ul><ul><li>Bricks and mortar, silo business with lots of overhead </li></ul></ul><ul><ul><li>Controlled marketing & promotion by record companies, radio/TV stations, retail channels </li></ul></ul><ul><ul><li>Limited venues and time for concerts </li></ul></ul><ul><ul><li>Fixed/mature/maturing customer segments </li></ul></ul>Gold #5 Columbia Honkin' on Bobo March 30, 2004 Platinum #2 Columbia Just Push Play March 6, 2001 2x Platinum #1 Columbia Nine Lives March 18, 1997
  37. 37. ?
  38. 38. A MMM that Kicks the Pedal…
  39. 39. Do you remember?
  40. 40. And…
  41. 41. A New World MMM
  42. 42. The Game
  43. 43. Single player Multi-player On-line The Game
  44. 44. The (Web-enabled) Platforms
  45. 45. <ul><li>86 master tracks provided with game </li></ul><ul><ul><li>Wide variety of artists, from Eagles to Michael Jackson </li></ul></ul><ul><ul><li>Multiple labels represented </li></ul></ul><ul><li>Hundreds more songs available on Guitar Hero Webshop through gaming platform at $1.99, or redemption of points </li></ul><ul><li>Royalty-driven </li></ul>The Content
  46. 46. The Web Multiplier
  47. 47. Look who’s back! They evolved!
  48. 48. The MMM in action
  49. 49. The MMM + Consumer Space
  50. 50. The Winners It's a win-win-win-win for everybody: Musicians & labels make $$$ Gamers get continuously fresh content     , $$$ Video game companies sell new games using the same basic mechanics  $$$ The platform manufacturers sell more units  $$$
  51. 51. The Results <ul><li>The Guitar Hero franchise has become a cultural phenomenon, making many appearances in popular culture, becoming extremely popular as party games, and revolutionizing the modern music industry. The series has sold 23 million units, earning US$1.6 billion at retail </li></ul><ul><li>Graft, Kris (2008-01-21). &quot; Guitar Hero Breaks $1 bln &quot; . </li></ul><ul><li>Next Gen Business. http://www.edge-online.com/news/guitar-hero-breaks-1-bln </li></ul>
  52. 52. Guitar Hero released a special Aerosmith edition last year. The band has gone on record in saying that it is already the single most profitable product they have ever released . This video game has earned them more money in one year than any of their albums, even the records that have been sitting on shelves for over twenty years. http://media.www.uwmleader.com/media/storage/paper980/news/2009/01/29/Music/Guitar.Hero.The.Music.Industrys.Villain-3606224.shtml The Results $
  53. 53. The Results Merchandising, concert sales, their ability to sign a new contract (have) all been unbelievably influenced by their participation in Guitar Hero http://www.strategyinformer.com/news/2149/activision-blizzard-aerosmith-makes-more-money-from-guitar-hero-than-album-sales
  54. 54. The Results Merchandising, concert sales, their ability to sign a new contract (have) all been unbelievably influenced by their participation in Guitar Hero http://www.strategyinformer.com/news/2149/activision-blizzard-aerosmith-makes-more-money-from-guitar-hero-than-album-sales = They have a future! RISK REMOVAL
  55. 55. The MMM Explained
  56. 56. Last Words <ul><li>It’s all about managing and leveraging change. </li></ul><ul><li>It’s all about understanding how your Money Making Machine works in the New World </li></ul><ul><li>And realizing that NOT CHANGING your Money Making Machine is not an option! </li></ul>
  57. 57. Then
  58. 58. Now – Air Guitar in the New World!
  59. 59. You and your friends this weekend
  60. 60. History redux
  61. 61. We’re egalitarian, so…
  62. 62. Five Money Making Machine ?s <ul><li>Which action brings in money the fastest? </li></ul><ul><li>Which action will have the biggest reduction in how fast money goes out to run the business? </li></ul><ul><li>Which action will release money or free up resource out of the business? </li></ul><ul><li>Which actions must I do to comply? </li></ul><ul><li>Will the action be fun and will we learn anything?* </li></ul>
  63. 63. Questions? <ul><li>Thank you! </li></ul>

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