Gigmasters.com, an online booking system, connects consumers with live entertainment for various events. The company maintains a database of over 15,000 musicians and has expanded to include other entertainment services such as comedians, dancers, caterers, and photographers.
Gigmasters allows buyers and sellers of entertainment services to transact through its platform and collects a 10% commission fee from sellers. Additionally, the company earns revenue from corporate sponsorships of its newsletter. Unlike its competitors, Gigmasters offers online press kits and an online bidding system, providing customers with a unique and comprehensive experience.
The U.S. music and entertainment market is valued at close to $9 billion, with weddings being the largest component. Gigmasters caters to various segments, including corporate events, nightclubs, festivals, Bar Mitzvahs, and fraternity and sorority functions. Traditional booking agents, who mostly target high-end bookings, have limited online booking capabilities. Gigmasters plans to form strategic partnerships with wedding and event planning websites to increase traffic and revenue.
To support its growth, Gigmasters is raising $100,000 in funding, with a minimum target of $70,000. The company expects to achieve profitability by 2003, assuming conservative estimates of bookings growth and proper funding.
Overall, Gigmasters aims to revolutionize the way consumers find and hire entertainment services, offering a user-friendly platform and comprehensive services across various event types.
Contents
Company Summary
Gigmasters, owned by Kevin H. Kinyon and Michael J. Caldwell, also oversees the day-to-day operations of the Gigmasters.com website. Gigmasters.com is an online business.
2.1 Company History
Last year’s financial figures are shown below.
Past Performance:
Sales: $0, $0, $17,066
Gross Margin: $0, $0, $17,066
Gross Margin %: 0.00%, 0.00%, 100.00%
Operating Expenses: $0, $0, $19,435
Collection Period (days): 0, 0, 0
Balance Sheet:
Current Assets:
Cash: $0, $0, $15,793
Accounts Receivable: $0, $0, $1,125
Other Current Assets: $0, $0, $0
Total Current Assets: $0, $0, $16,918
Long-term Assets:
Long-term Assets: $0, $0, $1,510
Accumulated Depreciation: $0, $0, $0
Total Long-term Assets: $0, $0, $1,510
Total Assets: $0, $0, $18,428
Current Liabilities:
Accounts Payable: $0, $0, $0
Current Borrowing: $0, $0, $0
Other Current Liabilities (interest free): $0, $0, $0
Total Current Liabilities: $0, $0, $0
Long-term Liabilities: $0, $0, $4,200
Total Liabilities: $0, $0, $4,200
Paid-in Capital: $0, $0, $15,657
Retained Earnings: $0, $0, ($1,429)
Earnings: $0, $0, $0
Total Capital: $0, $0, $14,228
Total Capital and Liabilities: $0, $0, $18,428
Other Inputs:
Payment Days: 0, 0, 30
Sales on Credit: $0, $0, $0
Receivables Turnover: 0.00, 0.00, 0.00
Services:
Gigmasters is the medium between live entertainment and those who hire them. We provide booking services to help customers find quality entertainment for any event.
3.1 Service Description:
How the system works:
– A customer visits the Gigmasters website and enters their ZIP code, event type, and entertainment preference.
3.2 Gig Requests:
Whenever a customer completes a request for entertainers, they have created a gig request. This is logged to the Gigmasters database and immediately forwarded to selected entertainers. The average percentage of customers who fill out a gig request is currently 3.5%. Management aims to increase this to 5.0% through improved website design and layout. Focus groups will also be conducted to study customer behavior and find ways to encourage more gig requests.
Once the gig request is submitted and verified, an email is sent to each entertainer. The email contains details about the gig without revealing the customer’s identity. Entertainers can then submit a bid indicating their rate. The customer receives various bids through email and can make an informed decision.
Live bands generate the largest component of gig requests on Gigmasters. The company has established a market niche in this area with notable publicity.
The percentage of gig requests resulting in bookings is currently 5%. Management aims to increase this to 7-8% through improvements to the booking system and better follow-up on gig requests.
Follow-up on gig requests is done via automated emails, and telephone inquiry will also be implemented. Broadband availability is expected to increase and improve video streaming quality, enabling more customers to make hiring decisions online.
3.3 Press Kits:
Gigmasters provides entertainers with online press kits containing biography, photos, audio and video samples, client testimonials, song lists, rates, instrumentation, and musical genre. Press kits act as websites for entertainers without an existing one, serving as promotional material and contributing to free branding of the Gigmasters name.
Entertainers can update their press kits themselves, keeping the information accurate and current. They also gain access to a control panel showing statistics on their account and allowing them to update billing information and other details.
3.4 Technology:
Gigmasters allows customers to view audio and video samples of entertainers online. Video streaming is expected to grow with increasing broadband availability, improving the user experience and encouraging online hiring decisions.
3.5 Future Services:
Gigmasters recognizes the potential to apply its online booking system to other service sectors besides entertainment. It is currently beta testing categories like Home & Garden, Wellness, Instructors, and Legal and Financial.
Market Analysis Summary:
$9 billion is spent annually in the United States on live music and entertainment services, with weddings being the largest component.
Gigmasters targets professional musicians, entertainers, caterers, and photographers. The company aggressively targets amateur musicians and aims to expand into other service areas.
4.1 Market Segmentation:
Gigmasters targets various segments of the entertainment market, including weddings, corporate events, nightclubs, bar/bat mitzvahs, festivals, vacation entertainment, school events, and country clubs.
Market Analysis
Potential Customers:
– Weddings: 2.3 million weddings in the US annually, with $39.1 billion spent on the industry. $3.2 billion is spent on music, $16.0 billion on catering, and $2.9 billion on photography.
– Bar/Bat Mitzvahs: Approximately 73,000 events annually, with an average spending of $20,000. $73 million is spent on music, $110 million on photography, and $549 million on catering.
– Nightclubs: There are around 52,900 establishments in the US. The live music budget is estimated at $1.1 billion.
– Other: Includes various events. The industry is estimated at $750,000 and has an annual growth rate of 5%.
Total: The overall market growth rate is projected at 4.35%, with a revenue of $3,766,163.
4.2 Target Market Segment Strategy
Weddings: Gigmasters’s largest target market with the most business. 2.3 million weddings in the US. $39.1 billion industry with $3.2 billion (8%) spent annually on music, $16.0 billion (41%) spent on catering, and $2.9 billion (7.4%) spent on photography. Corporate Events: An $82 billion industry, with 4.5% or $3.76 billion spent on entertainment. Gigmasters aims to become the definitive music and entertainment source for corporate event planners and industry professionals. Bars/Nightclubs/Restaurants: This segment includes around 52,900 establishments in the US. It is a $1.1 billion industry. There are also approximately 100,000 restaurants in the US, many featuring live music. This sector should register annual growth of 3.6%. Bar and Bat Mitzvahs: Approximately 73,300 events in the US each year, with an average spending of $20,000. It is a $1.5 billion industry, with 5% ($73 million) spent on music, 7.5% ($110 million) on photography, and 37.5% ($549 million) on catering.
Strategy and Implementation Summary
Gigmasters collects a 10% commission for each transaction it brokers. The company projects 20% monthly booking growth in 2001, with average monthly bookings totaling $14,000 by October. Gigmasters’ revenue model is similar to that of eBay.com and HotelReservationNetwork.com, earning money on each transaction.
The main focus is driving traffic to the site, with an average of 200 visitors per day. Gigmasters relies on search engine positioning, links from musician websites, banner ads, and co-branding to increase traffic and revenue.
Search Engine Positioning:
– Gigmasters has achieved favorable positioning for keywords related to its services through optimization and submission tools.
Links:
– Gigmasters has been listed on various musician websites as a recommended link.
– The company actively pursues opportunities to register its link on other websites, which currently generate 29% of the site’s traffic.
– Musicians and entertainers also provide links to Gigmasters on their main websites, promoting the company for free.
Banner Ads:
– Banner ads currently supply 5% of Gigmasters’ traffic.
– The company achieves a 1% click-through rate on its banner ads.
Co-Branding:
– Gigmasters seeks to form strategic partnerships with high-traffic sites related to weddings, parties, and events.
– By co-branding, Gigmasters will benefit from increased traffic and revenue, while partner sites provide the initial traffic.
Competitive Edge
Gigmasters offers significant advantages compared to its competitors. It provides online press kits for customers to preview entertainers and an online bidding system for competitive bids. Traditional booking agents and music sites like MP3.com are not direct competitors.
Sales Strategy
The sales strategy focuses on helping customers find the right entertainer, gaining their trust, and ensuring entertainers respond to gig requests. Gigmasters limits customers to choosing three entertainers per event to increase the chances of booking success.
The volume of bookings is influenced by the number of daily visitors, the percentage of visitors filling out gig requests, and the percentage of gig requests resulting in bookings. Gigmasters collects a 10% commission from entertainers, and online billing options are available to streamline payments. Currently, the company has collected on 93% of bookings.
In conclusion, Gigmasters has a clear target market strategy, revenue model, and marketing plan to drive traffic and generate bookings in the entertainment industry.
|
Sales Forecast |
|||
| 2001 | 2002 | 2003 | |
| Sales | |||
| Booking Commissions | $83,017 | $458,227 | $1,604,858 |
| Other | $6,000 | $12,000 | $18,000 |
| Total Sales | $89,017 | $470,227 | $1,622,858 |
| Direct Cost of Sales | 2001 | 2002 | 2003 |
| Booking Commissions | $0 | $0 | $0 |
| Other | $0 | $0 | $0 |
| Subtotal Direct Cost of Sales | $0 | $0 | $0 |
Incentives for Disclosure
Gigmasters offers an incentive program to encourage accurate disclosure of payment amounts. Entertainers who book more through Gigmasters are listed higher in search results. This rewards them for using the service and gives them priority. The response from entertainers has been positive, and those who have seen results from Gigmasters are willing to disclose their payment amounts to secure future bookings.
With over 15,000 entertainer press kits, it is beneficial for entertainers to maintain a high position in their listed categories. This incentivizes them to disclose their earnings from Gigmasters.
Corporate Sponsorships
Gigmasters generates revenue from sponsorships of its bi-monthly newsletter, which reaches approximately 8,000 entertainers. This provides effective advertising for music & entertainment companies. Past sponsors include Amazon.com, Emusic.com, RollingStone.com, and Bluelight.com, paying up to $1,000 per mailing. The company has recently added an additional monthly mailing to reach brides/grooms, event planners, and club owners. Potential advertisers for this newsletter include party-planning companies like Evite.com and iParty.com, as well as wedding sites such as TheKnot.com and ModernBride.com.
Additional Revenue Streams
In addition to booking commissions and corporate sponsorships, Gigmasters offers fee-based services to entertainers. This includes digitizing music, scanning press photos, and selling musician CDs on consignment. These secondary revenue streams will grow in importance as the company expands.
Management Summary
Gigmasters is an owner-managed company led by co-founders Kevin H. Kinyon and Michael J. Caldwell. John Sortino recently joined the Board of Directors to provide business and financing advice. Sortino, founder of Vermont Teddy Bear, will receive stock options as compensation.
Management Team
Michael J. Caldwell has extensive experience in the New Media industry, specializing in database design and web development. He has worked with notable websites such as SmartMoney.com, Refer-it.com, TheSquare.com, George magazine, and Premiere magazine. Caldwell has a background in International Equity and holds a bachelor’s degree in Economics.
Kevin H. Kinyon launched Gigmasters in 1997 and previously worked as a financial management consultant. He has a double major in Literature and Communications from Pace University and has been recognized for his work in the internet industry.
John Sortino founded the Vermont Teddy Bear Company and served as its President and CEO through its IPO. Sortino has received numerous accolades for his business achievements and has been featured in various media outlets. He has also been involved in other ventures, including the Chicago Bicycle Company and American Performance Products.
Personnel Plan
Projected payroll expenses are outlined in the table below.
|
Personnel Plan |
|||
| 2001 | 2002 | 2003 | |
| Payroll | $104,796 | $224,784 | $246,780 |
| Other | $0 | $0 | $0 |
| Total People | 0 | 0 | 0 |
| Total Payroll | $104,796 | $224,784 | $246,780 |
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