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The purpose of the venture is to provide the millions of concert teens in North America an opportunity to purchase a (post-tour overstock) concert t-shirt, at a reduced price ONLINE AT WWW.THEGRANDSTAND.COM The Grandstand’s target audience are Teens (12-17) This venture’s opportunity lies in creation of a secondary market for overstock t-shirts that have not been sold at concert venues throughout North America.
The Grandstand’s growth will come about with rising ticket prices. This business model seeks to create a segment filling a continuing music industry void. As CD sales continue to slump because of piracy, ticket sales and merchandise prices continue to rise. Most artists are now making the bulk of their revenue off ticket sales, pricing their teenage fans out of concert t-shirts. This inverse correlation will allow Thegrandstand.com the growth it needs for the future. Thegrandstand.com will provide competitive t-shirt pricing far below stadium, arena, or artist merchandise website on a secondary market.
YOUNG, HIPAND EDGY
A SENSE OF BELONGINGAS A TEEN AGED FAN
SHOW YOUR TRUE COLORS AND IDENTITY
A PLATFORM FORSELF EXPRESSION
AFFORDABILITY
THEGRANDSTAND.COM
STRENGTHSTRENGTH WEAKNESSWEAKNESS OPPORTUNITYOPPORTUNITY THREATSTHREATS
Competitive pricingCompetitive pricing Limited wholesalers Limited wholesalers and overstockand overstock
Teen market spent Teen market spent $112.5 billion in 2003* $112.5 billion in 2003*
Price wars with Price wars with competitorscompetitors
100% online, no 100% online, no overhead/inventoryoverhead/inventory
Newcomer to the online Newcomer to the online t-shirt markett-shirt market
Clothes rank 1Clothes rank 1stst with with teen purchase choice/steen purchase choice/s
Piracy/ fake t-shirts/Piracy/ fake t-shirts/
e-baye-bay
Drop-shipping Drop-shipping method=cost savings method=cost savings
Potential Profit Margins Potential Profit Margins not sustainablenot sustainable
Teens are cutting edge Teens are cutting edge and hip marketand hip market
Economics of Teens Economics of Teens
12-17 change12-17 change
Strong Teen 12-17 Strong Teen 12-17 demographicdemographic
Not enough website hitsNot enough website hits Teens= Tech savvyTeens= Tech savvy Music Business Music Business industry declineindustry decline
North American music North American music business into billionsbusiness into billions
Shoestring Shoestring budget/licensing feesbudget/licensing fees
Teen discretionary Teen discretionary income increases from income increases from 12-1712-17
Video Game spending Video Game spending instead of t-shirtsinstead of t-shirts
*http://www.magazine.org/content/files/teenprofile04.pdf
In 2006, the North American Music Business totaled $23.1 billion dollars. It is poised for a growth of an annual rate of 2.8%, taking it to a projected industry figure totaling $26.5 billion dollars in the year 2011. Slumping CD sales has paved the way to an increase in concert ticket sales. However, with artists demanding higher ticket prices in order to recoup record sale losses because of piracy, many musical acts have priced their target demographic, (Teens 12-17) out of their concert t-shirt merchandising equation. “Thegrandstand.com” is poised to attain this segment of the population by providing (overstock) concert t-shirts to concert goers on a secondary market after the tours have been completed.
http://www.marketwire.com/mw/release.
Piracy has been a major culprit in the recording industry. Record sales have declined precipitously. This has forced top tier to mid level acts to tour relentlessly. Live musical performances have sustained artists’ income. Furthermore, merchandising has become a pillar for profits. Nevertheless, with the inverse decline in CD sales, revenue has to be recouped through touring and merchandise sales. With the emergence of touring and merchandising as the new business model to sustain and recoup lagging artist revenue, merchandise (concert t-shirts) has priced its way out of the concert goers pockets.
Inside The Music BusinessBy Tony Barrow, Julian Newby P 146
***Last year soared to an average of $57 per ticket for the most popular shows. Seventy percent of people didn't go to a concert last year, and even the average concert fans only attend about two show per year.***
http://www.paciolan.com/news/092606_tm.htm
Research all trade journals (Billboard Magazine, Pollstar.com) in order to come about with the top grossing (Teen 12-17) artist tours for 2007.
Locate recent 2005-07 concert merchandise sales statistics, and narrow the market to encompass all tours skewed towards (Teens 12-17)
Explore (Teen 12-17) preferences and trends when purchasing personal clothing with discretionary income.
Extrapolate the difference between aggregate general clothing sales (Jeans, t-shirts) within the (Teen 12-17) market from clothing categorized as “concert merchandise.”
Gauge the online marketplace for aggregate “novelty clothing” expenditures made by (Teens 12-17) in recent years.
Locate surveys of (Teens 12-17) who have been polled on what they spend their “entertainment dollar” on.
Teens (12-17)
Statistics of this demographic
Beyond the growth in the Teen population, marketers cannot afford to ignore Teens for numerous other reasons. This growing powerbase of spenders and influencers are important because they:
Have significant discretionary income Spend family money as well as influence their parents’ spending on both large and and small household purchases Establish and affect fashion, lifestyle, and overall trends Like to be in control and are “hip to hype,” but not to the point of cynicism Want and expect to have control over their media experiences Have access to evolving and new technologies — such as DVRs, instant messaging and wireless phones
http://www.magazine.org/content/files/teenprofile04.pdf
Teens (12-17) Market Opportunities
Teens are a growing market. The Teen population will expand from 32.4 million in 2000 to 33.5 million in 2010. Teens have money to spend. As Teens age, their yearly discretionary income increases from nearly $1,500 at age 12 to 13 to nearly $4,500 by age 16 to 17. As a group, Teens of all ages spent a projected $112.5 billion dollars in 2003. Teens influence household spending. Parents consult the computer and market-savvy Teens in their households for large and small purchases. Teens have more choices than ever. How will advertisers get — and keep — Teens’ attention in the face of so many products vying for their attention?
Teens multitask media. Raised in the age of information and uncertainty, Teens can be skeptical.
http://www.magazine.org/content/files/teenprofile04.pdf
Teens (12-17) Market Opportunities
“Teens are a powerful force in the U.S. market — 12- to 17-year-olds spent $112.5 billion in 2003 alone. Income varies greatly within the Teen market as the population matures. Sixteen- to 17-year olds have more than four times the amount of earned income as compared to that of 12- to 13-year olds. The median spending money per week for all Teens ranges from $12.20 for 12- to 13-year-olds to $20.10 for 16- to 17-year-olds.”
http://www.magazine.org/content/files/teenprofile04.pdf
http://www.magazine.org/content/files/teenprofile04.pdf
Top 10 Items Teens Plan toBuy with Their Own Money By Percent (%)Overall Teen Rank Males Females
1. Clothes 24 482. Shoes 19 213. CDs or Recorded Music 19 184. Video Games 21 65. Jewelry 7 166. Food 10 107. Soda or Soft Drinks (TIE) 7 97. Car or Car Parts 10 68. Candy 6 69. Lunch 4 710. Magazines 6 3
Base: U.S. Ages 13-17 Source: NOPWorld 2003
http://www.magazine.org/content/files/teenprofile04.pdf
Teen Shopping (30-day period) All Teens Teen Girls Teen Boys Ages 12-13 Ages 14-15 Ages 16-17
Shopping Malls/Centers 57.7 67.4 48.6 52.3 57.7 63.4Discount Stores 44.6 52.6 37.1 42.2 42.9 48.9Convenience Stores 44.1 45.7 42.5 35.9 44.4 52.2Apparel Stores 41.6 53.7 30.1 36.3 43.1 45.6Grocery Stores 40.0 48.5 32.0 39.8 39.1 41.2Drugstores 37.1 43.8 30.9 34.0 34.9 42.7Electronics Stores 33.4 29.1 37.5 28.8 33.4 38.3Department Stores 32.4 41.8 23.4 29.3 31.1 36.7
Base: U.S. Teens age 12-17; Source: 2003 MRI Teenmark weighted by population
http://www.magazine.org/content/files/teenprofile04.pdf
Overall, Teen population density mirrors that of the general population. Some trends since 1998 about the Teen population include: Twice as many Teens live in the South than in the Northeast (9 million vs. 4 million). While there has been growth in the South of all Teens and adults (up 8%), the region’s Teen population has experienced particular growth (up 10%).
The percentage of Teens that reside in the Northeast, on the other hand, is relatively smaller than the percentage of the population at large — the only region in the country where this is true. In fact, the number of Teens living in the Northeast has declined (down 2%). The percent of Teens that reside in the South, Midwest, and West is comparable to the percent of the population at large that do.
http://www.magazine.org/content/files/teenprofile04.pdf
WEST22.6% of Teens22.0% of Population 12+ MIDWEST23.5% of Teens22.9% of Population 12+ SOUTH36.4% of Teens35.9% of Population 12+
NORTHEAST17.5% of Teens19.2% of Population 12+
*The median allowances for teens who live in households with annual incomes in the $30,000-to-$40,000 range is $21 a week, whereas for teens in households with $100,000-plus annual incomes, it's $175 a week.
*The South claims the lowest median household income of any region in the United States, as well as the largest number of people with household incomes of $5,000 or less -7 million. By comparison, there are only about 3 million households in the Northeast with incomes that low. "There are pockets of the South that tend to be rich, especially around the Atlanta area. But then there is Mississippi and the Delta. Places like Arkansas and Alabama pull [median incomes] down, too."
Although the south has the highest number of teens (36.4%) within its population, it proves to have the lowest discretionary income among this demographic.
*http://findarticles.com/p/articles/mi_m4021/is_1999_Dec/ai_58544316/pg_1
*The high median allowances in the East North Central region, on the other hand, can be attributed to the fact that there are a large number of sizable Midwestern cities that don't have huge pockets of poverty, places like Cleveland and Cincinnati, that are much more homogeneous than, say, Los Angeles or New York.
*http://findarticles.com/p/articles/mi_m4021/is_1999_Dec/ai_58544316/pg_1
When it comes to ethnicity and race, Teens are the most diverse market segment. They are not, however, overly concerned with ethnic designators. According to market research firm Cheskin, they are “intra-cultural”— they do not identify themselves as solely African American/Black, Hispanic/Latino, Asian American, or Caucasian.
Teens blur the lines between ethnic and racial identities. One out of every three Teens age 12 to 19 belongs to a minority racial or ethnic group, according to Interep Research, as compared to one out of five in the Pre-Boomer generation. Some 15% of the 12-to 19-year-old population are African American/Black, 15% are Hispanic/Latino, and 4% are Asian American. The remaining two-thirds are Caucasian.
Source: U.S. Census Bureau: population projections 2002. Teens 12–19. Baby Boomers: 39–57.Pre-Boomers 58+; Demographics; Youth
http://www.magazine.org/content/files/teenprofile04.pdf
Today, the Hispanic/Latino Teen market is 4.6 million strong. By 2020, it will balloon to a size 62% larger than today — growing six times faster than the rest of the Teen market.Asian-American Teens ages 10 to 14 are expected to experience the highest percentage ofgrowth in this decade — 31% — from 903,000 in 2001 to 1,188,000 in 2010.
Thegrandstand.com offers concert t-shirt merchandise of musical icons from the and the present to young and hip teenaged fans.
Images/ www.backstage-fashion.com
A fully integrated/secure e-commerce website offering the widest selection of concert t-shirts from legendary artist’s from the past and present.
The utilization of drop-shipping will be implemented, where all orders processed on the website will be forwarded from to the wholesalers, and then shipped to the customers directly.
No inventory or storage needed, see attached model.
POS(POINT OF SALE)
WHOLESALER-DROP-SHIPPER
CUSTOMER
THEGRANDSTAND.COM
Calculation of a few commonly used profitability indicators: Gross Margin:GM % = (Selling Price - Cost) x 100 / Selling Price
Example: You sold an item for $49.95, and the cost of the item is $30.00. GM % = (49.95 - 30.00) x 100 / 49.95 = 39.94%
Mark Up:Mark Up % = (Selling Price - Cost) x 100 / Cost
Using the above example, Mark Up % = (49.95 - 30.00) x 100 / 30.00 = 66.5%
Thegrandstand.com will compete against stadium, arena and artist merchandise websites through aggressive pricing scheme. This will come about through the creation of a “secondary” overstock market in order to be competitive within the market. This will be achieved by:
Attaining merchandise from “licensed wholesalers” who possess post tour unsold t-shirt merchandise
Providing a fully integrated e-commerce website with the widest selection of concert t-shirts that have not been sold by artists on their concert tours
Create value for the Teen 12-17 market; allow this demographic to purchase their favorite artist’s t-shirt at a reasonable cost
Girlie Tee
$59.95
Madonna
http://madonna.fanfire.com
Rolling Stones Men’s Tee
$38.00
www.rollingstones.com/store
ColdPlay
Men’s Tee
http://coldplay.fanfire.com
$29.95
Rush
Men’s Tee
$24.95 http://www.oldglory.com
***Teens’ “yearly” discretionary income increases from nearly $1,500 at age 12 to 13 to nearly $4,500 by age 16 to 17.***
Ages 12-13- $28.84 Dollars per week 75% of the merchandise listed above is unaffordable
Ages 16-17- $86.53 Dollars per week Greater discretionary purchasing power after a 3 year gap in age.
**http://www.magazine.org/content/files/teenprofile04.pdf**
Online Competitors
Star500.comWolfgangsvault.com**Concertee.com**Band-tees.comRerock4ever.comSwag.comConcertshoppe.comGoodrock.comOldglory.com
**Concertee Denotes wholesale option**
**6541 Currently using “concert t-shirt” terms on Yahoo**
**17028 e-bay stores using “concert t-shirt”**
**500 products listed on e-bay using “concert t-shirt”**
**Current 3,000,000 pages found on Google using the terms “concert t-shirt”**
www.worldwidebrands.com
Onesource-10/11/07
Thegrandstand.com will partner up with the web design and marketing firm of www.123triad.com in order to maximize online exposure and web traffic with the following tactics at the cost of $240 (Yearly), COST OF THE WEBSITE TO BE BUILT TOTALS: $1580
Guaranteed Website Indexing in Major Search Engine Keyword/Key phrases Suggestion
Meta Tag GenerationWebsite Optimization for Selected Keywords
Content UploadingXML Google Site Map XML Yahoo Site Map
HTML Site Map For Major Search EnginesComprehensive Website Analysis
Monthly Systematic Hand Submissions to Major Search EnginesLink Analysis
Reciprocal Linking to Increase Link PopularityCompetition Analysis
**Pay per Click Management**
*** Google Ad words will be the choice of online CPC (Cost Per Click) program***
Sponsor local grade school/high school dances- Provide thegrandstand.com signage, giveaways refreshments and prizes for dance contests.
Advertise in local school newspapers/yearbooks.
Sponsor “battle of the bands” contests at local school gyms.
“Teen Magazine” ads promoting thegrandstand.com.
Text messages announcing any thegrandstand.com sales or discounts or concert ticket giveaways. (Sponsorships with cell phone carriers too costly)
Interns (non-paid) to distribute thegrandstand.com cards promoting the website at school and concert venues (where applicable)
Sponsor local school sporting events- Friday night football games, baseball, basketball.
E-mail sign-up option (website) to receive upcoming tour dates and ticket sales
Create a myspace.com section to promote thegrandstand.com.
Have a featured thegrandstand.com artist perform at a school based on a contest/sweepstakes.
BIG SALES FOR TWEEN TOURS
How recent tours appealing to tweens fared*:
The Cheetah Girls: 2006-07-Number of shows: 84 -Percentage of seats filled: 98%-Total ticket sales: $25.3 million
High School Musical: Concert: 2006-07-Number of shows: 41-Percentage of seats filled: 92%-Total ticket sales: $24.6 million
Hilary Duff: 2005-Number of shows: 34-Percentage of seats filled: 79%-Total ticket sales: $11.8 million
Aly & AJ: 2007**-Number of shows: 14 -Percentage of seats filled: 56%-Total ticket sales: $1.7 million
* = U.S. shows only ** = Tour in progress
Source: USA TODAY analysis of Billboard Boxscore data
* Tour figures not available*
Cheetah Girls High School Musical Hillary Duff
Aly & AJ Miley Cyrus* http://www.usatoday.com/life/music/news/2007-08-30-miley-tour_N.htm
Miley Cyrus As Hannah Montana Tour and Concert Dates
Tuesday, October 23 Omaha, NE Qwest Center Omaha
Thursday, October 25 Denver, CO Pepsi Center
Friday, October 26 Salt Lake City, UT Energy Solutions Arena
Saturday, October 27 Salt Lake City, UT Energy Solutions Arena
Monday, October 29 Seattle, WA Key Arena
Tuesday, October 30 Portland, OR Rose Garden Arena
Thursday, November 1 Oakland, CA The Oracle
Saturday, November 3 Anaheim, CA Honda Center
Sunday, November 4 San Jose, CA HP Pavilion at San Jose
Monday, November 5 Fresno, CA Save Mart Center
Wednesday, November 7 Los Angeles, CA Staples Center
Thursday, November 8 San Diego, CA San Diego Sports Arena
Friday, November 9 Glendale, AZ Jobing.com Arena
Sunday, November 11 Houston, TX Toyota Center
Monday, November 12 San Antonio, TX AT&T Center
Wednesday, November 14 Fort Worth, TX Fort Worth Convention Center Arena
Thursday, November 15 Bossier City, LA Centurytel Center
Monday, November 19 Tampa, FL St. Pete Times Forum
Tuesday, November 20 Fort Lauderdale, FL Bank Atlantic Centerhttp://www.gotickets.com/concert/miley_cyrus_as_hannah_montana.php
Miley Cyrus
Miley Cyrus As Hannah Montana Tour and Concert Dates continued
http://www.gotickets.com/concert/miley_cyrus_as_hannah_montana.php
Friday, November 23 Nashville, TN Sommet Center
Saturday, November 24 Knoxville, TN Thompson/Boling
Wednesday, November 28 Duluth, GA Gwinnett Center
Thursday, November 29 Memphis, TN FedEx Forum
Saturday, December 1 North Little Rock, AR Alltel Arena
Sunday, December 2 Oklahoma City, OK Ford Center-OK
Monday, December 3 Kansas City, MO Sprint Center
Wednesday, December 5 Auburn Hills, MI Palace Of Auburn Hills
Thursday, December 6 Grand Rapids, MI Van Andel Arena
Saturday, December 8 Rosemont, IL Allstate Arena
Sunday, December 9 Indianapolis, IN Conseco Fieldhouse
Tuesday, December 11 Columbus, OH Nationwide Arena
Wednesday, December 12 Lexington, KY Rupp Arena
Thursday, December 13 Cincinnati, OH U.S. Bank Arena
Saturday, December 15 Toronto, ON Air Canada Centre
Sunday, December 16 Rochester, NY Blue Cross Arena
Monday, December 17 Philadelphia, PA Wachovia Center
Wednesday, December 19 Hartford, CT Hartford Civic Center
Thursday, December 20 Providence, RI Dunkin Donuts Civic Center
Friday, December 21 Worcester, MA DCU Center
Miley Cyrus
Product Price Gross Margin % Mark up % Revenue COGS Net Income
1000- T-shirts $15.00 16% ($12.60 w/s) 16% $15,000 $12,600 $2,400
YEAR 1
YEAR 2Product Price Gross Margin % Mark Up % Revenue COGS Net Income
1300- T-shirts $17.00 25% ($13.00@ w/s) 23% $22,100 $13,000 $5,200
Product Price Gross Margin % Mark Up % Revenue COGS Net Income
1800- T-shirts $19.00 29% ($13.40@ w/s) 29% $34,200 $24,120 $10,080
YEAR 3
COGS- Cost of goods soldW/S- Wholesale pricing, provided by concerttee.com
