Polyphonic First Movers Marketing

Polyphonic HMI Human Media Interface


AGENDA

• Key Issues/Opportunity Areas

• Industry Analysis

• Possible Alternatives

• Implementation of selected alternatives

• Contingency Plan

• Summary

• Q&A

OPPORTUNITY ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&ASWOT

KEY ISSUE/OPPORTUNITY


• Profitability

• Target Market

• Marketing Plan

• Pricing Decision

• Licensing Technology


KEY ISSUE/OPPORTUNITY



IMPORTANCE

URGENCY

LOW HIGH

LOW

Software Licensing

©HIGH

Marketing Plan Profitability

SWOT



STRENGTHS WEAKNESS

• Management expertise • Unique and innovative product • Estimated rate of success (80%)• First mover advantage • Group AIA subsidiary • Global brand presence • Access to industry expertise

• Low budget ($150,000) • Unproven technology• High operating cost• Long sales cycle (hardware providers)• No emotion (only mechanical)

OPPORTUNITY THREATS

• $32 Billion music industry• Decreasing sales growth (-10.4% in 2002)• No direct competition• High market research costs• Low success rate (10%) of traditional

methods

• Skepticism and reluctance • Traditional “instinct and guts”• Low barriers to entry for competitors• Falling music sales• Tough economic situation currently


Contingency


Implementation Plan Assessment Contingency

Plan

Unable to reach Break-Even Point (10 Album Sales)1. 80% of Marketing Budget Exhausted

or 2. 8 Months of Implementation Plan have passed


Contingency


Unproven Product

Low Reputational

Capital

Perceived Risk

Low Sales


Contingency: MONEY BACK GUARENTEE


The user fee for our software ($5000) will be returned in full to the A&R executive if:

1. HSS categorizes a song to be a hit2. The song is marketed by the label 3. The song is unable to reach the top 40 chart


Contingency: MONEY BACK GUARENTEE


1 20 39 58 77 96 1151341531721912102292480.00%

10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%

100.00%

Money-Back Guarantee Analysis: Acceptable Refund Percentage

Album Sales

Refu

nd P

erce

ntag

e at

Bre

ak-E

ven

Expected Refund Rate

A&R Success Rate


Contingency (Backup) : MONEY BACK GUARENTEE


Hits• 10 % Error

Rate• Money Back-

Guarantee

Non - Hits

• 10% Error Rate

20 % Error Rate


Decision Matrix


20 % Error Rate

Criteria Weight Artists Producers A&R

Marketing Cost 0.1 1 3 3

Timeframe 0.1 3 2 1

Profitability 0.2 1 3 3

Long-Term Value 0.15 1 1 3

Market Size 0.1 3 2 1

Market Positioning 0.2 1 2 3

Price 0.15 1 3 3

Total 1 1.4 2.3 2.6

Polyphonic First Movers Marketing

Business

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