fat beats, inc
DESCRIPTION
Fat Beats, Inc. What is it?. History. Retail basement store open in 1994 Owned by Joseph Abajian (DJ, B-Boy, and producer DJ Jab) Fat Beats, Inc. Headquarters in Brooklyn “The Last Stop for Hip Hop” Niche DJ market. Vertical Integration. Production: Fat Beats Records - PowerPoint PPT PresentationTRANSCRIPT
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Fat Beats, Inc.
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History
• Retail basement store open in 1994
• Owned by Joseph Abajian (DJ, B-Boy, and producer DJ Jab)
• Fat Beats, Inc.
• Headquarters in Brooklyn
• “The Last Stop for Hip Hop”
• Niche DJ market
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Vertical Integration
• Production: Fat Beats Records
• Distribution: Fat Beats Distribution– “premier international independent distribution
company specializing in vinyl”
• Retail: Fat Beats and Fatbeats.com– “destined to corner the market in on-line hip
hop sales”
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So, Fat Beats Can???
• Produce content
• Distribute its content to retailers
• Sells its content at its retail locations
• Promote its artists through in-store signings/performances
• Creates…???– Synergy!!! Of its commodities by selling
albums, CDs, tee shirts, DVDs
• Who does this sound like???
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Production
• “much attention from major labels eyeing Fat Beats as an A&R source in hopes of landing the next big artist”
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Distro• Opened in 1996
• worldwide clientele for wholesale and mail-order selections of various independent releases
• Clients= “crucial mom & pop retailer or dj store”
• “Independent record stores are vital to keeping this music we all love alive”
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Distro Cont’d
• “Decidedly not a one stop”…?
• “distributing and marketing” artists
• $4M in distro sales in 2003
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Labels Distributed
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Retail
• NYC
• Los Angeles
• Formerly– Amsterdam– Atlanta
• Web
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Employees
• “Fat Beats employees are likely to be top area DJs”
• a “true representation” of the customer visiting the store
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Competition
• Production
• Distribution
• Retail– “destined to corner the market in on-line hip
hop sales”
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The Alliance
• Newly formed alliances with companies such as Loud, Tommy Boy, Interscope, Caroline, and Koch
• October 30, 2007 KOCH Entertainment Dist. signed an exclusive physical and digital distribution deal
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The Deal, YO!
• “Fat Beats’ successful brand of true underground hip hop will further strengthen our status as the No. 1 physical and digital supplier of urban music”~Michael Rosenberg, President KED
• “Over the years both companies have grown and come back full circle to work together again. Whereas Fat Beats once lent a hand in showing KOCH the hip hop scene, KOCH can now reciprocate and help Fat Beats artists…get into more markets”~DJ Eclipse, NYC Store Mgr/artist
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So, What’s Up???
• Matt, Fat Beats A&R:
• “Unfortunately, we cannot release any confidential information about our company…”
• “Sorry man, I can’t really help out”
• Private Company!!!
• Maybe, now major corporate interest= shhhhhhhhh
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• KOCH Entertainment LP
• “is vertically integrated and distributes its own content”
• Music Distribution
• Record labels/affiliated labels
• Video distribution
• Music Publishing
• Michael KOCH/1987/ One of 6 “Indie” reps on RIAA
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KOCH Records
• Rap and Children’s music• America’s largest independently distributed
record company. • 1999, got its start distributing Death Row
Records– Jim Jones A&R– WWE (F), Terror Squad, DJ Unk – $40-50M in revenues– 240 titles– #5 Rap Label, 5% market share for rap– .65% market shart
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KOCH Entertainment Dist.
• Most $$$ “arm”• $175M in revenues (33%=digital sales)• 25,000 titles/280 labels• Ship, market, process music:
– “gives us a higher degree of control” M.K.
• May 2007, $6.5: • 2.7% market share
– 3.3%– 2.6%
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Other Subsidiaries…
• KOCH Vision– Distributes for 400 film companies
• KOCH Music Publishing– 2,500 song catalog
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• 2005, Row Entertainment (Entertainment One), buys KOCH for $80M
• Canada’s largest video/music distributor• $700M Revenues in 2008• Ships 30K-60K pieces a day• Publicly Traded on London AIM market• “expanding content exploitation”; “exploit
cost synergies”; “capitalise on cost synergies”; and “consolidate geographic position”
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• Publicly Traded on London AIM market– 1.3M public shares, 67.31% of stock is private
• March 2007, Marwyn LLP buys Ent. One for $160M
• Through Marwyn’s capital, Ent. One made many international film/music distro purchases
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• London-based hedge fund
• Specializes in…?– buyout – consolidation strategies
• Incorporated in…?
Cayman Islands
• $2B in acquisitions in 3 years
• 79% is privately held
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Diversification???
• hazardous waste plants
• alcohol and drug abuse laboratories
• global laboratories
• online betting services
• construction training
• environmental safety consulting
• snack foods industry
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• Hedging???:– reducing the risk of loss through short-term
investment in derivatives; that is, buy today and sell tomorrow for a profit.
– Corporations and banks invest in derivatives to “hedge their position, essentially buying a kind of insurance”
• Derivatives?:– offset “the risk involved in other securities
position…” and “mitigate those losses by selling short” ~Marwyn
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January 22, 2009
• E1 Music=– KOCH Records
• E1 Entertainment= – KOCH Ent. Dist.
• E1 Music Publishing= – KOCH Music Pub
• E1 Entertainment U.S.– KOCH Vision
• E1 Music Publishing= – KOCH Music Publishing
• No mention of Ent. One
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Some Questions/Analysis…
• 1) Since the majority of KOCH Records’s sales are hip-hop or rap music, what does this mean for companies like Fat Beats?
• 2) What does KOCH Entertainment really mean by independent?
• 3) What does “independent” really even mean anymore?
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Cont’d
• 4) Is there truly any competition in the recording industry? Especially in terms of distribution?
• 5) Can independent music/underground hip-hop and hedge funds coexist?
• 6) What does this relationship w/ hedges and off-shore trading mean in terms of the artists’ messages?
• 7) If “indies” supposedly subvert the dominant system (music and in general), are they, in fact, just reinforcing that system/status quo?
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• If 80% of the music sold in America comes from the “Big Four” and 10% from the independents (ADA, RED, KOCH/E1) what “choices” do we have?
• Does this really even matter in the age of digital capitalism/music???