Release Proposal

Pez Productions -

Recording costs = 500 (studios)

Promotion costs = 70 (Flyers, Radio, Videos, Adverts)

Manufacture = 100 (5000 CDs/Use of social media)

Distribution costs = 25% commission to Itunes per Album sold = 0.63

= 25% commission to shops per CD sold = 0.63

Distribution sales (Itunes) = 1 Album sold at 2.50 presuming 600 sold (depending on use of Itunes)

= 1,500 made from Itunes

= Commission removed = 1,122 made (-378)

Distribution sales (Shops) = 1 CD sold at 2.50 presuming all 5,000 manufactured are sold

= 12,500 made (presuming all 5,000 CDs sold)

= Commission removed = 9,350 made (-3,150)

Total costs = 500 + 70 + 100 + 378 + 3,150

= 4,198

Total profit = 1,500 + 12,500

= 14,000

= 14,000 - 4,198 = 9,802

Breakeven = total revenue/fixed cost = 9,802/2.50

= 3,920 CDs need to be sold to break even.

When creating Pez Productions it was evident there would be elements of risk taking in order to succeed thereby resulting in healthy revenue and/or to break even. As I am not an experienced personnel within the music business industry the first obstacle I came across was the initial low budget I would have to work with in order to evolve the release. In comparison to Domino records 90k budget this initially seemed a daunting proposal, however when taking into account the individual elements of creating the proposal it proved to be a plausible and tangible task. The risk of Domino records large loan, however, does prove to enable the company to hire more individuals out of house. These would include individuals such as press promoters, radio advertisers and admin staff which then creates a more efficient and organic business, evolving and grasping the attention of the public in order to generate greater revenue. These individuals are highly skilled workers within the industry and can bring a vast amount of experience when it comes to generating revenue.

Due to my smaller budget, it was clear the distribution costs would be less than that of Domino records. This therefore meant that not as many CDs could have been produced, which has the knock on effect of restricting the maximum profit that could be made. This then creates an overall downsized effect of my proposal in comparison. For example, the smaller amount of money I have to spend on overall costs means creating, recording and producing is restricted. This also means promotion is then restricted due to smaller amounts of staff being hired. This caveat means a smaller amount of the general public would be aware of my production and so sales are restricted and therefore income is also. Furthermore, this slight lack of awareness could then jeopardise possibilities of a larger scale tour. For example, Domino records would be able to advertise, hire large venues and sell larger amounts of tickets than Pez Productions. This isnt just because of their large budget. They can afford to peruse tours as they are a recognised brand within the music industry. Being a new record label, not many people are going to trust the music I produce as it will be in an entirely different niche of the market as opposed to big league competitors. This could come down to the fact that in comparison, my advertising budget is nothing compared to the 6500 Domino records have spent, therefore, you really do get what you pay for.

It can be said though that nothing is impossible. Lawrence himself literally started from the bottom and built this career by being an entrepreneur who wasnt afraid to take a risk. This risk resulted in him becoming a worldwide known owner of record label. Lawrence was very lucky in the respect that he managed to discover a band that would have no issues selling out tours or releasing songs every so often. This really did go in his favour, although I think it wouldve been a very different story when taking the professional out of house individuals out of the picture. They are the people who helped him to fill the niche in the business market where new talent was needed. They provided with the opportunity to change the music business altogether. In my case however, it is a different story as my budget cant cover the costs to hire all the professionals. Therefore, even though I might have a talented artist with a brilliant album to release without money or risk taking I will never get nowhere in the means of succeeding. Selling over 3000 copies to break even on a budget as small as mine can be a risk in itself as I am only presuming I sell out of both Itunes and the shops CDs. If I dont sell out fully it would be very close when it comes to actually managing to break even. Lawrence on the other-hand doesnt seem to struggle with this issue at all.

As Lawrences first discovered band was a huge success he now had the taste of fame and wanted more. He was very lucky to be so successful with both bands and is now literally sitting at home just watching the money roll in. Although my event is on such a smaller scale, if it all went according to plan then my next objective would be to aim higher and progress my discoveries further in order to be earning big money. It is proof that if you do some research of the music market you can see the way in which the traffic is generated and is attracted to certain genres. This then allows you to either create a new niche or become a competitor in which you would need to produce good advertisement to ensure a successful release. It is a risky business to be working in but it is also a business where you can strive to success very quickly. Taking a gamble on barely known artists can easily provide failure but yet with failure you can still gain success. For example, if you happen to not break even, yes it is a fail on the money side but you still have built a reputation for the band youre releasing and the record label that you are. This can generate a huge response especially if gone viral, as the promotional costs wont have to be as much or all the time.

In conclusion Lawrence took a huge risk and went from just a plain Jane to a rocketing businessman over night. It is a very competitive industry to work in and it really proves that if you really want to succeed then you cant let any obstacles or fear of failing get in your way.