Highlights
Executive Summary
- Founded by three serial entrepreneurs.
- Targets a valuable overlooked niche market in the music industry.
- Masters Radio uniquely empowers artists to debut their latest tracks while forging deep connections with an engaged community of music enthusiasts.
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Market, Products and Services Overview
- Music streaming market projected to have reached $25.84 billion in 2023
- Masters Radio has over 300 million content views and over 275 thousand people engaging each month.
- Masters Radio uniquely empowers artists to debut their latest tracks while forging deep connections with an engaged community of music enthusiasts.
- Masters Radio offers music, interviews, live events, and unique fan engagement opportunities.
- Four revenue streams: Advertising, Subscriptions, Commissions from investments and benefits, merchandise and events sales
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Marketing Strategy
- Leverages founders' LinkedIn business connections.
- Engages professionals for ad sales and subscription marketing
- Conservative market share targets.
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Sales Strategy
- Commission-based sales for advertising.
- Commodity portion of our offer below competitor costs
- One stop shop for creation and distribution of ad content
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Financial Projections
Year 1 | Year 2 | |
Total Revenue | $6,997,854 | $12,842,856 |
Total Expenses | $4,015,133 | $7,678,563 |
Profit | $370,418 | $5,164,293 |
Investor/Artist | $756,985 | $2,568,571 |
- Mix of discretionary and recession-proof income streams
- Similar growth projections to Pandora though starting off with more
- Conservative but effective projections for salaries, marketing, limited non-sales costs
See Three Different Forecasts Here
Investment Terms
- Shares offered at $500 each.
- Sold in batches of 100 shares.
- Fundraising goal of $500,000.
- Shares redeemable for $1500 upon company earning $1M in revenue.
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Use of Proceeds
- Fund marketing and sales strategies.
- Limited hiring and no office expenses
- Only 7 months before expenses fall below 20% of revenue
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Risk Factors
- Market conditions may affect profitability.
- Competition from other music streaming services.
- Reliance on the popularity of featured artists.
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Your Next Steps
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We will send you a complete potential investor information document with more detail on the topics above, our financial proforma and specific terms of the investment and what to look for when the opportunity is available.
Detailed Investor Information
Executive Summary
Overview
Masters Radio, a brainchild of three seasoned entrepreneurs, is poised to revolutionize the music industry by championing the cause of artists and their fans. Born out of Rob Snyder’s passion seven years ago, Masters Radio has grown exponentially, and it’s time to elevate it to a prominent and profitable position in the digital music industry. Our focus is on playing new music from artists who first gained popularity twenty years ago or more, pre-2023. Our database boasts over 3000 solo artists and bands from all genres. We share their music with fans through a stream of approximately 100 new songs, accessible globally via our website and apps on Apple and Google Play
Background
The music industry, including terrestrial, satellite, and most digital streams, often overlooks these artists’ new music. Despite producing quality music, these artists are sidelined in favor of the industry’s relentless pursuit of the next big sensation. This approach has led to dwindling revenues for artists and escalating subscription costs for fans.
The Unique Value Solution
Masters Radio aims to disrupt the current digital music model by increasing artists’ revenue share while keeping subscription costs low. We have identified multiple revenue streams, including unique concierge advertising options and an attractive pricing model for our standard streaming audio and online platform media ads. We offer an affordable price point to businesses unable to afford top-tier broadcasters and platforms. Our basic subscription is $5 per month, granting fans access to exclusive interviews, curated playlists, merchandise, and events. We also provide artists with access to affordable healthcare and other benefits, and we have developed artist pages on our site to help them raise capital for music tours and development
Revenue
Our conservative first-year plan targets a 1% conversion of the digital music advertising market to which we already have connections, aiming to earn $4M in ads from just 740 monthly retainer-paying customers. We also aim to convert 1% of our monthly worldwide reach to a $5 subscription model, generating approximately $2M in revenue. We anticipate enrolling 700 artists for benefits in the first year, yielding revenue from commissions of $1.6M. We expect a modest $19k in revenue from merchandise sales in the first year. Once we establish this model, we will share it with artists so they can also sell their merchandise on their pages through the Masters Radio main site. Merchandise is currently a major source of artist revenue in the advent of digital music access and lack of direct music sales.
Growth
Envisioned for Masters Radio’s first year is a, common for the industry, quadratic growth, or “hockey stick” with our customer conversion, revenue targets per month, and expenses and staffing. We anticipate a gentler curve in year two as we transition from growth to the operating phase of the business cycle. Our plan covers the two years for which we can make solid assumptions. Market conditions and the availability of the same artists’ music by the rest of the industry present a risk to our business model and as such dictates we not project beyond this two-year point. As operations commence, we will fine tune the plan, work with our advisory board (who have all been leaders in businesses like Masters Radio), and work with our artists to determine the direction for Masters Radio.
Conclusion
Masters Radio has identified and is ready to fill a void in an established industry. We have proven that both fans and artists want Masters Radio to succeed. Our platforms are accessed by millions of people per month around the world, and our stream is heard on all seven continents. Our plan is easily implemented and relatively easy to accomplish, with a sustainable profit margin and burn rate. We aim to change at least a small part of how the music business treats artists, the very individuals who create the music that becomes the soundtrack to our lives.
The Leadership Team
Jay Slonaker
Jay is the Chief Marketing Officer and a veteran digital marketing and media professional.
Market Analysis
The global music streaming market is experiencing significant growth. According to various sources, the market size is projected to reach a revenue of US$25.84 billion in 2023. The market was estimated at USD 34.53 billion in 2022, with an expected compound annual growth rate (CAGR) of 14.4% to 15.10%. The demand for music streaming services has increased, with a 26.4% growth in worldwide streaming subscriptions in the second quarter of 2021 The market is expected to be worth around USD 125.70 billion by 2032. The market is driven by factors such as the widespread use of smart devices, the increasing acceptance of digital platforms, and the availability of high-speed internet. The market segmentation is primarily based on platform, service, end-use, content type, and region. The biggest pain points consumers have with music streaming services include in-app bugs, wrong recommendations, unwanted ads, and offline use.
Masters Radio is, from a revenue perspective, a startup but it has been around for years and therefore has a track record to better validate the size, scope and worth of the likely market. Over 300 million people have seen our content and over 10% of them have engaged to find out more. So with a potential reach of 3.5 million we anticipate easily obtaining the market share of advertisers listed below in the marketing plan and a good number of subscribers from our followers but also among the 5 million app purchasers.
For the App Download
Customer Segment | Total | Market Share | Converted | Price |
Listeners | 3,300,000 | 1% | 33,000 | $1 |
App buyers | 5,000,000 | 1% | 50,000 | $1 |
For the Monthly Subscriptions
Customer Segment | Total | Market Share | Converted | Price |
Listeners | 3,300,000 | 1% | 33,000 | $5 |
Products and Services Overview
Masters Radio will offer digital content in the form of video, audio (music and interviews), live and virtual events, options for direct and indirect fan and artist engagement for funding projects, purchasing merchandise and event tickets, real-time video conferencing between artists and fans and, via partners, enhanced listening technology for the fans and enhanced control over their digital creations for our member artists as well as comprehensive corporate employee style benefits.
There are five paths to revenue.
- Advertising – We are a low-cost, high-reach option for customers who want finely grained demographic targeting and comprehensive reporting on results. We plan to be the “Go 2” option for mass media buyers seeking an effective alternative for the most expensive outlets.
- Subscriptions – While many of our member artists’ content is available in multiple ways besides Masters Radio, our analytics since we started prove that our unique content: playlists, interviews, podcasts, and music news are all at a level typically available (Rolling Stone for instance) at a much higher premium subscription than our $4.99 per month. Again we’ll provide a lower cost to the subscribers for a broader and usually better quality of content.
- Benefits – our partner providers of benefits pay commissions for each member we enroll while they maintain their premiums. These benefits would not be available to our members any other way and, upon our attainment of first year goals, will be subsidized or paid outright by Masters Radio. In good times or bad, people pay their health insurance so there’s a more recession resistant path to revenue.
- Event, merchandise and investment revenue. Our artists will leverage our reach and capabilities in event and merchandise sales to bring in more revenue for themselves and we’ll take a small commission for that as well as the commission on our providing crowdfunding services for the artists projects supported by their fans or investors. The ability to combine advanced financial technology with advanced entertainment technology is a differentiator allow us to be more valuable to our member artists and subscribers who support them.
- Funding – Masters Radio is unique in being a community of musicians and their fans that is connected to a turnkey regulated investment platform to support crowdfunding and other ways for our users to convert their social capital into working capital. Masters Radio gets a percentage (typically 3 to 8%) of all capital raised.
Marketing Strategy
The marketing strategy includes leveraging the founders’ business connections on LinkedIn and a conservative approach to market share targets. The company plans to use contracted Digital Media ad sales professionals and engage a professional subscription marketing agency to ensure capture of revenue targets.
The strategy reflects some very conservative assumptions. With a similar model, Pandora Media, grew fourfold in its first year. We face more competition than they did but we have more revenue channels (benefits, events, and merchandise) and are providing exclusive content they didn’t have.
The three founders have about 22,000 business connections on LinkedIn. Here’s how what we believe would be the best market targets break down:
Customer Segment | Total | Market Share | Converted |
Corporate marketing pros | 4,320 | 25% | 1,080 |
Artists & management | 8,160 | 5% | 408 |
Venues | 5,520 | 5% | 276 |
Marketing Providers | 3,984 | 25% | 996 |
It’s not unrealistic to assume a one in four close rate when putting together a senior level ad sales professional and a cost and impact conscious advertiser. The analytics make clear a high rate of engagement on our content indicating when we seek a call to action, those calls are made. We’ll be devoting a marketing budget that is a best practice percentage of revenue in proven ways to ensure our marketing efforts meet the market share goals.
Year 1 : $52,800
Year 1 : $107,440
For purposes of comparison:
It appears Pandora first reported revenue in the 4th quarter of 2005.
- Pandora launched its online radio streaming service in 2005.
- Pandora reported its first revenue in Q4 2005 of $311,000.
- Revenue grew to $1.4 million in Q1 2006 and $4.5 million by Q4 2006.
- Pandora’s revenue mostly came from advertising during its early years before launching paid subscriptions.
- Revenue grew steadily each year, reaching over $100 million in 2011 and over $1 billion by 2015.
It’s important to remember that, in the case of Masters Radio, streaming is only one of five revenue streams.
Sales Strategy
Advertising
The sales strategy focuses on above industry standard commission-based sales for advertising. Our costs for access to millions each month well below industry average and we offer both creation and distribution of digital media content providing a single vendor solution. The company has a detailed sales plan with projected customer acquisition and revenue. The sales plan for the advertising model relies upon commission-only (30%) people selling to the ad clients identified in the Market Analysis section. The average US business spends $200 per month on social media advertising. While a self-service process is in place to set up an advertisement on Masters Radio that will work well for several advertisers and media buyers, the commissioned sales team will focus on obtaining $5000 per month retainers to set up comprehensive campaigns. The core value proposition for Masters Radio advertising is that, unlike other providers, Masters Radio clients can get both content created and distributed. Smart people in advertising sales see this advantage. Nearly 100 applied for recently opened ad team positions at Masters Radio. A dozen were interviewed and four selected so far, all confident that their competencies and connections will ensure they meet their sales goals.
It would require only 221 customers or 1% of the 22000 mentioned above purchasing these retainers to meet revenue target for the advertising team , with each of our sales team earning just under a half million in commissions. Advertising is by far the most important of our paths to revenue.
Subscriptions
A professional contracted subscription marketing agency will be engaged outsourcing most efforts and all of the risks that would preclude being able to try multiple marketing methods. With this approach, partners, such as our benefits provider, would be marketing to likely subscribers of ours as they seek their own subscribers. Bundling subscriptions with other premiums and short term offers should generate an early surge in subscriptions while in the long run the word of mouth reputation and the ongoing quality of content will get new subscribers gradually while keeping current ones.
Subscriber management will be by partner Recurly, among the largest such providers in the business. Their client list also provides cross-promotional partnerships where subscribers for others of their clients can easily include subscriptions to Masters Radio and vice versa. It only takes 4820 subscribers to meet the year goal. That’s less than 2% of the monthly total of people who are currently engaging our content.
Benefits
Leveraging only our connections with our current artists and the most likely subset of our LinkedIn connections reveals the following market for benefits in the first-year netting $108,000 in commission.
Customer Segment | Total | Market Share | Converted | Commission per month |
LinkedIn connections | 25,000 | 1% | 250 | $20 |
Facebook/Insta connections | 5,000 | 1% | 50 | $20 |
Contacts | 15,000 | 3% | 450 | $20 |
It’s important to note that Masters Radio is incurring no risk typical of underwriters of benefits like healthcare. Our partner Gig Workers Solutions takes on these clients paying us a commission on their monthly premiums.
Non Recurring Revenue - Merchandise, Events, Investments
What we are calling our transactional channel as it does not focus upon monthly recurring revenues is what we’ll earn from selling our own brand merchandise and tickets to exclusive events, our commission on the sale of artists’ merchandise and any investment they obtain with our fan investment platform available to every member artist. In our first year we do not expect as much traction as we’ll get later when artists and fans, seeing the value in the brand, are more likely to support it.
We think we can sell hats without a lot of effort or risk to a small percentage of those already clicking our content. Our marketing will be ads in our stream and in our social media platforms that already see that high level of engagement. We have providers of “company store” brand marketing services that will for a small fee set up an online sales and fulfillment site, branded as Masters Radio or any desiring member artist, that will manage inventory, tax, shipping and handling thereby removing all the risks typical of a retail or online storefront.
The thousands of artists who support Masters Radio now have already committed to exclusive live and recorded events and a partnership in the first six months of operation will provide for a Masters Radio Presents touring concert series providing an opportunity for many of our artists who now can’t afford to go out on the road and get in front of their fans a way to pay for and manage the series.
Crowdfunding is one of the best ways people with large groups of fans and compelling content can get access to capital for funding new albums, tours, equipment purchases, even real estate and other securities investments. At present there is no music focused platform that is able to legally provide donations and investments to our artists and the fans that love them. A fully registered investment platform is connected to Masters Radio providing each member artist the way to get funds from their fans. The sales strategy for this is simple. Show the artists how this works and then get out of their way. We will not need to “close” anybody on the huge value this provides a community not often able to take advantage of other means of capital formation. Masters Radio takes a commission on each dollar raised on the platform.
Financial Projections
Masters Radio has a conservative first-year revenue target of $7 million, with multiple revenue streams contributing to this goal. The company has a solid financial plan which focused on profitability right from the start. There are three cases below add one with only a third of the goal, just under $3 million, as well as a dramatically increased stretch goal of almost $80M in the other cases’ two year projections. Note that there are no months without profit due to a careful control of costs once the plan begins. Also leaning toward conservative numbers, we determined a “likely addressable market” as opposed to a total addressable market by selecting among the four most likely ad buying business sectors (Corporate ad buyers, Artists & management, Venues, Marketing Providers) those to which the company founders have LinkedIn connections. That number is just under 22,000.
Case 1: "Good"
Case 1 is no new hires, no partner fees. Just organic growth to 43 retainer customers or 542 average ad buyers for the year. 2210 or just under a tenth of a percent of the monthly engaged listeners. Sales team averages $95k in commission for the year. Marketing from 3 to 9% of revenue.
Case 2: "Better"
Case 2 brings on new hires dedicated to ad sales and subscription growth From 1/10th to one percent of our average engagement leads to 221 retainer customers or 2750 average ad buyers for the year. Also, 1464 become 4820 subscribers. Sales team averages $464kk in commission for the year. Marketing plan at 3% of revenue. The member artist stipend and bonus fund accrues just over $1.2M at year end.
Case 3: "Best"
Case 3 hires to the full staff model providing just under $3M in payroll for area jobs. From just four percent of our average engagement leads to 882retainer customers or 2750 average ad buyers for the year. Also, 4820 becomes 19280 subscribers. Sales team averages $464kk in commission for the year. Marketing plan at 3% of revenue. The member artist stipend and bonus fund accrues just over $1.2M at year end. The sales team averages just under $2M in commissions, each and marketing expenses reduce to below 1% of revenue. The member artist stipend and bonus fund rises to $6M and $3M is used to pay for all artists benefits.
Case 1 - Good
Year 1 | Year 2 | |
Total Revenue | $1,303,324 | $2,410,145 |
Total Expenses | $932,906 | $1,536,601 |
Profit | $370,418 | $873,544 |
Case 2 - Better
Year 1 | Year 2 | |
Total Revenue | $6,997,854 | $12,842,856 |
Total Expenses | $4,015,133 | $7,678,563 |
Profit | $370,418 | $5,164,293 |
Investor/Artist | $756,985 | $2,568,571 |
Case 3 - Best
Year 1 | Year 2 | |
Total Revenue | $28,083,891 | $51,541,272 |
Total Expenses | $14,634,414 | $28,781,051 |
Profit | $13,449,477 | $22,760,220 |
Investor/Artist | $3,833,357 | $10,308,254 |
Investment Terms
Masters Radio is offering $500 shares sold in batches of 100 shares until $500,000 is raised. Upon the company earning $1M in revenue, each share will be redeemed for $1500.
Use of Proceeds
The proceeds from the private placement will be used to fund the growth strategies outlined in the business plan, including marketing, sales, product development, and operational expenses. Here are two graphs to indicate the use of funds (invested or earned) for each of Year 1 and Year 2.
Risk Factors
Investing in Masters Radio involves risks, including market conditions, competition, and reliance on the continued popularity of the artists featured on the platform; though some of that is offset by the benefits revenue stream. Also as there’s no equity in this offer, investors can’t liquidate assets to offset losses.
Masters Radio has undergone a comprehensive due diligence assessment. The questions and answers are here.