Are you about starting a music streaming company? If YES, here is a complete sample music streaming (Spotify) business plan template & feasibility report you can use for FREE. Okay, so we have considered all the requirements for starting a music streaming company. We also took it further by analyzing and drafting a sample music streaming company marketing plan template backed up by actionable guerrilla marketing ideas for music streaming companies. So let’s proceed to the business planning section.
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
Why Start a Music Streaming Service (Spotify) Business?
The advent of computer and the internet has made a lot of things easy to accomplish from the comfort of your home. Many can now shop online, book appointments online, open bank accounts online, and do a host of other things. This has made most youths wonder what life would really have looked like decades ago when there was no internet.
Many businesses have continued to spring up over the years via the internet. While some folks know how to make money via the internet, others just use the internet for pleasure like chatting, checking up on friends, sending emails and what have you.
One innovation which a lot of folks have begun to cash in on recently is music streaming services (Spotify). If you fall amongst the folks described earlier who are passionate about making money online, then you just might want to consider starting your own music streaming services business.
If you are considering starting your own music streaming services business, the first rule of thumb you must obey is to own a desktop computer or a laptop with internet capacity that supports live streaming. Computers are configured for various purposes, be sure that yours is configured by an expert for this particular purpose.
The next step is to come up with a good business plan and here is a sample music streaming services business plan that will help you write yours with little stress.
A Sample Music Streaming Service (Spotify) Business Plan
1. Industry Overview
Reports have shown that the global recorded music market grew by 5.9 percent in 2016, the highest rate since 1997. According to the report, total revenues for 2016 were US$15.7 billion. Also at the end of 2016, there were 112 million users of paid music streaming subscriptions driving streaming revenue growth to 60.4 percent.
Digital income last year accounted for half the global recorded music industry’s annual revenue for the first time. Experts believe that the growth in streaming more than offset a 20.5 percent reduction in downloads and a 7.6 percent decline in physical revenue.
Streaming is helping drive growth in developing music markets, with China (+20.3%), India (+26.2%) and Mexico (+23.6%) seeing strong revenue growth. Note that record companies have gingered this increase on revenue through ongoing investment, not only in artistes, but also in digital platforms, which has allowed for the licensing of over 40 million tracks across hundreds of services.
The trend in this industry shows that it is now working towards a return to sustainable growth following a 15-year period during which revenues dropped by nearly 40 percent. We believe strongly that the success needs the resolution of the market distortion known as the ‘value gap’ – the growing mismatch between the value that user upload services, such as YouTube, extract from music and the revenue returned to those who create and invest in music.
The Music Stores industry is indeed a very large industry and pretty much thriving in all the parts of the world. Statistics has it that in the united states of America alone, there are about 3,959 legally registered and licensed music stores scattered all across the United States responsible for directly employing about 16,581 employees and the industry rakes in a whooping sum of $2 billion annually.
It is important to state that the industry is expected to experience – 7.3 percent growth within 2010 and 2016. Trans world and iTunes have the lion share in the global market for music, but no single operator has control over the pricing, advertising, distribution model or customer loyalty in the Industry.
In October 2008, Spotify was firstly introduced to the world by two former CEOs, Daniel EK and Martin Lorentzon as a tiny start up project. A lot of people find it hard to believe that the music app development company Spotify came from Sweden, contributing into the long list of successful innovations, along with Skype (in collaboration with Estonian software developers), King (more recognizable under the “Candy Crush” name) and a few other giants. Spotify’s prior function are music, podcast, and video streaming services.
Music can be browsed or searched by artiste, album, genre, playlist, and record label. Users can create, edit and share playlists, share tracks on social networks, and make playlists with other users. Available in 20 locations worldwide, the service was already gaining grounds around the world in 2011 when it hit the point of 1 million paying subscribers. We believe that this amount has increased in number since that time in tens of millions.
The percentage of people in the United States who are willing to pay $10 a month for music increased drastically in 2016 and still have more space for massive additional growth. All told, about 100 million people are believed to subscribe to music services (This doesn’t include free streaming from SoundCloud, YouTube, or Spotify’s free tier).
Joined together, there are 319 million people in the United States alone, so there’s plenty of room for growth. Just look at Apple Music, the service which is available in 113 countries and comes pre-installed on every iOS device only took a year and a half to reach half of Spotify’s size in terms of paying subscribers. And they both keep expanding.
Now we have Amazon Music Unlimited, which is well positioned to reel in new subscribers at $8 per month for Prime members. Then anytime Pandora finally launches its subscription service, it will have 78 million listeners to potentially convert into paying subscribers, not even thinking of the newfound possibility of expansion beyond the U.S., New Zealand, and Australia.
2. Executive Summary
Sing Along™ Music Streaming Services, LLC is a U.S registered internet based company that will leverage on streaming various genres of music online. We have been able to secure a standard office facility in a central business district in San Diego – California. Sing Along™ Music Streaming Services, LLC is the combination of a music streaming service and social media.
At our platform, a month subscription for premium account costs $9.99. This price covers unlimited access to a huge vault of music. Coming to the extra options, users can post to their Facebook pages the music they are listening to. Sing Along™ Music Streaming Services, LLC will also suggest a few-tap access to complete libraries of artistes, albums, radio stations, playlist even if user’s choice is based on their mood.
The distinctive feature of Sing Along™ Music Streaming Services, LLC is our overall experience and usable interface. Our business goal is to become one of the leading music streaming services platforms in the United States of America with high profile corporate and individual clients scattered all around the world. Sing Along™ Music Streaming Services, LLC covers iOS and Android platforms.
Our workers are going to be selected from a pool of talented and highly creative music streaming and social media experts in and around San Diego – California and also from any part of the world as the business grows. We will make sure that we take all the members of our workforce through the required training that will position them to meet the expectation of the company and to compete with leading music streaming companies in the United States and throughout the globe.
At Sing Along™ Music Streaming Services, LLC, our client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Sing Along™ Music Streaming Services, LLC is founded by Andrea Coleman and his friend and business partner Bob Sutton. They both graduated from Illinois Institute of Technology and they have a combine experience that revolves around video and music editing and streaming, apps development, web designing, graphic designing, social media management et al.
3. Our Products and Services
Sing Along™ Music Streaming Services, LLC is established with the aim of maximizing profits in the music streaming line of business. We want to compete favorably with leading music streaming platforms in the United States of America and the world which is why we have but in place a competent team that will ensure that we meet and even surpass our customers’ expectations.
We will work hard to ensure that Sing Along™ Music Streaming Services, LLC do not just work for clients in the United States of America, but also for clients in other parts of the world. Our products and services are listed below;
- Streaming a wide genre of music
- Music Streaming apps
- Music Player apps
- Music Identification apps
- Music Download apps
- Music Making apps
4. Our Mission and Vision Statement
- Our vision is to establish a standard and world class music streaming services platform that will accommodate users from all across the world.
- Our mission is to provide professional and user-friendly music streaming platform that will make available a wide genre of music to music lovers all across the world at an affordable subscription and fee per download.
Our Business Structure
It is important to state that the music streaming services business can be run as a one man show, but Sing Along™ Music Streaming Services, LLC, is a standard music streaming services platform that intends starting small in San Diego, but hope to grow big in order to compete favorably with leading music streaming services platforms in the industry both in the United States and on a global stage.
We are aware of the importance of building a solid business structure that can support the picture of the kind of world class business we want to own, which is why we are committed to only hire the best hands within our area of operations.
At Sing Along™ Music Streaming Services, LLC, we will ensure that we hire people that are qualified, hardworking, creative, result driven, customer centric and are ready to work to help us build a prosperous business that will benefit all our stakeholders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer
- Creative Director
- Human Resources and Admin Manager
- Sales and Marketing Executive
- Music Editor
- Programmers and Software Apps Developers
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Responsible for designing concepts and winning business proposals for the organization
- Develops strategic plan by studying video and music technological, and financial opportunities; presenting assumptions; recommending objectives
- Accomplishes subsidiary objectives by establishing plans, budgets, and results measurements; allocating resources; reviewing progress; making mid-course corrections.
- Maintains quality service by establishing and enforcing organization standards.
- Ensures that the organization work in line with international best practices
- Responsible for handling core music streaming services such as music/video uploading, banner advertising, video/music advertising, sponsorship advertising, lead generation etc
- Responsible for sorting music into different genre and managing requests from clients
- Ensures that all music on our platform are of quality sounds and easy to play on all platforms
- Responsible for engaging subscribers to get statistics and leads
- Manage subscribers
Programmers and Software Designers
- Responsible for designing and developing mobile apps to meet the latest trend
- Stays abreast with the dynamics of the ICT industry with key interest in mobile apps and other related software applications
- Research and advice the organization on style, genre and other trendy info as it relates to mobile apps.
Human Resources and Admin Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Designs job descriptions with KPI to drive performance management for clients
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities
Sales and Marketing Manager
- Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Model demographic information and analyze the volumes of transactional data generated by customer
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Writing winning proposal documents, negotiate fees and rates in line with organizations’ policy
- Responsible for handling business research, market surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develop, execute and evaluate new plans for expanding sales
- Create new markets cum businesses for the organization
- Empower and motivates the sales team to meet and surpass agreed targets
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization.
6. SWOT Analysis
Because of our quest for excellence when it comes to running an Online business, Sing Along™ Music Streaming Services, LLC engaged the services of a core professional in the area of business consulting and structuring to assist our organization in building a well – structured music streaming services business that can favorably compete with other players in the industry.
Part of what the team of business consultant did was to work with the management of our organization in conducting a SWOT analysis for Sing Along™ Music Streaming Services, LLC. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Sing Along™ Music Streaming Services, LLC;
Our core strength lies in the power of our workforce. We have a team of creative, result driven and highly proficient music streaming experts, a team with excellent qualifications and experience in various niche areas in the industry. Aside from the synergy that exists in our carefully selected workforce, our services will be measurable, result driven and guided by best practices in the industry.
As a new music streaming service in San Diego – California, it might take some time for our organization to break into the market and gain acceptance in the already saturated and highly competitive music streaming industry; that is perhaps our major weakness. Another weakness is that we may not have the required cash to pump into promoting our business especially via main stream media (TV, Radio and Newspapers et al) the way we would want to.
The opportunities available to standard online music streaming services platforms is massive considering the number of individuals with active presence on the internet and of course the large number of people that visit the internet/social media on a daily basis and own smart phones and other related gadgets. As a standard and world class music streaming services platform, we are ready to take advantage of any opportunity that is available in the industry.
One major threat to music streaming services business is the fact that people know how to go about getting the music they love without necessarily subscribing or paying to download and this will definitely impact negatively on the revenue generated by music streaming services platforms.
7. MARKET ANALYSIS
- Market Trends
In recent times, and with major advancements springing up as the world goes global, we have come to see other viable means of making money whilst selling music. One of such avenues is through the iTunes. ITunes is one of the most populous music stores in the whole world. It commenced its digital music revolution and have since recorded and made maximum impact.
Spotify is a music streaming and playlist social sharing service available in 60 countries. It has over 30 million songs in its library and it works across almost all devices. Users do not have to download songs and store them on a hard drive to listen. In Spotify, users just find a song or album and play it online right away.
If you keep tab with the music streaming business, you would have noticed that it is now a common phenomenon for music stores to leverage on technology to effectively predict consumer demand patterns and to strategically position their music store to meet their needs; in essence, the use of technology helps online music retailers to maximize supply chain efficiency.
In as much as music streaming services is dependent on technology which is ever-evolving and fast-changing, the same features should be expected from music streaming platform development and strategies. Another important factor worthy of mentioning in this industry is that as the target market keeps expanding, people are now seeing the need for them to have their own online music library.
8. Our Target Market
When it comes to selling music, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but the online community. One thing is certain, we will ensure that we have a wide genre of music and videos in our music streaming platform at all times.
Indeed, the music streaming market is really competitive and your app should have some distinguishing features in order to stay competitive in this line of business.
We are quite aware that to be highly competitive in the music streaming line of business means that you are not only expected to deliver excellent services, but you must be result driven and able to upload tending music on your platforms as fast as possible.
Our competitive advantage lies in the power of our workforce. We have a team of creative, result driven and highly proficient music streaming experts, a team with excellent qualifications and experience in various niche areas in the online industry. Aside from the synergy that exists in our carefully selected ICT experts, our services will be measurable, result driven and guided by best practices in the industry.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Sing Along™ Music Streaming Services, LLC is established with the aim of maximizing profits in the music streaming services industry and we are going to go all the way to ensure that we do all it takes to meet and surpass the expectations of our clients. Sing Along™ Music Streaming Services, LLC will generate income from;
- Music downloads
- Subscription fees
- Sponsorship advertising
- Digital display advertising
- Mobile advertising
10. Sales Forecast
It is important to state that our sales forecast is based on the data gathered during our feasibility studies, market survey and also some of the assumptions readily available on the field.
One thing is common with music streaming platforms, the larger the music store, the larger the number of customers that will patronize them. Although we may not be as large as the biggest online music store in the United States, but we will ensure that within our capacity we make available a wide genre of music and video from different artistes all across the globe in our store.
We are well positioned to take on the available market in the online community and we are quite optimistic that we will meet our set target of generating enough profits from the first six months of operation and grow the business and our clientele base.
We have been able to critically examine the music streaming services industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups.
- First Fiscal Year: $120,000
- Second Fiscal Year: $350,000
- Third Fiscal Year: $750,000
N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
We are mindful of the fact that there is stiff competition in the music streaming services line of business, hence we have been able to hire some of the best marketing experts to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the music streaming services industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall business goal of Sing Along™ Music Streaming Services, LLC.
Our corporate goal is to grow Sing Along™ Music Streaming Services, LLC to become one of the leading music streaming platforms in the United States of America which is why we have mapped out strategy that will help us take advantage of the available market and grow to become a major force to reckon with not only in the United States of America but also in other parts of the world.
Sing Along™ Music Streaming Services, LLC is set to make use of the following marketing and sales strategies to attract clients;
- Advertise our business in relevant business magazines, newspapers, TV and radio stations
- Leverage on the internet which is our forte to promote our business
- Engage direct marketing approach
- Encourage word of mouth marketing from loyal and satisfied clients
11. Publicity and Advertising Strategy
We have been able to work with our in-house publicity consultants to help us map out publicity and advertising strategies that will help us penetrate our target market. We are set to become the number one choice for both corporate and individual clients in the whole of the United States and beyond which is why we have made provisions for effective publicity and advertisement of our music streaming services platform.
Below are the platforms we intend to leverage on to promote and advertise Sing Along™ Music Streaming Services, LLC;
- Place adverts on both print and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like, Instagram, Facebook, twitter, YouTube, Google + et al to promote our services
- Install our billboards in strategic locations all around San Diego – California
- Distribute our fliers and handbills in target areas
- List our music streaming website in local directories
- Advertise our music streaming services in our official website and employ strategies that will help us pull traffic to the site
- Ensure that all our staff members wear our branded shirts and all our vehicles are branded with our company logo
12. Our Pricing Strategy
At Sing Along™ Music Streaming Services, LLC we will keep the prices of our products and services below the average market rate by keeping our overhead low and by collecting subscriptions in advance. In addition, we will also offer special discounted rates to all our customers at regular intervals.
- Payment Options
The payment policy adopted by Sing Along™ Music Streaming Services, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Sing Along™ Music Streaming Services, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via POS
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for services rendered without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
The startup costs for music stores are low because they require relatively little initial capital outside of renting or buying a location, purchasing computer, internet facility and if desired, security and sound systems. Although the list of what is needed to launch a music store business may be more, but they are low enough to permit non – employers to open a music store with minimal difficulty.
Competition has become the main and perhaps the only barrier to entry into this industry. Just as most retailers face increasing competition from online sales, the music industry faces added threat from music being offered for free online.
However, this is what it would cost us to setup Sing Along™ Music Streaming Services, LLC in the United of America;
- Business incorporating fees in the United States of America will cost – $750
- The budget for liability insurance, permits and license will cost – $3,500
- Acquiring an office space that will accommodate our employees (Re – construction of the facility inclusive) will cost – $100,000
- Equipping the office (computers, printers, projectors, markers, servers / internet facility, furniture, telephones, filing cabinets, and electronics) will cost – $30,000
- Amount required to purchase the needed software applications – $3,500
- Launching an official website – $500
- Amount need to pay bills and staff members for at least 2 to 3 months – $70,000
- Additional Expenditure such as Business cards, Signage, Adverts and Promotions will cost – $5,000
- Miscellaneous – $5000
Going by the report from the market research and feasibility studies conducted, we will need about two hundred and fifty thousand (250,000) U.S. dollars to successfully set up a medium scale but standard online music streaming service in the United States of America.
Generating Startup Capital for Sing Along™ Music Streaming Services, LLC
Sing Along™ Music Streaming Services, LLC is a business that will be owned, financed and managed by Andrea Coleman and his friend and business partner Bob Sutton. They are the sole financiers of the business which is why they decided to restrict the sourcing of the startup capital for the business to just three major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings and sale of stocks
- Generate part of the startup capital from friends and other extended family members
- Generate a larger chunk of the startup capital from the bank
N.B: We have been able to generate about $100,000 (Personal savings $85,000 and soft loan from family members $15,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a music streaming service platform lies in the number of loyal subscribers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Sing Along™ Music Streaming Services, LLC is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to offer our subscriptions and download fees a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Sing Along™ Music Streaming Services, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Securing a standard office facility in a good location: Completed
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Generating part of the startup capital from the founders: Completed
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of Logo for the business: Completed
- Secure trademark for our products: In Progress
- Graphic Designs and Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the needed internet server, furniture, office equipment, software applications, electronic appliances and facility facelift: In progress
- Creating Official Website for the business: In Progress
- Creating Awareness for the business: In Progress
- Safety and Fire Safety Arrangement: In Progress