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Media Producer
Media ProducerBUSINESS PLAN DYNAMIC VIDEO 3470 University Blvd., Ste. 117 August 1994 This plan offers an outline of the steps necessary to launch a successful video production company. This award-winning business plan demonstrates a comprehensive consideration of product design, market, competition, industry, and financing, as well as an understanding of each partner's role. After applying this strategy, the authors revised it to reflect significant changes in the business. The revised version appears following this plan.
EXECUTIVE SUMMARYDynamic Video (DV) is a partnership of three people who produce and distribute videotapes that teach about issues of concern to youth and are marketed primarily to schools. In our first year of operation, we demonstrated the beginnings of a unique and profitable way of marketing our video on sexual harassment within an educational resources industry seriously lacking in suitable materials. Dynamic Video handles three types of videotape products—
There is an almost unlimited supply of youth issues that DV can use now and in future years to fulfill our mission. Issues that educators have already said they would like DV to treat through the medium of video include—
Since we already have one product, our projected sales estimates are based on the sample of sales achieved early in 1994. Our $20,000 sales for 1994 will increase dramatically during 1995 as we complete our second and third sexual harassment videotapes. Because of the mix of the partners' skills, we are already able to produce videotapes inexpensively. We are confident that the cost will go down even further as we advance along the learning curve. With this factor in place, along with our commitment to serving youth and the schools, we believe we have a perfect platform to launch into the educational marketplace of the future. OUR MISSIONOur mission is to produce fine quality educational videotapes, dealing primarily with health and social issues, to serve the students and teachers of America's schools. OUR PRODUCTSexual harassment (SH) education: The beginning of our partnershipDynamic Video, a partnership of three people, produces and distributes videotapes that teach about issues of concern to children and youth and are marketed primarily in the schools. DV was launched one year ago with the purchase of the "Compliance with Sexual Harassment Laws: A Matter of Respect" video script. The script was written by a group of local educators, had been critiqued by professional film producers, and received excellent reviews. D V bought the script in June 1993 and produced the video in the fall and winter, utilizing the talents of students and staff from several school districts as talent. "A Matter of Respect" went on the market to Minnesota schools in February 1994. Our Initial SuccessSo far "A Matter of Respect" shows considerable promise as a money maker:
Note: Instructional Videos, Inc., a videotape supplier for librarians, prints a catalogue advertising the videos of 500 distributors nationwide. Pricing: This year's catalogue includes six (6) SH education videos; price range $19.95 to $199; "A Matter of Respect" is moderately priced at $99 plus $1.50 for shipping.
Initial Sales of "A Matter of Respect" — 9/1/93-9/10/94 Making the Case: More Sexual Harassment Videotapes!Encouraged by what we have learned about the educational resources industry, DV plans to least two more videos about sexual harassment over the course of the next two years. This section outlines our reasons, addressing the following points:
Sexual harassment among students of all ages has reached alarming proportions in the schools. The use of vulgar language and sexual reference is rampant. Harassing remarks are even printed on clothes. In many schools, harassment happens so often it becomes disruptive to the learning environment. A June 1993 report based on a nationwide study by the American Association of University Women Educational Foundation found that—
In 1989, our state became the first state in the nation to require sexual harassment policies in the schools, ruling that federal law prohibiting discrimination in the schools on the basis of sex applies to sexual harassment as well. Legislation was passed requiring 400 school districts in this state to put SH policies in place by 1991 and inform staff and students about the policies. Meanwhile several highly-publicized cases at the national level—such as the Anita Hill hearings—have fostered a rising SH consciousness throughout the country. Other states are pushing for legislation similar to ours. Educators are also taking a new look at existing state and federal anti-discrimination laws such as Title IX or Wisconsin Statute 118.13, which prohibits discrimination in the schools based on sex, race, religion, disability, etc., to see how they can be used to combat harassment in the schools. All over the country, schools are seeking resources to help educate young people about sexual harassment. So far they are finding very few. Although workplace-oriented resources for adults do exist, before "A Matter of Respect" there was almost nothing on the market suitable for use with youth in the schools. In most states, education about SH started with junior and senior high school students. However, beginning in 1994, the emphasis is on reaching young children in elementary grades. DV has already received inquiries from educators seeking SH videos for use in elementary classrooms. Teachers see a need to move early to counteract the negative gender messages children pick up from the surrounding culture and begin to foster healthy, respectful attitudes. OUR TARGET MARKETDV's primary target customers through the end of 1996 are the public school districts of Minnesota, Wisconsin and California. Following is the list of products we offer to our customers: Sexual Harassment Videos in DV's Works
Sales Projections for Sexual HarassmentNew sales projections for the SH education tapes presently in the works (these figures do not reflect sales before 8/1/94). August 1, 1994 thru December 31, 1996
The projections listed above are based upon the following marketing plan components: Minnesota Marketing Plan Pertinent Percentages
Assumptions for Wisconsin and California
Within the schools themselves, SH education resources are purchased with money from several different sources: Which Pot the Money Comes From & When the Cash Comes In
Orders for DV's first tape, "A Matter of Respect" came from faculty and staff from a variety of departments within the schools: Who Is Using Our SH Videotapes
DV Sexual Harassment Videos: The Details1. "A Matter of Respect" for Minnesota. Our experience with preliminary marketing of our first proprietary videotape, has left us feeling confident about our product. "Respect" in spite of its flaws, is a valuable resource, one of few on the national market which meet the needs of America's secondary schools. We believe our marketing plan should generate sales to more than half the school districts in Minnesota. During the four-month period from September-December 1994, it is the goal of the DV marketing team to have personally contacted every school district in the state and received a yes or no answer. 2. "Respect" Across the Nation. Nationwide there is unquestionably a rising consciousness on the subject of sexual harassment. It is creating a good market for our videotapes, one that we believe will last for at least two years. In fact, a national distributor of educational videotapes called D V to express an interest in distributing the national version of "A Matter of Respect." For this reason, while we do have plans to expand our video catalogue to include other topics, our main emphasis will be SH through most of 1996. Note: There are about 16,000 school districts across the nation. Presently we are expanding our market research to California and Wisconsin. California enacted an SH education statute Similar to Minnesota's in 1992. Here is also a push for special legislation. Until it succeeds, Equity Team officials at the Department of Public Instruction are encouraging schools to use existing anti-discrimination legislation to enforce SH policies in the schools. We plan to revise "Respect" for the national market in spring and summer of 1995, beginning our national marketing campaign with Wisconsin and California. We have set a high sales goal of 2/3 of the market because we are one of the first—if not the very first—resources of our type to hit these state markets. We also believe this issue will continue to gain importance during the next year. 3. "Respect"-It's Elementary. Already DV has received requests for a SH video for elementary-age students. To our knowledge, there is as yet nothing available to fill this need. DV is eager to take advantage of this prime market. We have two elementary videos (to be sold as a set) already in the works. The elementary videos are scheduled to hit the market in early spring of 1995. Beginning with Minnesota, Wisconsin and California, our two-year sales goal is about 2,000 videotapes sets for the three states combined. Ongoing research from now through the end of 1996 will point DV in the direction of other states and schools standing in need of our SH products. Down the Road: Future Topics for Proprietary VideotapesAlthough sexual harassment is a "hot" issue in schools across the nation right now, DV recognizes that the market for SH resources in finite. There is, however, a practically unlimited supply of youth and children's issues that DV can use now and in future years to fulfill our mission-albeit not always with the luxury of laws to stimulate our market. Other issues that educators have already said they would like DV to treat through the medium of video are the following:
Here are some other issues that are hot in the schools right now and that would lend themselves to video:
Not Just for Ourselves: Contract Production JobsDV handles three types of videotape products:
The preceding section detailed the proprietary component. This section describes contract-type videos that are already—or almost—in the works. Contract videos in the works:
Non-Proprietary VideotapesPotential to date: 2 contracts DV has been approached by two different companies with requests to distribute their educational videotapes. DV is investigating this apparent demand for a local videotape distributor. THE INDUSTRY AND ITS HISTORYSince videotape was first introduced in the 1950s, it has been perceived as "flipping through society with hurricane force, uprooting conventional ways and sweeping aside anyone who resists" (Charlene Canape, /fow to Capitalize on the Video Revolution). Initially used only for broadcast television, professional videography equipment dropped dramatically in price in the 1980s, making videos a practical alternative for everything from resumes to fund drives. Its relative cheapness compared to film gave rise to a bumper crop of video entrepreneurs and made visual recordings accessible to the average person in the street. According to an advertising publication of Karol Media, a Pennsylvania videotape distribution company, the home video industry "had dramatic effects on the information and education business … Schools and organizations … that never owned 16mm projectors now own VCRs." Karol goes on, "The strongest audience remains the schools, particularly grades 6 through 12. And what an audience! The needs of our beleaguered schools have been widely publicized. They are eager for the right materials … Curriculum tie-ins, teacher-led discussion, follow-up activity, take-away literature, all are possible." Video is a natural medium for teaching. As an audiovisual tool, it is instantly absorbable by today's generation, young people who "cut their teeth" on television and live and breathe it every day. Because videos can be produced so cheaply, they make excellent "how-to" demonstrators for everything from cutting a square corner to learning to speak in public. Video is especially useful at depicting interactions between people-for example, to illustrate incidence of sexual harassment, or to show effective responses students can make to harassment. In the schools, a videotape ensures a consistent message from class to class and can serve as an excellent springboard for discussion. A video reaches its maximum potential if its demonstrations are followed up with practice and role playing among members of the audience, turning a passive learning experience into an active one. Companies such as Beckley-Cardy, which specialize in supplying educational resources to the schools, now have burgeoning catalogues of videotapes for use in the classroom. For example, Beckley-Cardy's catalogue includes listings for hundreds of videos for use in the various academic subject areas and for teaching about values, self esteem, and interpersonal relationships. Although the issues of concern to educators come and go with the seasons, the reliance on audiovisual resources like video to bring those issues to life in the classroom is here to stay. OUR COMPETITORSToday there are 12 educational videotape producers in this state and more than 1,000 producers and/or distributors throughout the nation. Some of the major suppliers distribute products for three or four academic areas only. In addition to videos and films, these companies deal in print materials, equipment and a wide assortment of "manipulatives" (everything from math counters to CPR dummies). Listed below is some of what DV learned by talking with people representing these supply companies: Beckley-CardyNational supplier of teaching resources, including the videos of United Learning Videos (see below);
United Learning Videos
Educational Videos Group
Instructional Videos, Inc.
Cambridge Educational Videos
Master Video
DV's conversations with suppliers reinforced some of our beliefs about our business's potential. We are encouraged, for example, to learn that—
On the other hand, it is clear that—The challenge lies with the marketing and distribution.Being able to produce good videos and being able to sell enough good videos to put lots of money in one's pocket are two very different skills. Our impression is that it is rare to find a company with the talents and the time to do both well. A representative of Karol Media told DV that we should figure on spending between $6-$12 on marketing for each dollar spent in production. It is hard for us to see right now where that kind of money would come from. However, we take this remark as a word to the wise. It presents an image of the vastness of the American market and the challenge of communicating with the busy hoard of strangers out there who will someday be our customers. THE PARTNERSHIPThe Partners—in Brief. Dynamic Video is a partnership formed in June 1993 by Andrea Sheldon and Dedria Johnson for the purpose of producing the "A Matter of Respect" videotape. For the first year, DV operated out of Dedria Johnson's office in her home. This spring the original partners recognized that the business is at a crossroads. It needs to expand in order to realize its potential. They invited Kevin Hill, an accountant with experience in business, to join the partnership. Here are a few facts about each of the partners:
Since Kevin came on board, DV has concentrated on finding an office, creating a business plan, and setting up an accounting system. Presently we are undergoing management education counseling with representatives from both the Small Business Development Center and the Business Incubation Center. Plans and PersonnelPresently we are applying for an office in the Business Incubation Center. After we get our office—probably sometime during September—we expect to serve the partnership as follows for the first six months:
Marketing PlanGeneral Strategy
Selected Details of Marketing PlanEvery sale will include a personal request for an evaluation of the product by the User Teacher and, if possible, the students who viewed the video. Each partner will contribute to the following phases of the process:
This evaluation and sales data will enable the marketing team to produce a mailing list and labels for future marketing efforts. PersonnelWe pian to hire a shipping clerk/secretary in November 1994 for 10 hours per week, increasing the hours to 40/week beginning in January 1995. An assistant to the script writer will also be hired in January, initially for 10 hours per week. Although we expect to increase the size of our organization to include at least two employees, we want to retain our partnership vision of a personalized operation that relies on involvement of all partners in each stage of the process, most especially the video production portion. We are committed to maintaining our direct involvement with the public schools in order to "keep our finger on the pulse" of youth issues and to remind ourselves that education is above all a human endeavor. Teachers as AuthorsAs was stated before, our plans for sexual harassment tapes over the upcoming 28 months include a set of two tapes directed at elementary students and arevised version of "A Matter of Respect" which will be generalized for the national market. Right now we are in the scriptwriting process for the elementary videotapes. An Authors Group of six teachers meets with us weekly on Thursday mornings for a scripting session over brunch. It looks as if this production will include original music, dances and a charming child narrator. The message will work off the theme, 'Together boys and girls can make a better, more peaceful world." One of the tasks of this Authors Group is to define the financial terms for the members' contract with DV. Our intent is to develop a policy which we will use for subsequent videotapes. This contract is still under discussion. THE CHALLENGESAlthough we believe we have many things going for us, DV also faces some real challenges:
WHY WE CAN SUCCEEDAs DV tackles the difficult youth issues of the day, we also take on two other challenges: first, a changeable market and, second, major competitors who are well-established and well financed and who, like us, market primarily to the schools. We believe DV has the following advantages:
Creating school/business partnerships is a major focus within the schools these days, not only in Minnesota, but in Wisconsin and other states as well. Such partnerships benefit students, who learn real-world skills and get the jump on an increasingly difficult job market. Over the long run, partnerships benefit business and industry by helping to produce qualified workers. In the case of a small organization like DV, we would benefit by increased visibility within the schools and also by getting some real, useful help from the "awesome" talent that exists in the schools. One idea we have is to enlist the help of the DEC A Club in marketing our videotapes in Wisconsin. This club achieves state and national recognition each year for its outstanding individual and team marketing projects. DV would be fortunate to have DECA's assistance and would be glad to provide learning opportunities to students; 11. Since the market for DV videotapes is the schools, our product is not location sensitive. Videos can be inexpensively mailed to any place in the nation and do not require a retail outlet. In addition, since we do not rely on walk-in customers, we can exist comfortably within a "scaled-down" office environment. Student Editorial BoardOnce a script has been developed and written, it will be reviewed by an Editorial Board comprised of selected students of various ages and backgrounds. To fulfill our mission statement of producing "fine-quality educational videotapes," the script must appeal to our student audience and it must be believable. To achieve this objective, DV needs the input of this valuable board. They will critique the script for its authenticity, effectiveness and "classiness." OUR PROFESSIONAL RESOURCESThanks to our counselors at the Small Business Development Center (SBDC) and the Business Incubation Center (BIC), we are getting a glimpse of the amount of labor involved in setting up a successful business. In spite of that, we remain optimistic about our enterprise. For one thing, we are encouraged by what we have learned about our industry and about each other as people and as colleagues. In addition, we have discovered a wealth of resource persons to aid us in our venture. Besides the SBDC counselors and the BIC, these include an Equity Team Member from the Wisconsin Department of Public Instruction and her Minnesota counterpart; an attorney from the School District of Superior; a CPA volunteer consultant; a volunteer attorney consultant; a professional writer and producer; and school faculty and staff too numerous to mention. We include in that list our bankers, with whom we each separately have good financial relationships, and, last but not least, the talented students in our schools. We also appreciate the fact that the business development climate is positive in our County and that the timing is opportune. Many agencies and individuals stand poised to assist us in the interest of fostering the economic well-being of our community. Finally, we partners of DV sincerely value the opportunity to contribute to that economic well-being by putting forth our best combined professional effort. OUR FINANCIAL PLANDynamic Video Projected Income Statement
Dynamic Video Projected Cash Flow
The Projected Cash Flow Budget and Income Statement are based on the following assumptions: Cash ReceiptsOur estimates of total units sold are based on records of our sales during the last quarter of 1993 and early 1994. Of the 400 districts in Minnesota, we have found that 80% (320) will accept a preview of our tape. Of those previews, 64% (205) will subsequently purchase the tape. We use this formula in determining the market for our other tapes, also. 1. Cash receipts for the Minnesota "A Matter of Respect" are estimated as follows: Projected total units: 205 @$100.50=$20,603. We do not expect substantial sales beyond June 1995 as all districts will have been covered by this time. These estimates are based on the telephoning done in Spring 94, as well as in July and August to promote the tape. Individual school payment cycles vary, but this assumes approximately 60 days turnaround on the sale. During August, Human Rights Officers (our targets) return to school. We expect most of the cash from this tape to be received by June 95. 2. Cash receipts for the Metro Area Community Center as follows:
3. Cash receipts for Elementary Tape sold in Minnesota Telephone calls in August and September 94, and brochures sent in September will stimulate sales. Pre-production cash receipts are estimated at 13 tapes each in October, November and December. At $75 per unit, the cash receipts for the last quarter of 94 are $2,925. The balance of the cash receipts for this tape will be in Spring and Fall 95. We expect this to be 217 units during 1995. Total revenue for this tape is expected to be $ 19,200. 4. Cash receipts for Elementary Tape to be sold in Wisconsin and California Similar to the Minnesota Elementary Tape, telephone calls and brochures mailed to Wisconsin in October will attract pre-production cash receipts estimated at 7 units at $75 for each of October, November and December 94. Total revenue for Wisconsin Elementary tape sales is expected to be $20,550. The Elementary Tape is expected to produce $48,000 in California during 1995 and 1996. 5. Cash receipts for National "A Matter of Respect" to be sold in Wisconsin and California Following the pattern of soliciting pre-production deposits, this tape is expected to gather cash for October through December at 7 units per months in Wisconsin. This tape retails for $99 plus $1.50 shipping and handling, and will sell throughout 1995 as well as 1996. Total revenue for Wisconsin is expected to be $27,537. We will begin marketing tapes in the one thousand California school districts in spring 1995, and will sell through 1996.
Disbursements1. During 1994, the partners will withdraw minimum amounts from the business. Dedria will receive 50 percent of the amount designated for draws: Kevin and Andrea will each receive 25 percent of the designated amount. In 1995 and 1996, each partner will receive one-third of the $57,600 designated for draws each year. Video equipment rental will be paid to Andrea at the rate of $50 per month. This will provide for us the use of her equipment for copying and editing of the tapes. Payments to each of the six writers' are calculated at the rate of $ 1.13 per tape sold up to a maximum of 500 tapes. Writers will be paid quarterly beginning in September, 1995. This agreement applies to the Minnesota elementary tape and serves as a model for future agreements with outside script writers. We plan to hire a Shipping Clerk/Receptionist in November 1994 for ten hours per week at the rate of $5.00 per hour. Hours will be increased to 40 hours per week in 1995. The Assistant Script Writer will be hired at $8.00 per hour for ten hours per week. Summary of Tape Labor/Production CostsLabor Production Costs: 1994
Labor Production Costs: 1995
Elementary Tape
Jackson Community Center Tape
National "A Matter of Respect" Tape
Projected Balance Sheet
Additional Information about the Projected Balance Sheet
Each partner will receive one-third of the profits over the lifetime of the partnership; however, in 1994, Dedria Johnson will receive 50 percent of dolls designated for draws since she is devoting a greater amount of her time to the start-up of the business. APPENDICESJob Description: Andrea Sheldon
Job Description: Dedria Johnson
Job Description: Kevin Hill
Articles of Co-PartnershipThis Contract made and entered into this first day of June, 1994, between Andrea Sheldon of Lake Neawtawaka, Wisconsin, Dedria Johnson of Upper Sentinel, Wisconsin, and Kevin Hill of Brendan, Minnesota. Witnesseth: Two. The business of the partnership shall be conducted under the name of Dynamic Video, currently at 123 North Main Street, Northville, Wisconsin. Three. The partnership shall begin on June 1, 1994, and shall continue for an indefinite period. Four. Each partner shall contribute to the capital of the partnership the sum of ninety-eight dollars ($98.00). This sum shall be without interest. Five. All profits resulting from the business shall be divided equally between the partners and all losses incurred by the business also shall be borne equally by them. Six. Proper books of account shall be kept of all transactions relating to the business of the partnership. At the end of each calendar year, a statement of the business made; the books closed; and the account of each partner credited or debited, as the case may be, with his proportionate share of the net income of loss. A statement of the business may be made to such other times as the partners agree on. Seven. Each month, each partner may withdraw from the business, for his own use, a sum not exceeding the amounts listed below:
The distribution of additional profits will be determined as the need arises. Eight. All three partners must agree on major purchases, contracts, hiring/firing employees. Nine. At the termination of this partnership, a full inventory and balance sheet shall be prepared; the debts of the business shall be discharged; and all property then remaining shall be divided equally between the partners. Ten. During the operations of this partnership, no partner is to become surety or bondsman for anyone without the written consent of the other partners. Eleven. No partner is to withdraw assets in excess of his salary, any part of the assets invested, or assets in anticipation of net income to be earned, without the written consent of the other partners. Twelve. In the case of the death or the legal disability of any partner, the other partners will continue the operations of the business until the close of the annual fiscal period on the following December 31. At that time the continuing partners are to be given an option to buy the interest of the departed partner at not more than the departed partner's proprietary interest as shown by the balance of his capital account after the books are closed on December 31. This purchase price is to be paid in four equal installments, payable quarterly. In Witness Whereof, the parties have hereunto set their hands and seals on the day and year above written. |
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Cite this article
"Media Producer." Business Plans Handbook. 2005. Encyclopedia.com. 1 Jun. 2012 <http://www.encyclopedia.com>. "Media Producer." Business Plans Handbook. 2005. Encyclopedia.com. (June 1, 2012). http://www.encyclopedia.com/doc/1G2-3439800014.html "Media Producer." Business Plans Handbook. 2005. Retrieved June 01, 2012 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3439800014.html |
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Media Producer
Media ProducerBUSINESS PLAN SHALIMAR FILMS, LTD. 805 Sugarbush Ln. March 1995 This plan for a television and entertainment programming company demonstrates how partnerships with others in the field can help ensure success in this rapidly moving industry. Coverage includes financing, products, marketing, facilities, management, and other elements of a well-developed plan.
EXECUTIVE SUMMARYOverviewIn the rapidly expanding market for home entertainment, quality programming is a valuable commodity. Shalimar Films, Ltd. was formed to produce a broad range of proprietary new products for the Television and Home Entertainment industry. The company is now applying their resources to building a successful television production enterprise based in Pennsylvania. The General Partners of Shalimar Films have earned a solid reputation in the film and video production industry. Major distributors and program buyers, including but not limited to: Capital Cities/ABC, Time-Life Video, Wood Knapp & Company, QVC, Columbia House, Unapix Entertainment, Doubleday, Book of the Month Club, Saturday Matinee, Library Video, Rivertown Trading, Pentrex Publishing, Baker & Taylor, Ingram, Time Warner, Borders Books, The Learning Smith, Trans world, Music, ATA Trading Corp., and PB S Home Video are marketing and distributing programs produced by Shalimar Films. Shalimar Films has consistently received favorable reviews for their products from national, regional, and local media such as Entertainment Weekly, Video Business, Video Librarian, Billboard Magazine, The Dolans'—Straight Talk on Your Money, Inventor's Digest, Entrepreneur Magazine, Knight Ridder Newspaper Syndicate, and Newsday. Programs produced by Shalimar Films have also been featured on national television programs such as The Joan Rivers Show and on Fox Television Network's national cable network, FX. With its highly qualified management team, marketing resources, and progressive business relationships, Shalimar Films is well-positioned to take full advantage of the industry's phenomenal on-going growth. In order to assure the success of their products Shalimar Films has prudently enlisted the resources and capabilities of major corporations, secured by contractual commitments, to market and distribute their programs to the worldwide marketplace. The proven track record of the industry, combined with its current evolution and strong positive forecast for future growth, offers significant potential for highly rewarding investment opportunities. The demonstrated expertise and entrepreneurial temperament of Shalimar Films provides an attractive opportunity for investors to profit from a truly innovative emerging growth company with tremendous potential. ConceptShalimar Films recently signed several pre-sale distribution and marketing contracts that guarantee distribution of their original programs to Home Entertainment and Television markets worldwide. These contracts have been signed with Capital Cities/ABC, Pentrex Publishing, Unapix Entertainment, Time-Life Video, and ATA Trading Corporation. The programs are based on a variety of popular, interesting, and entertaining topics. Each program is designed to capitalize on prevailing trends that have demonstrated commercial success within the industry. Negotiations are also in progress with Mega Books for a series of illustrated books based on our original children's television programming. These book versions will feature an audio cassette with narration, sound EFX, and original music in order to provide children with a more unique, entertaining, and interactive product that will enhance their learning experience and enjoyment. A diverse assortment of original television and home video programs will be developed and produced by Shalimar films in four (4) individual phases. Each phase will result in the completion and delivery of several commercially viable, revenue producing products for worldwide distribution. The diversity and quantity of programs produced in each phase will dramatically reduce risk typically associated with dependency on the success of just one program or genre. Shalimar Films plans to create a high yield "catalog of products" (consisting of a collection of successful "hit" programs proven to generate high revenues) by combining the most commercially successful programs from earlier phases with the development and production of commercially viable new products in each successive phase. Over a period of time, this "catalog" will primarily consist of the most highly profitable and successful products produced by the company. This approach will offer incredible long term profit potential to equity investors and partners. ProductionThe entire project, representative of all phases, consists of approximately ninety (90) original programs to be developed and completed over a period of approximately six (6) years. The first phase of the project requires production of approximately twelve (12) original programs over a period of approximately twelve (12) months at a total cost of $ 800,000. The second phase of the project requires production of approximately twenty (20) programs over a period of eighteen (18) months at a cost of $ 1,700,000. The third phase of the project requires production of approximately twenty-six (26) programs over a period of twenty-four (24) months at a cost of $2,225,000. The final phase of the project requires production of approximately thirty-two (32) programs over a period of thirty (30) months at a cost of $3,500,000. The company anticipates continued and successful growth well beyond these initial phases. New programs will be funded by "factoring" credit lines, income, and existing capital against distribution contracts for short periods of time. This will allow the company to develop new programming and ancillary products well into the future by continuously cycling cash flow and lines of credit. Highly successful programs will be produced as an on-going television or video series with advance funding provided by major distributors. Products developed in this manner will serve to provide Shalimar Films with properties (programs) that substantially increase the company's cash value while providing a significant source of additional revenue. The company will also continue to develop new programming in order to provide steady and equity growth in their "catalog." ObjectivesShalimar Films plans to produce interesting, entertaining, and educational programs on a variety of well-researched topics proven to be commercially viable in the industry. The company only produces those programs guaranteed distribution to a widespread audience through pre-sale contracts with Major Distributors. By spreading the product line across several different worldwide markets, and releasing them through multiple windows of distribution, the Company will effectively minimize risk and increase the potential success for each series of programs they produce. Approximately forty percent (40%) of the programs produced by Shalimar Films are targeted towards the children's television marketplace. Another forty percent (40%) focus on popular subject matter as is targeted for distribution via Broadcast Television and Cable. The remaining twenty percent (20%) of the Company's programming is a mix of special interest and home video programming targeted for distribution via direct to consumer markets as well as the retail and catalog trade. The management team of Shalimar Films plans to invest a substantial share of the actual cost for creative services as well as a smaller share of the cost for product development and production through reduced fees for creative services, professional services, and production services. The Company has also arranged for their distributors and suppliers to be solely responsible for specific costs as well. In most cases, these costs will include manufacturing, duplication, packaging, warehousing, fulfillment, public relations, advertising, promotion, marketing and distribution of programs developed, produced, and/or sourced by Shalimar Films. ManagementThe management team consists of the General Partners, a Board of Directors and a Board of Advisors with over seventy-five (75) years of combined experience in the industry. This experience consists of:
MarketingShalimar Films has a unique relationship with major distributors that provides an in-depth view of the market that informs our management decisions and focuses our creativity. By utilizing the distributors' extensive knowledge and resources, Shalimar Films is able to produce programs that meet consumer demands and have the pre-approved support of a major distribution network. The fundamental thrust of Shalimar Film's marketing strategy consists of producing only those programs that have already acquired pre-sale agreements, advance payments, and a commitment from distributors to utilize their resources for manufacturing, promotion, marketing and distribution. The reputation and proven ability of Shalimar Films and their management team plays a key role in securing these pre-sale distribution agreements from major distributors. Shalimar Films focuses on marketing their products through the largest and best suited distributors in the industry. These distributors not only have the advantage of substantial capital resources for funding promotion and advertising campaigns, but also have the ability to obtain better positioning and shelf space in catalogs and retail outlets. The original programs produced by Shalimar Films will be distributed through, but not limited to, Home Video, Retail Stores, Mass Merchants, Educational Institutions, Libraries, Catalogs, Direct to Consumer Sales, Direct Mail, Broadcast/Cable Television, Interactive Television, New Media Technologies, Laser Disc, and CD-ROM. DistributionShalimar Films will only produce programs that have received a solid pre-sale commitment through a signed licensing or distribution contract with a major label, studio, or distributor. A licensing contract commits the distributor to the marketing, distribution and sale of a specific series of programs being produced by the Company. A typical licensing contract warranties that the distributor will provide and pay for all packaging, duplication, warehousing, marketing, advertising, sales, shipping, collection, returns and all other costs related to the marketing, distribution, and sale of programs produced by Shalimar Films. Under this licensing contract, a percentage of all gross sales, referred to as a royalty payment, is earned by the Company. A licensing contract offers several advantages to the smaller independent producer, especially when a program is targeted to a large demographic audience or has widespread audience appeal. A major distributor has the ability to roll out a program on a national basis and feed the pipeline far more effectively and quickly than an independent producer. They also have the ability to promote, on a very large scale, consumer and trade awareness for the program. Additionally, certain classes of trade such as Rack Jobbers, Distribution Outlets, and larger Retailers are better served by a major label, studio or distributor. When a program is projected to have major potential and widespread appeal, a licensing contract is the preferred method of distribution used by the Company. In some cases, when it makes economic sense, Shalimar Films will sign a distribution agreement rather than a licensing contract. A distribution agreement tends to yield a much higher profit margin for the Company. The downside is that these agreements do not always provide the same level of marketing and sales support as a licensing contract. However this is not always the case and in some situations this approach is more viable than a licensing contract. Instances where this theory holds true is with programming sold through only one or two distributors that represent 75% plus of the entire marketplace for that specific genre of programming. Another case where distribution agreements are economically viable is when a program or genre is targeted to a specific class of trade. Certain accounts such as Catalogs, Direct to Consumer Marketing companies and certain Retailers are logical clients for direct sales by the Company. This approach requires a small but highly experienced inside sales staff and a promotional budget to market the programming effectively. Shalimar Films will be hiring such a staff to sell certain products on a distribution basis to these accounts. Under a distribution agreement Shalimar Films sells finished goods to the distributor earning an average profit of 100% to 300% per unit. For example, as part of a licensing deal with Sunshine Videos, Inc., Shalimar Films will produce several children's television programs scheduled for release and distribution in 1995. The first series of children's programs being produced are entitled: "Kids Pick-Up and Go—Video Travel for Children." These programs are pre-sold for distribution through Sunshine Videos, Inc. in the United States and Canada and Atlantis Exporting Corp. for overseas markets. This series of programs will generate royalty income for the company under an existing licensing contract with these distributors. Sunshine Videos, Inc. is a major player in the marketplace with considerable financial resources for marketing, promotion and advertising of television and video programs. The "Kids Pick-Up and Go—Video Travel for Children" is a timely original concept that is well positioned for significant success. Production is already underway and most of the preparation and pre-production work has already been completed by the Company. In another example, as part of a distribution deal with Pentrex Publishing, Shalimar Films produce several "Train Trax" video programs also scheduled for release and worldwide distribution in 1995. Pentrex Publishing dominates the "Train Trax" marketplace and is by far the largest distributor of Railroad Videos in the world. These ancillary programs are being produced in an exceptionally cost efficient manner. By exploiting the same footage shot during production of the first two (2) television episodes of "Kids Pick-Up and Go—Exploring Trains," the cost of completion and delivery of these "Train Trax" programs are dramatically reduced thereby substantially increasing profitability of this product line for the Company. Since we are manufacturing and delivering the completed "Train Trax" video programs to Pentrex Publishing under a direct marketing distribution agreement, the profit margin per video is significantly higher than with a licensing deal. The Company is selling these "Train Trax" video programs to Pentrex Publishing for $8.00 per unit. Since manufacturing costs are less than $2.00 per unit, the Company will realize a profit of over $6.00 for each unit sold. In addition, with many of the programs produced by the Company, ancillary products will be licensed or distributed through deals with book publishers, music & record companies, toy manufacturers, clothing manufacturers, and major corporations looking for a promotional tie-in with the television/video series. These contracts will provide additional income and increased consumer awareness through cross promotion and advertising. For example, Shalimar Films is currently in negotiation with Mega Books for an illustrated children's book based on "The Kids Pick-Up and Go Series" concept. This children's book series will include an audio cassette featuring narration, sound effects, and music from the television program to make the product more unique, fun, interactive, and profitable. Obviously, sales of "The Kids Pick-Up and Go Series" programs will benefit from the cross promotion of ancillary products that are being advertised and distributed in the marketplace. Additionally, with the funding from this offering, the Company plans to produce a variety of programs for major distributors such as Time-Life Video, Inc., Time Warner, A-Vision, Unapix Entertainment, Inc., Guthy Renker Corporation, National Syndication's, Inc. Media Syndication's Inc. and Mega Books. A substantial commitment of resources and a large financial investment are required by the distributor to manufacture, market, and distribute a new series of programs. Consequently, major distributors are not inclined to sign these types of distribution contracts without good reason. Distributors must have a firm belief that the Producer is reputable, and that the product is one that will meet with a reasonably large degree of success before signing a pre-sale contract. Shalimar Films, through their reputation, expertise, and creativity, meets the requirements of Major Distributors and have already successfully secured worldwide distribution contracts for several of their original television and home video programs. Products/Phase 1Shalimar Films will be producing several finished products that are pre-sold to major distributors. However, in order to protect the confidentiality of the company, the list of programs is not included in this plan. FinanceTo accomplish our goals, we have developed a comprehensive plan to intensify and accelerate the creative development, production, marketing and distribution of these programs. To begin the first phase of development, production, and delivery of our pre-sold programs to distributors, Shalimar Films requires immediate funding in the amount of $800,000. With realistic projections based on average industry performance, sales income would be generated within the first nine (9) months from capitalization of the company. The estimated average total return on investment for a typical program would range from a low of four-to-one to a high of twelve-to-one. Equity investors and partners will also benefit from the value being compounded in the "mutual fund" and the long term income from a highly successful or "hit" program. Return of the original capital investment should take a maximum of eighteen (18) months to twenty-four (24) months from the date of release for each program on an average case. FacilitiesThe management and directors of Shalimar Films have extensive practical experience in the production, marketing and distribution of television programs. Over the past 15 years, the Company's management has maintained the practice of utilizing outside facilities for the technical production of their programs. Technical production, for example, would include Principal Photography, Sound Recording, Computer Graphics, Editing, Audio Mixing and Post Production. In addition, a majority of production management services and creative services are being provided by the Company's management, directors, and in-house staff. Production management and creative services include program development, pre-production, production planning, project supervision, sales, marketing, public relations, legal and business affairs. By continuing this practice, Shalimar Films will be able to maintain a lower overhead while producing finished programs of the highest quality and commercial value. Shalimar Films will use outside services, freelance staff, and outside equipment rentals to reduce the Company's overheads, staffing, and office space requirements. During the creative development stages, very little production staff is required. By bringing in outside production companies and facilities when needed, a more cost efficient method of operation is realized. The Company's objective is to focus on a finished program's overall quality of presentation, information content, style, and format with commercial viability and the targeted audience being the principal determining factors. Elements of quality and style include, but are not limited to, nature of content and information, production values, and presentation format. Most important of all, the Company is committed to delivering commercially viable programming that meets the requirements of their distributors. Utilizing in-house staff for management, creative development, and production supervision, the Company is better able to control the finished quality of the programming they produce. Shalimar Films currently manages their operation with a full-time and part-time staff of five (5) people. The Company currently operates out of a 1000 square foot office located in Pittsburgh, PA. The Company directors' also maintain smaller offices located in Harrisburg and Philadelphia, PA. An independent sales office is located in New Mexico. With the realization of financing, the Company plans to move their operations into a larger office space in the PA area. The Company will increase staff to a total of twelve (12) people, including management and directors, and will consolidate their operations into approximately 3,400 to 3,800 square feet of office space. In addition, an off-line editing system will be purchased and utilized in-house to further improve cost control and finished program quality. Off-line editing is considered to be a key factor in reducing on-line editing costs at outside facilities. Overall, the experience and expertise of the Company's management team and their approach to structuring their organization, provides for a more streamlined, efficient, and effective operation. The practical experience of management provides for tighter controls over the cost of production and also results in a well planned strategy that is ultimately designed to be more lucrative and profitable. ConclusionThe management team of Shalimar Films enjoys an established track-record in the entertainment industry with past involvement in numerous programs for the Television and Home Entertainment markets, as well as music videos. In addition, Gerald M. Callens, one of the General Partners in Shalimar Films, was announced as the First Place Winner in Computing Industry Magazine's Best Business Awards Contest. The article on Shalimar Films is part of a feature cover story in the magazine's May 1995 issue. The experience and commitment of Shalimar Films, combined with the unique working relationships they have established with distributors, and their focus on developing only those programs with strong commercial potential, make this venture a solid opportunity for investors to become part of a winning team. Our distributor's expressions of satisfaction and encouragement are numerous, and we intend to expand our efforts upon funding. This is a major growth industry filled with exciting opportunities. Shalimar Films invites you to join them in their efforts and the rewards that they bring. THE GENERAL PARTNERSGerald M. Callens - PresidentGerald M. Callens - (Producer/Director/Writer) - has over 18 years of professional experience in the film and television industry. His expertise includes television program development, producing, writing, and directing. He has also gained valuable experience in advertising, public relations, marketing, and sales. Additionally, Mr. Callens has several engineering and technical achievements to his credit including the design and construction of several television studios, remote television broadcast units, and high end commercial audio/video installations utilizing unique and innovative original designs. René S. Porter - Vice President - Business & Legal AffairsRené S. Porter - (Business & Legal Affairs) - A former musician and artist, Mr. Porter is an entertainment attorney who established his private practice in 1987 to represent creative people and companies involved in entertainment, sports and the fine arts. His practice is the culmination of a varied career in law, writing, public speaking, academia, the arts, and politics. Sylvia A. Cole - Vice President - Program Development & AcquisitionsSylvia A. Cole - (Director/Writer) has 10 years of experience in the film and television industry. Her expertise includes television program development, screen writing, directing marketing and advertising. Additionally, Ms. Cole has had a number of stories and articles published in national and regional magazines. OverviewCallens, Porter, and Cole bring over 40 years of industry experience to the firm. The company also taps the skills of a large network of experts. These media specialists serve the needs of a varied client base. The General Partners of Shalimar Films have built a solid reputation and are well known for their impressive record and professional results. More recently, the Pittsburgh video company has focused on providing original television programming and software video products for Broadcast/Cable Television, Home Video Cassette, Interactive Television, Laser Disc, and CD-ROM. Its innovative programs help meet consumer demands for high-impact, high quality material. Through their alliances, Shalimar Films brings more than seventy-five years of experience to the management team. This background draws from specialties in television program development, artist management, business affairs, accounting, entertainment law, marketing, and distribution. Shalimar Films specifically targets the home video and broadcast television markets. In this area, the company is producing programs from Depace Productions, JRD Development Corporation, Wood Knapp & Company, Time-Life Video, Pentrex Publishing, ATA Trading Corporation, and Capital Cities/ABC Video Publishing. DIRECTORS AND ADVISORSPeter Gomez - Director - Marketing & SalesA 16-year veteran of the entertainment industry, Peter Gomez has spent the last ten years focused on the sales and marketing of prerecorded video cassettes, specifically concentrating on the Special-Interest programming segment. Peter is currently the Vice President, Consumer Products Division of one of the world's largest distributors of Television and Video programming. Peter holds a B.A. in Sociology from Long Island University. Peter brings us knowledge of the supply chain—from wholesale acquisitions through the distribution pipeline to the retail market. His experience in bringing programs to market is a source of essential information. Margaret Powell - Advisor - Marketing & SalesCurrently the Manager, Music & Video Marketing for Doubleday Book and Music Clubs, Margaret Powell is an entertainment software Direct Marketing specialist. Her creditials include five previous years in the video industry. Prior to entering the field, Margaret worked in Advertising and Marketing. She is currently completing an M.B.A. at New York University and holds a B.S. in Journalism from West Virginia University. Margaret brings with her a deep-seated knowledge of the complex world of direct marketing and catalog sales, a resource of insight into the rapidly expanding mail order industry, and its relationship to entertainment software. MARKET ANALYSISMarket EnvironmentThe entire telecommunications industry is exploding with new, highly advanced methods of television program distribution. CD-ROM, 3DO, CDI, Stragazer Systems, Full Service Networks, Interactive Cable, Multimedia, and On-Demand Television are joining a large and still growing cable and broadcast television base to create a home entertainment behemoth with an insatiable appetite for new, high-quality programming. Now, establishing an entity to produce this much-needed programming on modest budgets is a more attractive and viable proposition than ever before. Realizing the potential of this market, Shalimar Films has positioned itself to produce a variety of new programs in order to capitalize on this growing demand. CustomersThere are more than 92 million U.S. homes (98% of all homes) with television sets, about 65% of which have more than one set. It is estimated that more than 80% of these homes are also equipped with a VCR, and that more than 60% are linked with cable systems. The combined advertising revenues of broadcast and cable television exceeded $40 billion dollars in 1992. Conservative estimates suggest advertising revenues in the broadcast and cable television industry exceeding $50 billion in 1994. Home video consumer spending (for purchase and rental of video programming) reached over $12 billion in 1993. Industry reports project a nationwide market for home video products to be approximately $13.5 billion by the end of 1994 and projections estimate an increase to almost $18 billion per year by 1997. The average American home watches TV seven hours a day, according to Neilsen Media Research statistics for the 1991-1992 season. Add to this growing market the promise of new technologies and the demand for quality programming becomes practically unlimited. CompetitionWith the rise of new and fiercely competitive windows of distribution, program buyers are hard pressed to find quality products that they require to fill increasing demand. There is plenty of room for growth and expansion in the industry. Since the majority of its products are proprietary, competition is not seen as a major obstacle to the development and success of Shalimar Films and the products it will produce. The markets for our products are worldwide and include cable television, network television, independent stations, on-demand television, Pay-Per-View, videocassette, direct broadcast satellite, wireless cable, interactive television, CD-ROM, 3DO, CDI, laserdisc, optical media, and Video CD to name a few. Shalimar Films plans to optimize programming wherever possible to take maximum advantage of these windows of distribution. StrengthsA steady history of growth in the industry, the steady increase in consumer demand for home entertainment programming, and the promise of increasing growth for the future due to new windows of distribution are some of the industry's most promising features. This chart will help to illustrate the steady growth of the Television and Home Video markets. Market ForecastDirect Consumer Entertainment Expenditure
Advertising Revenue
BUDGET DETAILOriginal Television ProgrammingProduction BudgetOverview: Total estimated production budget for each phase of production—Original Television Programs Assumptions: Based on producing approximately ninety (90) Television Programs. Contributions are being made by Shalimar Films in the area of creative services and production services. Distributors will be making contributions in the areas of celebrity talent, manufacturing, packaging, promotion, advertising, and distribution services.
Cash Flow ProjectionsOverview: Average projected income from each individual phase of production-Original Television Programs Assumption: Shalimar Films, Ltd. will produce approximately ninety (90) Television Programs over a five year period on a guaranteed pre-sale basis. The projections illustrated represent total income over the average life cycle of a program. The return per program increases in each phase since production of programs that have proven successful are continued in the next phase.
Cash Flow ProjectionsOverview: Average projected income from all phases of production—Original Television Programs. Assumption: Shalimar Films will produce approximately ninety (90) Television Programs over a five year period. The projection illustrated here represent total average income over the average life cycle of a program.
CONCLUSIONS/SUMMARYThe television and home entertainment industry has a proven track record of phenomenal growth. Market demand is growing each and every day. People are hungry for entertainment and they are more than willing to pay for it. The explosive arrival of the VCR merely set the stage for the quantum leap in programming consumption that we will soon experience as the new technologies make our televisions an ever more important part of our daily lives. Shalimar Films understands that this is an opportunity of vast potential. We are positioned to take full advantage of the industry's on-going growth. The combined experience of the management team for Shalimar Films equals 75 years of providing quality entertainment and educational programming. This experience has taught us how to produce programming with an extremely high rate of efficiency and success. In addition, Shalimar Films enjoys key working relationships with some of the largest distributors for the home video and television markets. These relationships offer us information about market needs and trends that is factored into all our decisions regarding the development of new programming. Before we produce a program, we have a good indicator of how well it will be received. And we know the programs will be handled by organizations that will provide the most comprehensive distribution, marketing and promotion expertise in the industry. This offering has been structured in such a way as to provide the limited partners with the most attractive investment opportunity possible with the right of fist recoupment, a generous share of the profits and greatly reduced risks due to the number of projects; the tailoring of these projects to large, identifiable segments of the viewing public; and the assurance that pre-sale agreements are in place with major distributors before production begins. Enormous potential exists in this offering and the General Partners are fully committed to the task of transforming your investment dollars into a package of high-quality properties that will generate a substantial revenue stream for years to come. |
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Cite this article
"Media Producer." Business Plans Handbook. 2005. Encyclopedia.com. 1 Jun. 2012 <http://www.encyclopedia.com>. "Media Producer." Business Plans Handbook. 2005. Encyclopedia.com. (June 1, 2012). http://www.encyclopedia.com/doc/1G2-3439800016.html "Media Producer." Business Plans Handbook. 2005. Retrieved June 01, 2012 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3439800016.html |
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