Ben Scieszka â€“ Chief Executive Officer Josh Abueva - Vice President, Head of Finance Clement Ng - Head of Advertisment
Executive Summary Our product MyTV is designed to provide high definition videos of live streaming television to people around the world. It will provide convenience for customers in which they can watch their favorite TV channels anywhere in the world. All that is needed is a laptop or computer and an Internet connection. This will revolutionize the way people will watch television. More people will receive access to channels they desire and will be provided through a high-class quality website. No longer do expat families have to use a sling box to watch TV from their home country nor do businessmen have to constantly record their TV shows. With MyTV people can watch live television wherever and whenever they want. Itâ€™s your world and your way.
Table Of Contents 1. Executive Summary 2. Research Questions 3. The Business a) Description of business - the company’s background information and basic business concept. b) Analysis of business – SWOT Analysis c) Mission Statement d) Marketing – An industry overview, market analysis, and the marketing plan e) Competition – A description of competitors and of competitive advantage. f) Operating Procedures - processes in the business that result in the production and delivery of the product or service. g) Personnel - Organization chart, roles, and responsibilities for each position. 4. Financial Data a) Start Up Requirements and Expenses b) Break Even Analysis c) Income statement projections (profit & loss statements) d) Three-year summary e) Financial Analysis 5. Sample Print Ads and Websites
Research Questions 1. How are we going to get licensing from television companies? Well as a company we decided that it would be best to model after iTunes and how they sell their music, which is, that Apple keeps 28% and the artist and record label gets the rest. So we thought it would be easy just to do the same for online television. We would keep 28% for putting their channel online and then the channel keeps the rest so then we wonâ€™t need to pay for licensing and what not to use their programs online. 2. How much does HBO cost on Star hub? HBO costs $12.84 Sing per month for just the major channel of HBO, which was even higher than we had previously estimated. 3. How much does a website cost to start? For the websites we were looking into using, they cost $10.69 USD per year. 4. What kind of computers do we need to run our business? After researching we found a specific type of server that is used by You tube, they are called proxy servers. 5. How much do these computers cost? These servers cost approximately $77.07 USD each. Each server will probably last about five years 6. How many computers do we need? You tube has about one million eight hundred thousand of these servers across the globe. I believe that starting out we should probably get at least 5,000 to begin and then we can work our way up from there as our business expands. 7. How many employees do we need? Google currently has a range from 100-200 employees working in its largest info center in Oregon. We do not know exact numbers of employees because it is so restricted and protected. I think that starting out with about 25 well-trained professionals and two supervisors would work very well.
The Business a) Description of Business Our business idea is to create an online television service that travels with you wherever you go. You can choose from thousands of channels from across the world for an easy monthly payment that ranges based on the popularity of the channel. Also people with accounts can buy movies and set recordings so they don’t miss their favorite shows.
b) Analysis of Business Strengths
Potentially huge profit margin, recordable television, customers choose their shows, all online, travels with you, plenty of investors would be interested and it’s a live stream website.
High costs to begin with, certain channels may be expensive, require a computer and wi-fi.
Create an online giant that revolutionizes entertainment, search for possible trustworthy investors who could ease the process. Companies could take our idea and run with it, but we can keep that safe.
Threats SWOT Analysis -
How are we different? Customers would like our company, as we would provide channels from all over the world. They would also like our feature which records their TV program and save it onto the computer hard disk so they could watch it anytime they want without buying or streaming it from the internet. Strengths
Unlike you tube, our company provides fast streaming, high quality videos that would satisfy our customers. Being able to store the movie or TV program that they purchased on their own computer makes it personal, which is definitely what customers would like to have.
Weaknesses We won’t be starting off as big as Itunes or you tube. We would have to start from the bottom, as our company is still low key. People would tend to buy from Itunes instead as Itunes already has this level of confidence that they’ve established in people
c) Mission Statement To be able to provide channels for our customers as fast as we will be using proxy servers and providing all sorts of features that we have in our company. Our goal is to meet our customers need in bandwidth, amount of movies, having the channels they want, and to provide good service to them whenever needed.
d) Marketing Marketing Strategy a) Product i) ii)
Brand name- MyTV Features – MTV will provide high definition videos that stream live channels through a website. We will also provide our customers with the ability to record their favorite TV program and save it onto their profile on the website so they can watch it anytime they want without buying or streaming it from the internet. Benefit- The benefit being provided is the ability to view you favorite shows and movie anywhere in the world. You aren’t restricted to being in your living room. If you have Wi-Fi then you can connect to our website and watch your favorite shows. Level of Quality – Our Company will provide high definition videos that will greatly satisfy our customers. Customers will not need to wait for the videos to buffer. As for our website we will make our website look professional and very compatible and easy to use for customers. By offering a good looking website customers will have the impression that we offer high quality videos.
b) Price i)
We plan to price our channels to be cheaper than what a local cable station costs. In addition if customers want to record videos to save on their profile on the website, in won’t cost anything. Itunes on the other hand costs $7.50 for a single movie. Usually for local cable stations many people pay for a package of channels in which they don’t watch all channels however for our company we will let people pay for a package of channels however the difference is we will let them choose any channels they want. For customers who subscribe to the website for more than one year we will provide a 10% discount from the overall payment.
c) Place i)
We only plan to offer our service through the Internet, so we will not need any specific location to set up. We are not providing a tangible good; we are just providing a service through the Internet
d) Promotion i)
For advertising we plan to target two markets. One is for the businessmen or women who are constantly traveling. The other markets are the expat families who have moved away from their home country. The message we are trying to get across to them is that MyTV will provide any channel they desire from anywhere in the world. All that is needed is a laptop or computer and Internet connection. We want our slogan to say â€œYour channels, Your Wayâ€? For businessmen we plan to advertise in airports, airplanes, websites that provide news such as CNN and business week. As for expat families we plan to advertise in malls, theaters and magazines. This type of advertising is mainly targeted at the kids of the expat families. For promotional programs, we will have a lottery in which 500 customers will
receive free television for a whole year. To advertise our product we will provide print ads, promotions on the websites and commercials on the airplane video. Market Segmentation
Segment 1 i. Description Traveling businessmen, if they wish to view their favorite shows they can just use their laptop to view them. ii. What They Want? Since these businessmen are always traveling and away from home it is a hassle to always record their favorite television shows at home. As a result they want something in which they can view their favorite shows on their laptop or something more convenient in different countries around the world. TV will provide this since all these businessmen will need is Internet connection and a laptop to view their television shows. iii. How would they use this product? What is important to them about this product? Businessmen would use this product to view television shows from anywhere in the world. If a businessman is out of the country and wishes to view a show that is not televised in the country he is currently in, he can use TV to view that show. In addition this makes watching TV very convenient because if the businessman is busy with meetings and work he can record the television iv.
and just watch it during his free time. How to deliver the service to them? We plan to deliver our service through our online website. Once customers become members, all they have to do is login to the website and from their they will be provided with the television channels of their choice.
How/where to reach them with advertising? Since businessmen are constantly traveling we plan to advertise our service in the airport. In addition we want to advertise our service on the movies that are played during the in-flight entertainment. For example in Singapore Airlines, right before playing the movie we will advertise our service so the businessmen are exposed to the idea and service being offered. Price Sensitivity Even though most businessmen are financially stable, we feel that they will be fairly sensitive to a price change. These days television is not extremely popular among businessmen. They might watch some news channels, documentaries and even some movies. However if the price might be changed by just a little bit then they might not believe it is worth spending for.
Description Expat families- these are the families who have moved away from their home country and now live abroad. Most of the families in SAS are expat families. What they want? Expat families, who live abroad, wish to view television from their home country. Usually in a new country the local cable station will not televise all channels from their home country especially if it is an American family coming to an Asian country. As a result we will provide those families with channels that they desire How would they use this product? What is important to them about this product? These families would use this product as a source of entertainment. Many families have kids who would use the product to view their favorite shows from anywhere in the world. Also the parents could use it to view news channels. Also the whole family could watch television shows together. How/where to reach them with advertising? In order to reach the teens we can advertise our service on websites where they would go often. An example could be social networking sites such as facebook or myspace. Also we can advertise where teens would usually go with their friends such as the movie theaters and malls. To target the parents of expat families we can advertise our product on websites such as cnn.com and other news websites. We could also advertise from a different angle by showing our service is something where a family can get together and watch their favorite television shows. Price Sensitivity The price sensitivity of the expat family would be fairly sensitive. For teenagers, they might realize that the price may be too high and find another place to view television. For parents especially those 8 who work may realize the benefits are not greater than the costs of having online television and therefore stop paying for it.
e. Competition a. Our companyâ€™s market position is a challenger as well as a pioneer. We must challenge the giants of Slingbox, iTunes and Hulu, but we are pioneering in the fact that not only are we online but we also offer recordable television that will be saved to your account and choose your own channels that you want on your account. Also, we combine the ability to watch shows from different countries without needing to pay for a box that stays in your country of choice and the ability to purchase movies online that you can copy to your hardware. b. Our strengths are the facts that we have a combination of everything anyone could want on television that is online. None of our competitors can boast everything that we offer on one website. We give the viewer the ability to choose each channel they want to pay for, they can pause, replay and record shows, purchase movies online and log-in anywhere in the world to connect to your personalized set of shows. c. Our weaknesses are the facts that we are a company that is just starting out and we have high costs to begin. Also we are going to need hundreds of thousands of servers to run our business because it is so complex. Also you require a computer and Internet access to connect to our webpage. d. Our pricing will be based on a per monthly cost and it will be based on how much the channels wish to sell their channels for and we will simply add 28% to that price because we are the ones broadcasting for them. Then we never need to pay for licensing and the channel is happy as well because they are receiving the majority of the profits.
-Choose your channel -Recordable t.v. -Purchase movies online -Login anywhere in the world
-Young business -Require hundreds of thousands of servers that havenâ€™t been bought
-Based on what channels are willing to put their channel at per month -add 28% for our profit
-Established business known worldwide -Login anywhere in the world
-Require a Slingbox connected to a television -Slingboxâ€™s are expensive
-Approx $200 for Slingbox -Require someone to pay for the television channels
-Free television shows -Plenty of advertising
-Only have television shows -Rely on advertising for revenue
-Leader in music and movies
-Experience -Well-known -Established system -Growing
-Expensive -Only offer music, movies, and shows
Competitive Advantage Use of Price- Prices for channels would aim to be cheaper than what people pay for cable on television. Also for example, for cable in Singapore, people buy channels in packages however they may not like all channels. For our website we will let people select a package of channels in which the person is interested in all channels. Therefore paying the package price but at the same time liking all channels Quality- High definition videos. In most online TV websites they are usually free but provide very bad quality videos. Our website will provide high quality video in which people can view shows at full screen. Technological Aspects- Usually when viewing videos on the Internet they have to wait for the buffering and loading of the video. This online television will provide live streaming so customers donâ€™t have to wait for videos to buffer. The site will also provide channels from anywhere in the world in which no other television cable or online site provides. Unlike the slingbox, our website will not require any machine or have to know anyone in the country the person is getting television from. Unlike Itunes it provides a wider range of channels and more diversity. Convenience of Use- Since it is a website, customers can use it on any computer anywhere in the world. All they would need is a computer and Internet access. There is a chance that we can partner with the iphone so it will be the sole provider for TV on the iphone. Packaging- the website interface will be stylish, elegant and attractive. Make it look more high class, which provides customers the idea that it is high quality. Reputation- Since we are just starting out it is not very known. However through advertisement and possible partnering with big companies like apple then we can gain credibility.
f. Operating Procedures Month 1
Search for Computer Specialists Select Location Select Proxy Servers Meet Lawyer Meet Consultant Search for Financial Specialist Web Site Design Meet with Channel Representatives Meet with airlines Database setup Befriend banker Phone System Blog System Register Business Meet with Ad Agency
g. Personnel Chart Ben Scieszka President
Chief of Technology
4. Financial Data a. Start Up Requirements and Expenses Warehouse Rent - $1,419.61 Servers – 25,000 at $77.07 each Website Name cost- $10.69 a year Employees- 25 needed, will receive .01% of total revenue Supervisors- 2 needed, will .011% of total revenue b. Break Even Analysis Fixed Cost - $161,983 Variable Cost (Per Unit) – $8.93 Unit Price- $10 $161,983/ (10-8.93) = 151385.9813 Average Customer will buy 3 channels 151385.9813/3= 50462 customers c. Forecast Let’s go to the large end of the spectrum to start out. How many computers do you believe there are in the world? Well after some research there are probably 900 million to a billion computers in the world. But of course there is more than one computer in many households. So then you can estimate that let’s say that there are 600 million households with computers in the world. For our business, these are obviously our targets seen as how our business is based around the Internet. But for us to make a reasonable estimate we should relate our forecast to one of our established competitors, for example, iTunes who has approximately 125 million users on its database, according to the New York Times. Our estimate is that in our first year, we will hope to get about 1 percent of that number after advertising and promotions. This will give us a rough estimate of 1 million 250 thousand customers in our first year which would be a huge boost for our business. With channels ranging from $5 to $10 it is difficult to make an estimate, but we believe that many of the users will purchase the more expensive channels such as ESPN or Comedy Central or even FOX. We can estimate that most customers with many buying more and many buying less will probably purchase three channels, but a reasonable average seems to be at about three channels. In the first few months business will be slow but we will probably have a curve that is somewhat exponential because then our website will spread and expand as the word of our business reaches the world. Our estimate of total customers over the twelve months should look a little something like this: 10,000; 25,000; 50,000; 100,000; 150,000; 215,000; 350,000; 470,000; 620,000; 800,000; 1,000,000; 1,250,000. We estimate that approximately each customer will spend about $24 a month, which gives us our total revenue per month as: $240,000; $600,000; $1,200,000; $2,400,000; $3,600,000; $5,160,000; $8,400,000; $11,280,000; $14,880,000; $19,200,000; $24,000,000; $30,000,000. Clearly with only one percent of the total number of customers iTunes has we could quickly become a huge online force. Some things that could go wrong include our website shutting down due to lack of servers which would ruin our name in the business and local communities.
e. Financial Analysis
$12,000,000,000.00 $10,000,000,000.00 $8,000,000,000.00 Total Revenue $6,000,000,000.00
Gross Profit Net Profit
$4,000,000,000.00 $2,000,000,000.00 $Year 1
Break Even Chart $120,000,000.00 $100,000,000.00 $80,000,000.00 Fixed Cost
Variable Cost Revenue
$40,000,000.00 $20,000,000.00 $1
5. Sample Websites