Weeve - We events - The stage is yours

Inspiration and Business Goal

Artists struggle heavily under the lockdown due to the current Corona crisis, as many of them are losing their main income channel that is performing in front of a live audience.

The small part of well-known artists rely heavily on performing online via Facebook and Instagram live streams. This works great for scenarios where known artists stream to a large audience. All other artists are missing channels to reach their audience, that is usually of much smaller size. Therefore, most artists struggle to find new, digital ways to perform and get paid.

We are creating a platform that allows artists to perform live performances online in front of an audience that is limited to maximally 20 people. Compared to the large-audience streams as on Facebook, the consumers are in close contact to the artists as the limited size of the audience allows for direct interaction like talking to each other. Artiste, in return, are given a place where they can reach their audience and gain income by being paid for their performances.

The target group are any kind of performers like musicians, authors, comedians, but also self-employed workout and Yoga providers.

Market Size

In the European Union we have over 2 million artists and writers, with 48% of them being self-employed (as of 2018) [1]. Therefore, we have over 1 million artists and writers, with all of them not being able to perform in front of their usual audience these days.

We are assuming that half of the 1 million artists are in our target group. Since we are addressing a substantial need of the artists, their income, we are assuming that we can win over 20% of those targeted artists to perform on our platform 2 weeks after launch. This results in 100,000 artists performing on our platform in its early launch phase.

In turn, to estimate the number of customers that visit our site, we consider a factor of 10, compared to the number of active artists on our platform. This means that 1 million customers are visiting our website in the first two weeks after launch. As a rough estimate, we assume that 10% of them make daily visitors, being 100,000 unique visitors each day.

Marketing

Regarding marketing, it will be a challenge to address 1 million artists spread over 28 European countries with inhomogeneous target audiences. However, there already exist social platforms that target artists (and customers being interested in these artists) such as soundcloud.com which we can leverage. At many places, local governments or artists’ associations are open for new digital solutions to support their local artists, so that government officials can serve as multiplicators. Moreover, influencers can be won over by our basic social business aspect that is giving artists an income.

Another challenge will be to target the suitable audiences of our less-known artist groups. In daily life, the artists often rely on local marketing channels that cannot be used these days. One way to solve this problem is to proactively address different radio and TV channels to promote our service. Being backed by the European Commission will immensely increase our chances to be promoted over many stations. Local integration of the team members in research institutions will allow for further media. It will be crucial that we have the service completely online and running once this small time slot of radio/ TV promotions sets in. Furthermore, the artists themselves will see a high in promoting their own performances on our platform, which will serve as free marketing for our platform in total.

All of these marketing strategies would not impose any costs, although a huge timely effort that needs to be done by the team. We do not calculate with further marketing actions that would imply costs, as we assume to get a big viral marketing impact through the measures described above.

Competitors

Today, artists are using mainly Instagram and Facebook to stream their performances. They are successful in getting together many well-known artists with a large audience, so that it is not our goal to compete with them for this purpose. As described when analysing the market, however, Facebook and Instagram are not well suited to offer online performances for a small group of people. We are not aware of any other existing platform where less-known artists can host their performances and at the same time are paid for it.

Once our platform is successfully implemented, it will be crucial to set us apart from upcoming competitors that copy our idea. As mentioned in the previous section on marketing, getting started with our platform will rely on viral and good marketing in order to get a high number of artists to perform on our platform. If we fetch regular feedback from our customers, and do a good job in improving our platform to their wishes, we are optimistic that it will be possible to keep that high number of artists and customers on our platform, so that it will be hard for new players to get a critical mass of people on their platform.

Technology

We are providing a digital service on our platform. The technologies used therein are state-of-the-art, which lowers the barriers to set up and host our platform.

The novelty comes in through our business proposition - hosting performances to a limited amount of customers. This limitation sets us apart from existing streaming platforms for artists (especially Facebook and Instagram), as the limitation creates the unique possibility to create direct interaction with the artists. Another part which sets us apart from existing streaming platforms is that it is built with the possibility and purpose of allowing the artists to charge a fee for their attendees.

The technological parts can be split into four sub-groups:

platform to find events by customers,
platform to post events by artists,
hosting events,
billing events.

The first part will be built based on modern Javascript and CSS frameworks as frontend technology, which makes an easy way to create good looking frontends. On the backend part, we will use Java microservices, e.g. via the Spring Boot framework. These are the widely used technologies, which are perfectly supported regarding integration into cloud platforms. As an example, scaling our backend services (built in Java with Spring) with rising customer numbers can easily be achieved on all big cloud providers which offer Kubernetes or Cloud Foundry infrastructure. For frontend and backend, it will be easy to find good developers to implement our platform in a short time (two to four weeks) as we do not rely on any technological novelty here.

The look-and-feel of this first part will be close to what is known by Netflix. The reason is that Netflix (as a streaming provider for shows and movies) faces the issue to provide a good way for the customer to browse through many different genres of shows - a problem similar to finding interesting artists in a variety of different artistic genres.

The second part will rely on the same technologies as the first one, and therefore does not raise new difficulties.

For hosting events in part three, we are thinking of using a technology that is reminiscent of Zoom. Having a limited and small group of people, it is possible in Zoom to see the faces of all participants of the call/ stream via their webcam. Possibilities to digitally raise the hand, muting and unmuting the audience for getting audio interaction and chat interaction are other important aspects.

We will use Jitsi Meet as technological basis (see https://meet.jit.si/), which a technology very similar to Zoom, but free and open source (see https://github.com/jitsi/jitsi-meet, licensed by Apache-2.0 license allowing commercial use). Our work on the prototype during the hackathon shows us that it will be possible to set up Jitsi-sessions with the features described above on our own platform as a fully usable prototype in a week, in two weeks for running it with first real events as real-life tests.

The billing, which is part four, can be achieved by one of various external providers that offer such services. For a variable fee, billing can be fully integrated into platforms while security and regulatory aspects are fully covered by the external provider. As an example, Klarna (see klarna.com) charges 0.30 USD fixed fee plus up to 5.99% of transaction volume as variable fee.

To sum it up, we can set up and host our platform with existing and state-of-the-art technologies. What differentiates us from existing competitors is our business proposition - the technological aspects head towards providing a look-and-feel that people already know from other platforms instead of creating something that is technological novel. We can distance ourselves from upcoming new competitors (that possibly copy our business model) by gaining early and big traction of artists and customers (see more on that in our business plan), so that novel technologies will not be necessary.

Costs & Financial Forecast

Structure of the costs

Our costs are tripartite. On the one hand, we have technical costs which are split into two parts. On the other hand, we have costs for setting up and hosting the platform. Costs for marketing are not part of this business plan (see section on marketing above).

Following, we lay out the technical costs. First, the part where artists promote their content and users find artists to their liking. Here, we are talking about a standard website backed by Javascript, HTML and database - which does not impose huge technical costs. Taking into account our 100,000 daily unique visitors (see estimation above), and calculating costs of 0.01 Euros per unique visitor, this part makes 30,000 Euros per month.

Second, the part where the artists stream their content, imposes huge amounts of data, and therefore big costs. The costs are proportional to the number of performances and the length of each performance. We can cover the costs for this second part directly as a fee for each performance that is proportional to the length of the performance. We assume costs of 10 Euro per hour of streaming video to an audience of 20 people. Additional legal fees, e.g. for promoting music (like GEMA fees in Germany), are not yet considered and need to be clarified.

Putting it together, to cover our costs, our fee includes:

a fixed part to cover the first part of technical costs,
a part that is proportional to the length of the performance,
a fixed part to cover costs for people and revenue (not discussed yet).

Amount of the costs

Estimating 100,000 active artists on our platform, and assuming that on average they are hosting one event every week, we find 100,000 performances each week. The first part of the technical costs would therefore be covered by 30,000 / 100,000 = 0.30 Euros per performance.

For the third part, we are estimating the need of 5 full time developers and product managers to set up, improve and host the platform. Estimating a yearly income of 60,000 Euros per person, this makes 25,000 Euros of costs per month. Comparing it with 400,000 performances every month, a fee of 0.06 Euros per performance would cover these costs. Increasing this fee to 0.30 Euro per performance allows us to cover the set up costs of the platform inside one month, if we assume two weeks of work for the 5 people before platform launch. After this month, the additional 0.24 Euros would translate into 100,000 Euros of profit every month.

Total costs, fees and revenue

Adding the first and third part of costs, we have 0.60 Euros of costs, that we round up to 2 Euros. We have not yet covered the fee that the external billing provider will charge - we assume that these costs can be covered by half of the 1.40 Euro per event that we get by rounding up the costs, leaving 0.70 Euro revenue per event.

All in all, we charge the artists a fixed fee of 2 Euros per performance, plus a fee of 10 Euros/ hour depending on the length of the event (while having a minimal length of 30 minutes):

first part of technical costs: 0.30 Euros per performance
hosting the actual performance: 10 Euros/ hour of performance
people costs: 0.30 Euros per performance
billing provider and revenue: 1.40 Euros per performance

Our profit would be 0.70 Euro per performance, as included in point 4. For every additional performance (on top of the weekly target of 100.000) that we can host, our additional profit would be at least 0.60 Euros per performance (see points 1 and 3 in the list above). After the first month, we calculated another 0.24 Euros per performance as profit that comes out of the initial people costs (see above).

Assuming 100,000 performances every week, this would mean a weekly profit of 70,000 Euros in the first month after launch, and 94,000 Euros in the months after. Assuming 150,000 performances every week, this would mean a weekly profit of 135,000 Euros in the first month after launch, and 171,000 Euros in the months after.

Summary of financials

We are targeting a group of 2 million artists inside the European Union, presuming that we will have 100,000 of them using our service 2 weeks after launch. With fees of 2 Euro per performance plus 10 Euros per hour of performance, we can charge competitive prices that allow the artists to still earn a good income from their performances having audiences of up to 20 people. As an example, performing for one hour in front of a group of 20 people at a ticket price of 8 Euros leaves the artist with around 150 Euros; performing twice a week makes 1,200 Euros monthly income.

Marketing will be critical to address a critical mass of artists and customers to get the platform started quickly - this will be important to get the necessary traction for long-term success. If we manage to meet our KPIs stated above, we would set up a self-sustaining, profitable business.

The value of our solution after the crisis

As described in the last section, our solution heads towards setting up a profitable and self-sustaining business. A big novelty of our solution is that you can have intimate sessions with your favorite artists on our platform - for many artists, that is closer than so far possible in real life where it is hard to start a conversation or even meeting them. This point keeps on being an added value once the Corona crisis is over, so that we see a good chance for a profitable long-term business.

What have we done during the weekend

To put it short: we've covered all phases from identifying the actual problem up to building a working prototype and business plan.

We started with an extensive brainstorming session to reflect on who the stakeholders are, what problems they face and what possible solutions are. This was followed by identifying the biggest need (in the context of challenge number 3). On Saturday, we spent much time on improving the technical aspects of our prototype, as well as improving its fit to the actual problem we are solving. Sunday was focussed on finishing the prototype and writing up the textual description for our submission, as well as making the video.

Necessities to continue the project

We require funding for external developers and designers to finish the platform. While we can identify good channels for performing the marketing steps described above for our home countries, contacts and support for good points of contact in all other European countries would be of great help. In addition, legal council would be required to not run into legal issues with our solution.