1 / 29

Fat Beats, Inc.

Fat Beats, Inc. What is it?. History. Retail basement store open in 1994 Owned by Joseph Abajian (DJ, B-Boy, and producer DJ Jab) Fat Beats, Inc. Headquarters in Brooklyn “The Last Stop for Hip Hop” Niche DJ market. Vertical Integration. Production: Fat Beats Records

twila
Download Presentation

Fat Beats, Inc.

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Fat Beats, Inc.

  2. What is it?

  3. History • Retail basement store open in 1994 • Owned by Joseph Abajian (DJ, B-Boy, and producer DJ Jab) • Fat Beats, Inc. • Headquarters in Brooklyn • “The Last Stop for Hip Hop” • Niche DJ market

  4. Vertical Integration • Production: Fat Beats Records • Distribution: Fat Beats Distribution • “premier international independent distribution company specializing in vinyl” • Retail: Fat Beats and Fatbeats.com • “destined to corner the market in on-line hip hop sales”

  5. So, Fat Beats Can??? • Produce content • Distribute its content to retailers • Sells its content at its retail locations • Promote its artists through in-store signings/performances • Creates…??? • Synergy!!! Of its commodities by selling albums, CDs, tee shirts, DVDs • Who does this sound like???

  6. Production • “much attention from major labels eyeing Fat Beats as an A&R source in hopes of landing the next big artist”

  7. Distro • Opened in 1996 • worldwide clientele for wholesale and mail-order selections of various independent releases • Clients= “crucial mom & pop retailer or dj store” • “Independent record stores are vital to keeping this music we all love alive”

  8. Distro Cont’d • “Decidedly not a one stop”…? • “distributing and marketing” artists • $4M in distro sales in 2003

  9. Labels Distributed

  10. Retail • NYC • Los Angeles • Formerly • Amsterdam • Atlanta • Web

  11. Employees • “Fat Beats employees are likely to be top area DJs” • a “true representation” of the customer visiting the store

  12. Competition • Production • Distribution • Retail • “destined to corner the market in on-line hip hop sales”

  13. The Alliance • Newly formed alliances with companies such as Loud, Tommy Boy, Interscope, Caroline, and Koch • October 30, 2007 KOCH Entertainment Dist. signed an exclusive physical and digital distribution deal

  14. The Deal, YO! • “Fat Beats’ successful brand of true underground hip hop will further strengthen our status as the No. 1 physical and digital supplier of urban music”~Michael Rosenberg, President KED • “Over the years both companies have grown and come back full circle to work together again. Whereas Fat Beats once lent a hand in showing KOCH the hip hop scene, KOCH can now reciprocate and help Fat Beats artists…get into more markets”~DJ Eclipse, NYC Store Mgr/artist

  15. So, What’s Up??? • Matt, Fat Beats A&R: • “Unfortunately, we cannot release any confidential information about our company…” • “Sorry man, I can’t really help out” • Private Company!!! • Maybe, now major corporate interest= shhhhhhhhh

  16. KOCH Entertainment LP • “is vertically integrated and distributes its own content” • Music Distribution • Record labels/affiliated labels • Video distribution • Music Publishing • Michael KOCH/1987/ One of 6 “Indie” reps on RIAA

  17. KOCH Records • Rap and Children’s music • America’s largest independently distributed record company. • 1999, got its start distributing Death Row Records • Jim Jones A&R • WWE (F), Terror Squad, DJ Unk • $40-50M in revenues • 240 titles • #5 Rap Label, 5% market share for rap • .65% market shart

  18. KOCH Entertainment Dist. • Most $$$ “arm” • $175M in revenues (33%=digital sales) • 25,000 titles/280 labels • Ship, market, process music: • “gives us a higher degree of control” M.K. • May 2007, $6.5: • 2.7% market share • 3.3% • 2.6%

  19. Other Subsidiaries… • KOCH Vision • Distributes for 400 film companies • KOCH Music Publishing • 2,500 song catalog

  20. 2005, Row Entertainment (Entertainment One), buys KOCH for $80M • Canada’s largest video/music distributor • $700M Revenues in 2008 • Ships 30K-60K pieces a day • Publicly Traded on London AIM market • “expanding content exploitation”; “exploit cost synergies”; “capitalise on cost synergies”; and “consolidate geographic position”

  21. Publicly Traded on London AIM market • 1.3M public shares, 67.31% of stock is private • March 2007, Marwyn LLP buys Ent. One for $160M • Through Marwyn’s capital, Ent. One made many international film/music distro purchases

  22. London-based hedge fund • Specializes in…? • buyout • consolidation strategies • Incorporated in…? Cayman Islands • $2B in acquisitions in 3 years • 79% is privately held

  23. Diversification??? • hazardous waste plants • alcohol and drug abuse laboratories • global laboratories • online betting services • construction training • environmental safety consulting • snack foods industry

  24. Hedging???: • reducing the risk of loss through short-term investment in derivatives; that is, buy today and sell tomorrow for a profit. • Corporations and banks invest in derivatives to “hedge their position, essentially buying a kind of insurance” • Derivatives?: • offset “the risk involved in other securities position…” and “mitigate those losses by selling short” ~Marwyn

  25. January 22, 2009 • E1 Music= • KOCH Records • E1 Entertainment= • KOCH Ent. Dist. • E1 Music Publishing= • KOCH Music Pub • E1 Entertainment U.S. • KOCH Vision • E1 Music Publishing= • KOCH Music Publishing • No mention of Ent. One

  26. Some Questions/Analysis… • 1) Since the majority of KOCH Records’s sales are hip-hop or rap music, what does this mean for companies like Fat Beats? • 2) What does KOCH Entertainment really mean by independent? • 3) What does “independent” really even mean anymore?

  27. Cont’d • 4) Is there truly any competition in the recording industry? Especially in terms of distribution? • 5) Can independent music/underground hip-hop and hedge funds coexist? • 6) What does this relationship w/ hedges and off-shore trading mean in terms of the artists’ messages? • 7) If “indies” supposedly subvert the dominant system (music and in general), are they, in fact, just reinforcing that system/status quo?

  28. If 80% of the music sold in America comes from the “Big Four” and 10% from the independents (ADA, RED, KOCH/E1) what “choices” do we have? • Does this really even matter in the age of digital capitalism/music???

More Related