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To: ztect who wrote (103)	2/2/2000 2:45:00 PM
From: ztect	Respond to of 177

(cc) Miller Bruce Springstein MusicCard? To: ztect who wrote (38819) From: Susie924 Tuesday, Feb 1, 2000 5:37 PM ET Reply #38822 of 38874 I had some down time at work today because my computer was down and I got to thinking a lot about TSIG.We've all been talking about the Coke deal at the Super Bowl and hopefully another one during the NCAA's in March. Do we really know how many people at these events are into music? Why not distribute cards at concerts? How about a Bruce Springsteen Music Card, or a Faith Hill Music Card? Everyone here probably remembers "We Are the World" A bunch of musicians got together and sang a song and I believe the proceeds went to the homeless. Many musicians have favorite charities. Some even donate a portion of the proceeds from concerts to their favorite charity. Why not make a deal with TSIG for a certain amount of cards to be distributed at their concerts and any reloads would be earmarked for the charity of their choice. I have no idea what the cost to the musician would be, but heck they've all got tons of money don't they? The added bonus would be that they would be helping the NMF also. Susie =============================================== To: Susie924 who wrote (38822) From: ztect Tuesday, Feb 1 2000 6:32PM ET Respond to Post # 38824 of 38874 Susie............. Your idea I have thought about a lot. This link takes you to one of my clients... electricfactory.com who I approached with the card while considering a distributorship back when distributorships were under consideration. Dealing directly with musicians may get a bit problematic because they're under contract with record labels some which are getting into the retail business through acquistions. For example CDnw being acquired by Columbia Records/Sony + Time Warner/EDI & AOL merging et cetera. Consequently there may be some politics involved. Concert promoters tend to be regional and also not inclined to rock any record companies boats. Plus the residuals from reloads probably wouldn't be enough of an enticement or a draw for either promo card give outs or Point of sale locations for 20 unit cards. Consequently, I think the best approach for such venues would be another promo card to be distributed at concesions. The card would be a Miller or Coors or whatever beer Music Card. The corporate company gives a percent of reloads to its charity. In Miller's case UCP. Tsig gives part of its 1/2 from the reload to NMF. The beer's company promotion would be tied into a performer or group's tour. The name of the performer could be tied into the card. The performer could get paid part of a royalty for use of his name. Thus you'd have the Miller Bruce Springstein MusicCard, where tsig agreement is with a corporation that heavily advertises and not directly with a musician whose obligation with his/her record label may be construed as a conflict of interest. You'd go to the MMC site through a Miller portal like the one with Coke. This model of the promo card is also how I envision other UCP corporate partners cards could work. Rather than a 50/50 tsig split w. UCP A 50/50 reload split with the corp fronting the promo card costs 10% of tsig's 5.00 would go to NMF 10% of Miller's or Cirlce K's et cetera would go to UCP. The key is volume and distribution The charity doesn't have the upfront costs for either production or promotion of the card whereas its corporate partner does. Another coke concert card promotion could work the same way. Such a model would take distribution out of the charity hands that hitherto hasn't been a consistent or heavily participated in approach to generating traffic or revenues. z btw- since when do college age students not spend money on cd's? Sports fans listen to music too.

To: ztect who wrote (103)	2/2/2000 4:01:00 PM
From: ztect	Respond to of 177

(fa)All-Millennium Pro Football Team MusicCard MATH#2 -------------------------- 1,000,000 cards distributed ---------------------------------- ---------------------------------- Model based on Certain Assumptions (listed below) ---------------------- ---------------------------- assume 30% activated 300,000 --------------------------------- -------------------------------- 75% buy through of 3 cd's= 225,0003 675,000 cd's, 225,000 shipments @ $4.00 per shipment $1.00 margin cd sales, $1.00 margin shipping (25%) Gross Revenues (gr): $7,418,250 cd sales Gross Revenues (gr): $900,000 shipping Costs of CD Sales: ($6,743,250) Costs of Shipping: ($675,000) Net Revenues $675,000 cd sales Net Revenues $225,000 shipping sales Total Gross Revenues $8,318,250 Total Costs of Sales ($7,418,250) Net Revenues: $900,000.00 Sub Total ---------------- ----------------- 12.5% buy through of 2 cd's= 37,5002 75,000 cd's, 37,500 shipments @ $3.00 per shipment $1.00 margin cd sales, $0.75margin shipping Gross Revenues (gr): $824,250 cd sales Gross Revenues (gr): $112,000 shipping Costs of CD Sales: ($749,250) Costs of Shipping: ($84,375) Net Revenues $75,000 cd sales Net Revenues $28,125 shipping sales Total Gross Revenues $936,250 Total Costs of Sales ($833,625) Net Revenues: $102,625.00 Sub Total ---------------- ---------------- ---------------- 12.5% buy through of 1 cd= 37,500 * 1 37,500 cd's, 37,500 shipments @ $2.00 ea $1.00 margin cd sales, $0.50 margin shipping Gross Revenues (gr): $412,125 cd sales Gross Revenues (gr): $ 75,000 shipping Costs of CD Sales: ($374,625) Costs of Shipping: ( $56,250) Net Revenues $37,500 cd sales Net Revenues $18,750 shipping sales Total Gross Revenues $487,125 Total Costs of Sales ($430,875) Net Revenues: $56,250.00 Sub Total ------------------- ------------------------------------------- ------------------------------------- 50.0% of the 75% of 3 buy throughs reload 11.25% of reloads from total distribution 112,500 reloads @ $10.00 ea Gross Revenues $1,112,500 card sales Profit Share Coke ($556,250) Profit Share NMF ($111,250) Profit Share Cost ($667,500) Electronic reload, therefore no additional cost for manufacturing of card Net Revenues $445,000.00 Sub Total National Music Foundation -------------------------- ------------------- ------------------- Revenues from advertising (hypothetical numbers) Amount of Cards = 1,000,000 Production Cost per card= $0.25 Sale Price of Card = $0.50 Gross Revenue: $500,000 Cost of Card ($250,000) Net Revenue Card $250,000 ---------------------- ---------------------- -------------- Total Gross Revenues....$11,354,125 Total Gross Costs.........($9,600,250) Total Net Revenues......$1,753,875.00 ----------------- ------------- Cost of advertising = $0.00 ----------------- ------------------ No additional sales from the reloads factored into this model ------------------ --------------------- Model also doesn't account for any "viral impact" ie. promo card recipients telling other non-recipients about the site and its value. ----------------------- ----------------------- Assumptions only 30% card activation only 11.25% card reload $1.00 margin on cd's 25% margin on shipping Card Production cost = 0.25 Card Mark-up = 1 time Card margins = 0.25 Conservative assumptions? Conservative numbers? Alternative numbers and assumptions? =========================