No word on the rest of the world, so this is still an interesting arena for South America

1. CONSUMER ANALYSIS

Orientated to popular music, world wide distributed and available to every kind of audience.

Music lover, with free time and interested in catalogues managing, cellular phone user.

Interest begins since it is possible to access only a little portion of catalogues, people cannot retain all what they have listened. The existence of erroneous data from “pier to pier” sharing also leads to the necessity of organize your own catalogue. Moreover there are albums that users do not know but they would be interested in if they could get them. The challenge will be to recognize the people preferences from well defined searching procedures. 

To sum up, we talk about the band between 15 and 24 years old.      

2. GLOBAL DEMAND ANALYSIS (source INDEC Argentina)

Market: Republica Argentina

Population: 36 millions inhabitants

Hypothesis: Potential cell phones users (15 to 70 years old): 23.5 millions.

Cell phones on service: 11 millions, representing 46.8% of population hypothetically using cell phones.

Potential users of added value services on cell phones located in the band between 15 to 24 years old:  6.4 millions.

The 46.8% of this band represent 3 millions of potencial customers and it is a discreet figure taking into account that it will be more concentration of devices in this group comparing with the other one from 25 to 70 years old.

3. PROJECT DEMAND  (source INE, España)

Music identification services are recent and there are not accurate statistics. Nevertheless  we do know that in Spain (cultural affinity) a monthly average of 500.000 services  were registered during the first semester. A comparative analysis as follows:

Market: Spain

Population: 41 millions inhabitants

Hypothesis: Potential cell phones users (15 to 70 years old): 30 millions.

Cell phones on service: 30 millions, representing 100% of population hypothetically using cell phones.

Potential users of added value services on cell phones located in the band between 15 to 24 years old:  5.6 millions.

The 100% of this band represent 3 millions of potential customers.

Scope

5.6 millions of users making a monthly average of 500.000 phone calls requiring the service during the first semester.

Then 3 millions of users making 267.857 phone calls per month in Argentina or 3.214.286 phone calls per year.

Taking into account a 90% effectiveness in the recognition: 2.892.857 phone calls per year.

Standard Engagement

The standard engagement allows 30 phone calls per minute and if them are made in a band of 12 hours (normal), we have 21.600 phone calls in a day, 648.000 in a month and 7.776.000 in a year.

This extra performance supports any seasonal increment, if it comes into fashion, due the innovation or market break out in the future. 

Whit reference to the project lifetime (only 5 years due product characteristics), a prudent background is adopted, this means a saturated and still cell phone market, without growing population.

Anyway we must consider that 11 millions users are from September 2004, meanwhile in September 1999, 3.6 millions were registered (dramatic increase).

Since the second year a share market of about 25% is abandoned to end the project with only a 50%, in the conservative hypothesis that the competitors  can reach the new technology (even though Mid Bahía Blanca still keeps the advantage of being the first and moves into the linked contents market).

Project Demand (x 1000 phone calls)

For the present project other incomes due linked contents and trade through the web page are not taking into account.

4. SUPPLY ANALYSIS  

This service has no local supply. Nevertheless a quick response from competitors is expected. Specially those that already operate in cell phones linked contents, most important as follows:

Ringtones MP3

MTV LA

Ubbi Móvil

Toing

Moviclips

Operating through Telephone Companies:

Telefónica de Argentina (Telefónica de España), recently purchasing Movicom (Bell): 5.5 millions customers (Unifon now Movistar). 50% share market.

Telecom (Stet Italy and France): 2.9 millions (Personal). 26%

Compañía Telefónica del Interior (América Móvil): 2.6 millions (CTI). 24%

Total 11 millions of users.  

5. PRICES.

Share.

Call price                  U$ 1

Carrier share            U$ 0.30          30%

Mid Bahía Blanca U$ 0.15          15%

Database / Soft        U$ 0.55          55%

Income of Mid Bahia Blanca is collected monthly from the carrier.

1. BUSSINESS STRATEGY

Main condition is to go first into the market, together with an aggressive publicity campaign in youth media all over the country. This will improve the recognition and the empowerment of the brand.

Of course in a short term competitors will appear, being phone operators or companies already at linked contents. The first case resulting in a double risk since it can affect the availability of one of the resources. Actually the phone company can manage the project by itself (Amena case in Spain), it is not a great investment and it means an added value. Nevertheless, the model “system integrator” providing the service to a telephone carrier is possible (“Shazam” U.K.). Alternatives supporting this model as follows:

1) To provide the service through an “Added Value in Telecommunications” operator (also known as “0609” lines).

2) To be a partner of a unique telephone company which will be very well identified by his innovative and original service, standing out from competitors, and provided with the advantage of a ready made product supported by the registered owners. 

Anyway in this country it is a fact that linked contents are not operated directly by telephone companies.

To sum up, a very important thing is that once the company can step on music identification market, other options of added value will be able to exploit, as selling and delivery of songs, ring tones download, videos, wall papers, etc.. (Statistics in Europe show that 20 from 100 music identification phone calls lead to a purchase of other products). In fact, this is the actual opportunity for this project. In such a dynamic sector like being technology oriented to entertainment, to move into the market with an innovative product will allow to go on providing a whole chain of services.

III TECHNICAL SURVEY

Standard Engagement (recommended).

• Database size: 250.000 fingerprints.

• Each server array can andel about 30 calls/minute.

• Configuration: 1 master server, 11 slaves (one slave is standby in case a live server fails).

Total time to install: approximately 6-8 weeks.

System Process Flow Detail.

1. Incoming call from customer.

2. Fingerprint is extracted and sent to local database.

3. From local database fingerprint passes to servers where they are recognized  and sent back to the user as an identified song.

Round-trip time: approximately 10 seconds.

IV FINANCIAL SURVEY

1) INVESTMENTS

a) FIXED ASSETS

*Avoided if system is installed in a free zone (eg.: General Pico, La Pampa Province)

b) ACTIVE ASSETS

(To afford 30 days displacement)

2) OPERATING COSTS (annual)

Software maintenance                                                       U$D  10.500

Data base maintenance                                                     U$D  51.000

Total Operating Costs                                                     U$D  61.500

3) OPERATING EXPENSES (annual)                                                    

General Manager                                                                U$D   32.000

Tax rate and services                                                         U$D   18.000

Promotion, publicity and marketing                                  U$D   90.000

System Administration and Maintenance             U$D     7.000

Legal and Accountant Consultancy                                   U$D     4.000

Total Operating Expenses                                             U$D 151.000