Eating and Listening - We do both PDF Print E-mail
Written by Graydon   
Sunday, 26 March 2006

I've been pondering some thoughts about the music that some restaurants play.  The original thought train had me curious if there was some way to provide targeted advertisements to the eatery's clientele.  I started the analysis using the limited knowledge I had about how restaurants obtained the "content" that they played...

1.  Just turn the radio to a local station that somewhat fits the theme of the restaurant (BBQ gets the local country, Mexican gets the local Spanish / Tejano station)

2.  Purchase the normal CD's we all can get from Best Buy, Sam Goody or Wal-Mart and plug them into a multi-CD player and hit "random" on the control.

3.  Purchase theme music CD's from a company that aggregates multiple artists on a CD and do the same as above.

4.  Other?  What were the other ways they might be doing it?
 

From there, I questioned... "could you provide the theme music cd's with targeted ads?" and pondered how you would gain advertisers and price it as well as measure the demographics and value of the ads.
 

As I continued to hunt around for ideas on how you could do this and how to implement, I ran across the Live365 site and thought "How cool is that!".  Screw the ads and the hassles that come with that... just put together the best theme content library possible, setup a Live365 account with a subscription option and then just figure out how to convince a restaurant to subscribe to your "station" and sit back and relax on the beach.

Of course - nothing is that easy... but I think there's a viable service business in the works here.  It plays on the mantra of "niche markets" and wouldn't take a large number of people to implement.

So, here are some key factors:

1.  You gotta have the content, or put forth the funds to get it (used CD stores would be the primary source).

2.  The restaurant has to have a high-speed Internet connection and available bandwidth on it to prevent dropping.

3.  It has to be easy to setup and use.

4.  It has to make sense (financially) for a restaurant to pay for the service.
 

There may be others... and as I think about them, or you send them to me, I'll update.

Some thoughts on the factors.
 

1. Content may be the initial barrier... if you only have two George Strait CD's, then it's not going to be cheap to acquire the content to make a variety country / western station.  However, if you are a DJ that already has 100's + of titles, then this is another way to make them work for you.

2.  Connection - I don't assume that they have a good Internet connection.  If they do, great, if they don't, you could look at bundling the connection with your subscription fee.
 

3.  Easy - From what I can tell, a $500 computer with some audio out connections to the places stereo and you should be set.  They don't have a stereo... excellent, be the expert in what they should use, how to set it up and even do it for them... all part of the service.

4.  Financial sense - this probably should have been number 1... but I didn't feel like retyping.  How to judge the financials?
 

Let's see...

Live365 service is based upon listening hours .

Assuming 24/7 broadcast, you get ~750 hours in a month which puts you in the $246/month bracket (assuming I've read through the site correctly, that is your only recurring fee).  So, if you can charge $247/month for a restaurant to receive your content, you technically have positive cash flow (yes, I'm ignoring up front setup fees and the cost of all of the music you purchased... but that's secondary to your recurring fees).

Honestly, do I think a place will pay ~$250/month for your music?  No.  So let's leverage volume and see what happens.
 

The Custom plan on Live365 gives you 15,000 listening hours... which means that you could deliver your 24/7 content to ~20 places for a cost of ~$1,000.  So now you are down to a break-even monthly requirement of $50 per month per restaurant.  That's probably not too bad.

Now, the above represents 24/7 delivery... we'll take a final look using something that might be more realistic... an 18/7 business (6am - midnight).

Now you are at ~560 hrs in the month per location... which means you can fit ~26 places into your 15,000 hour allowance and drops your break-even to just shy of $40 / month.
 

Is this an absolute winner?  Probably not, but it has some possibilities.

If you are a DJ with content that sits idle most of the week... why not give it some thought.

Last Updated ( Sunday, 26 March 2006 )