Idea 1: LinkedIn for Musicians
Our first idea is to develop a LinkedIn-like platform to empower musicians. By connecting artists with new opportunities, collaborative partners, and potential income streams, we hope to empower a critical segment of the music industry that’s struggling to establish a sustainable career in music.
TAM: The TAM represents the maximum revenue opportunity available if our service were accessible to all musicians in the U.S. Here, we’re considering both professional and amateur musicians.
According to recent estimates, there are over 62 million musicians in the United States, ranging from those who play as a hobby to full-time professionals. Using average income data, the total income pool for this population is approximately $3.534 trillion (57 thousand average income of a US citizen * 62 million musicians in the US).
However, if we take a more practical value theory approach (which estimates market potential by focusing on the potential revenue per user based on what the user might be willing to pay for the service), where we consider a premium subscription cost of $13 per month, the TAM becomes about $805 million per month (13 per month on subscription * 62 million musicians). This figure represents the highest revenue potential if all U.S. musicians subscribed to our platform at the premium level.
Sources:
- https://interlude.hk/the-magic-of-amateur-musicians/#:~:text=There%20are%20more%20than%2062,people%20play%20a%20musical%20instrument
- https://www.bls.gov/bls/blswage.htm
SAM: Our SAM narrows the focus to professional musicians who would likely benefit from a professional networking tool. In the U.S., there are roughly 120,000 professional musicians. Given the average income of musicians at $35,000 per year, this represents a SAM of $4.2 billion (35 thousand per musician * 120,000 professional musicians).
Applying our value theory approach here, the SAM for our $13 per month subscription would be around $1.56 million per month, representing the potential revenue if all professional musicians used our platform.
Source: https://www.bls.gov/oes/current/oes272042.htm
SOM: Here, we target musicians within the professional subset who face significant income instability, a primary audience for our platform. According to the Music Industry Research Association (MIRA), about 62% of professional musicians earn less than $25,000 a year, and 82% experience periods of unemployment. We believe this subset of musicians could greatly benefit from additional opportunities to connect and collaborate.
With 62% of our professional market earning under $25,000 annually, the SOM would amount to $1.86 billion based on current salary figures (62% musicians earning less than 25,000 annually * 120,000 total professional musicians * 25,000 dollars per year).
Using the value theory $13 subscription model, this target audience could yield a SOM of $967,200 per month, derived from the following formula: (62% musicians earning less than 25,000 annually * 120,000 total professional musicians * 13 dollars per month).
Source: https://themira.org/
Idea 2: Disability Access
Our second idea aims to make live music more accessible to disabled individuals who face challenges attending in-person events.
TAM: The TAM represents the maximum revenue opportunity if Soundspot could reach all disabled adults interested in attending live music events. There are approximately 70 million disabled adults in the U.S., and 52% of Americans attend live music events annually. Based on these figures, we estimate about 36.4 million disabled Americans would attend live music events (52% of 70 million disabled adults in the US).
Assuming that a virtual concert ticket costs 30% of an in-person ticket, which averages around $130 in price, this brings the virtual ticket price to $39 (30% of 130 dollars, the average ticket price in the US).
SoundSpot offers its premium users discounts on virtual events. Let us assume that 20% of all users are premium users, and the remaining 80% are “freemium” users. Let us also assume that premier users get a 50% discount on tickets. Concretely, this means “freemium” users (those that are not premium subscribers) pay the full $39 for concerts while the “premium” users pay $19.5 for concerts (50% of 39 dollar ticket price). Given this, we calculate the following information:
- Freemium Users’ Ticket Sale Revenue: 36.4 million disabled concert-goers * 80% “freemium users” = 29.12 million free users.
$39 ticket price * 29.12 million free users = $1,135.68 million annually - Premium Users’ Ticket Sale Revenue: 36.4 million disabled concert goers * 20% “premium users” = 7.28 million premium users.
$19.5 ticket price * 7.28 million premium users = $141.96 million annually - Premium Subscriptions Revenue: $13/month * 12 months * 7.28 million premium users = $1,135.68 million annually
Thus, our TAM is approximately $2.41 billion per year (1,135.68M + 141.96M + 1135M in total revenues).
Sources:
- https://access.intix.org/Full-Article/nielsen-releases-in-depth-statistics-on-live-music-behavior-52-percent-of-americans-attend-shows
- https://www.cdc.gov/ncbddd/disabilityandhealth/infographic-disability-impacts-all.html
- https://www.forbes.com/sites/forbes-personal-shopper/article/why-are-concert-tickets-so-expensive/#:~:text=Interestingly%2C%20according%20to%20Pollstar’s%202024,average%20ticket%20price%20over%20%24100.
SAM: Our SAM considers those disabled individuals who have internet access and a high enough interest level in live-streamed concerts. According to data, 78.4% of disabled adults have internet access, and as a general rule of thumb, we are expecting the interest level to be at 10%. Concretely, 10% of disabled adults with access to the Internet will be interested in online music services. If we extrapolate from this data:
- Total Market: 36.4 million disabled concert-goers * 78.4% with access to the Internet * 10% interested in online music services = 2.853 million disabled adults with Internet access and interest.
- Freemium Users: 2.853 million disabled adults with internet access and interest * 80% = 2.28 million
- $39 ticket price * 2.28 million = $88.92 million annually
- Premium Users: .853 million disabled adults with internet access and interest * 20% = 0.57 million
- $19.5 ticket price * 0.57 million * 2 tickets/year = $22.2 million annually
- Premium Subscriptions: $13/month * 12 months * 0.57 million = $11.4 million annually
- Freemium Users: 2.853 million disabled adults with internet access and interest * 80% = 2.28 million
Our SAM is therefore around $122.52 million per year (88.92M + 22.2M + 11.4M).
Source: https://www.dol.gov/sites/dolgov/files/ODEP/pdf/disability-digital-divide-brief.pdf
SOM: The SOM focuses on the realistic share of the market that Soundspot could capture in its early years, given competition from established organizations like Accessible Festivals. Given that our product offers easier access, but also a less incorporated experience (virtual) and that the incumbent is already established, we can hope to grab 5% of the total market share in the first year.
SOM = $122.52 million * 5% = $6.126 million per year.
Source: https://accessiblefestivals.org/
