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Casablanca Kids Financial Suggestions

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Casablanca Kids Financial Suggestions

As a music company trying to compete in a world that is heading more and more toward a pure digital format Casablanca Kids needs to look into really changing their format. While in the past investing in a CD market may have been a good idea in the modern economy such things just do not work. That is, at least in the area’s Casablanca Kids currently operates. As such there are really five different things that can be done to generate revenues or reduce expenses for the company. 1) Reduce the cost of manufacturing CDs 2) Digitize the music being offered for online distribution 3) Expand internationally to more CD friendly markets 4) Focus more on higher volume sale opportunities 5) License the music products to another company Reducing manufacturing cost is all about location and favorable rates of exchange. Right now Casablanca Kids manufactures their CDs where the music is made, in Canada. By outsourcing manufacturing to a third part overseas cost could be reduced by around ten percent. This would add to the bottom line for CD sales. Going almost hand in hand with that would be focusing on the mass market opportunity presented by the bargain bin section at most retailers. While the profit margins are not nearly as nice the potential sales volume is much higher than mid-range or premium markets. By digitizing their music Casablanca Kids would be able to take advantage of a number of different distribution opportunities. They could sale their music on a song by song basis through their own website, through a multimedia company such as ITunes or Livewire and they save the manufacturing cost on CD’s completely. While it is probably not a good idea to go completely digital it is a segment that at the moment they are ignoring. Options three and five also almost seem to go hand in hand. Casablanca Kids has little to no international presences and the cost of acquiring said presence could and most likely would be quite large. Instead of trying to build up their artist internationally alone they could license the songs to larger, more well-known company such as Disney. While it is true that Disney is one of their top competitors the synergistic benefit of doing business with them is just too large to ignore.
Unlike Casablanca Kids Disney has a large brand image that is known world over, and while most if not all of the music they sale is made by artist under Disney contract’s the company has been known to acquire outside products before. The recent acquisition of star wars in one such case. Even if they only offered a two percent royalty on the markets they take the Casablanca Brand to the potential profit for the company is quite large considering the reach Disney has.
Casablanca Kids could also look into branching out into Movies and Television. While the cost are quite high and success not guaranteed if the past has taught us anything it is that if your show becomes popular it can become a real source of revenue. Barney, The wiggles, Blue’s Clues and Pee Wees Funhouse are just a few examples of children’s programming that has been highly successful. A good show would not only expose children to the Casablanca Brand but it could mean additional revenues in the form of DVD sales which is a growing market as more parents get vehicles with in built DVD entertainment centers.

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