User:Windwall/Indie Scene

IN DEVELOPMENT - RESEARCHING/DRAFTING

The Indie Scene is a social movement that generally exists underground with periodic movement into the mainstream culture. Indie refers to independent art (books, clothing, film, magazines, music) created outside of it's mainstream system, permitting the artist to retain creative control and integrity over the art.

Indies within Porter's 5 Forces

The Indie Scene is examined below within Porter's 5 Forces framework.

Customers

Customers of indie products are not generally the mass population; rather, they are known to be hipper and younger demographic seeking new and diverse products at affordable prices. They depend heavily on technology (the Internet and portable devices) to find information about products and services and to consume those products and services. Accordingly, the bargaining leverage of customers drives this category. Nevertheless, these customers buy less volume as there are greater information available, on the internet and through independent publications, as to alternatives and substitute products. Customers have the ability to backwardly integrate from cause marketing to artists and firms developing products related to those causes or interests.

Bargaining Power of Suppliers (Indies)

NOTES:

gambling with fewer dollars

• supplier switching costs relative to firm switching costs
  
• degree of differentiation of inputs
  
• presence of substitute inputs: "In my experience with venture capital money, the way that funds usually work is on slates," says Howard Cohen, co-president of the independent distribution company Roadside Attractions and formerly a UTA agent representing independents. "They want to spread the risk over more than one film

• supplier concentration to firm concentration ratio
  
• threat of forward integration by suppliers relative to the threat of backward integration by firms
  
• cost of inputs relative to selling price of the product
  
• importance of volume to supplier
  

Independent films have several advantages over studio films. For one thing, they do not involve the high overhead of many studio pictures and the multimillion-dollar development fees their producers expect. For another, indie projects can deliver financial returns more quickly because investors don't have to worry about a studio deducting a 15%-20% distribution fee before paying out profits.
The cost of making and distributing studio movies is higher than it has ever been, while the cost of making quality independent films has not increased as rapidly," the indie producer says. "And the home video value of independent movies remains relatively high. A studio movie might cost 10 times as much as an independent movie, but that does not mean its home video value is 10 times as great. If you look at the (revenue of a successful specialty film) in relation to cost, it is probably better."

Threat of New Entrants

NOTES:

• The fifth edition of IFF (Imaginaria Film Festival) will take place in Conversano (Italy) on July 22-28, 2007. With the support of the Directorate for Cultural Policies of the City of Conversano and with the contribution of the Puglia Region, Province of Bari and University of Bari, the event is becoming an important appointment for independent cinema, on a national and international level.
• The Independent Film Channel has joined forces with Comcast for "IFC in Theaters," bringing critically noticed first-run movies to pay-per-view cable on the same day they debut onscreen in New York, Los Angeles and other major markets.
• the existence of barriers to entry: internet and file sharing knocked down control over supply chain:
  
  • marketing
    
  • distribution: iTunes, MySpace, YouTube, film festivals
    
  • accessibility
    
  • Instead, they build relationships with college and public radio stations and local retailers who are more receptive to less mainstream music
  • no brick and mortar shops, digital: Big-box stores won't carry an album unless they know it will sell at least 5,000 units - which new artists won't necessarily do right away
  • avoiding the major expenses associated with getting a tune on the air - which can cost upwards of $400,000 or $500,000 per song - independent labels are able to turn a profit far more quickly, and share more of those profits with their artists
• economies of product differences
  
• brand equity
  
• switching costs
  
• capital requirements
  
• access to distribution:
  

Merlin Australia's largest independent music and entertainment distributor
World Independent Network

• absolute cost advantages: corporations have profit-based bottom lines and shareholder pressure
  
• learning curve advantages
  
• expected retaliation
  
• government policies
  

Threat of Substitute Products

• buyer propensity to substitute
  
• relative price performance of substitutes
  
• buyer switching costs
  
• perceived level of product differentiation
  

Competitive Rivalry

NOTES:

• number of competitors: five major corporate suppliers of music:
  
  • Sony Music Entertainment Inc.
    
  • Universal Music Group
    
  • BMG Entertainment
    
  • EMI Group
    

Warner Music Group

• rate of industry growth: overall album sales, which dropped about 11 percent in 2002
  
• intermittent industry overcapacity
  
• exit barriers
  
• diversity of competitors: pop made for the masses vs. new, different, greater flexibility
  
• informational complexity and asymmetry
  
• brand equity: image, idealism, anti-corporate attitude, eager for original and offbeat, new and exciting
  

That wasn't enough for Evan Shapiro. Since taking over as general manager two years ago, he's sought to establish IFC as a free-speech haven, a network that relishes controversial issues. His slogan for IFC is "TV, Uncut."

• fixed cost allocation per value added
  
• level of advertising expense
  

Indie Timeline

• Late 1970s and 1980s punk bands flourished
• mid-1980s corporations take note of indies (Nirvana, a fiercely independent rock band from the state of Washington, exploded onto the mainstream)

Independent Artists

• Flatlanders
• John Hiatt
• Bill Madden
• Aimee Mann
• Michelle Shocked
• Ani DiFranco

Trivia

The following once were indies:

• Death Cab for Cutie
• Modest Mouse
• Nirvana
• Offspring
• Quentin Tarantino
• Wes Anderson
• Yeah Yeah Yeahs