Colorade Creative Music

Overview

Darren Skanson, the CEO of Colorade Creative Music (CCM). As a lead classical guitar artist of Colorade Creative Music, he travels all over the country to perform light classical guitar and sell his line of CDs. He graduated in Moorhead State University with a BA in music and minor in Business in 1989.

In 1993 Darren is hired by Malcolm Watson, the owner of Watson and Company, to be a guitarist. After DarrenЎ¦s college friend Jennifer was hired to serve as Watson and CompanyЎ¦s booking agent who was responsible to book duo nationwide, Watson and CompanyЎ¦s annual sales increased from $100,000 to $250,000. Darren realized that he can making his living by performing at art festivals around Colorade and sell his CDs like what Malcolm Watson did. After discouraged by Malcolm Watson that he didnЎ¦t want move a big step in his business, Darren decided to leave Watson and Company with Jennifer to start his own company called Colorade Creative Music (CCM) in January 1995 to achieve the vision of make up his own record label o produce and distribute recorded CDs of his and other musicians' works.

Generally, most of the managing duty is handled by Darren himself. After two of his CDs released, he became more and more busy. He noticed that he needed more experienced people to join the crew to handle different tasks for the company. For example, he hired Andy who got valuable knowledge of how to capitalize on art festivals to give him hand and Amy as AndyЎ¦s assistant.

During Colorade Creative Music was expanding by time to time. Darren started feeling it is difficult for him to mange the business. He faced difficulties because of lack of knowledge of promotion and marketing skill. With the availability of cheap production equipment (i.e. Audio Compact Disc become popular in the public) and easy access to Internet marketing and distribution, the music industry is fragmented and can simply classify in four categories: Major Labels, Independent Labels, Microlabels and Vanity Labels. Colorade Creative Music was fall into Microlabels as there are fewer than 10 artists under contract. Darren finally decided that direct-sales is suitable to apply on running small business with limited resources like CCM instead of the tradition formal ways of distribution. The reasons are the traditional way of distribution needed large order and the payment system was risky for a small company. Also, CCN is not able to afford expensive promotional campaigns, for example, negotiating airplay. After application of one-stop, direct-sales, their gross profit were raised in around 45% from $106,892 to $194,579 in four years, from year 1997 to 2000.

The next move of Darren was concentrating to be an entrepreneur instead of a pure musician in order to run a more profitable business. By December of 2000, CCM had four product lines: Darren Curtis Skanson, Acoustitherapy, Andrew Thomas Harling and Music for Candles. He noticed that the people with approached him at the art festivals and bought this CDs were generally white, middle-class adults, mostly women in the mid 40s-50 age range who were not classic music enthusiasts. Darren considered expanding his business out of town, however, he didnЎ¦t know how to break into the traditional industry distribution network where he was merely replied on live performances to promote their music on this stage.

At that moment, the major dilemma was that they have built the backbone of CCN on direct sales. Direct sales are profitable for local town sales, but not able to expand the music label worldwide. Tendonitis in Darren's elbow forced Darren Skanson rethinking of whether to turn over the sales and managerial functions of CCM to professional managers and devote himself to his first love, performance, or whether to focus his energies on managing and building CCM and confining his own performances to the recording studio. As a result, he need advises and solid recommendation on his business with support of analysis and evaluation of resources and capabilities.

Evaluation of Resources and Capabilities

Initially, Darren started his music career because of the excitement and the adulation that he received after this first saw of a musical group