Oyama' s Mass Appeal Enterprise Inc. has found its niche in concert promotions.
In the high-stakes, high-risk world of music promotions, Duayne Oyama thinks he’s found a way to reduce the risk to himself and potential sponsors. This is no small deal for Oyama’s company, Mass Appeal Enterprise Inc., which puts on about 200 pre-packaged music events a year. “My company is 90 percent sales and marketing, 10 percent promotion and production,” says Oyama, the firm’s president and owner. “And that is what separates me from all the other guys that don’t make it in promotions.”
Oyama’s business model seems to be paying off. The company will bring in just under $1 million in sales this year, a 50 percent increase over last year, without adding to the company’s current four-person staff. The traditional approach to promotions calls for the promoter to front much of the costs to hold concerts or events. He then relies on sponsorships and ticket sales to make margins.
Oyama’s turned the model on its head. Instead, Mass Appeal Enterprise, which specializes in Hawaiian music, establishes a yearlong calendar of about 200 events. He may not (and in most cases does not) have acts lined up for each event. But his industry reputation is such that sponsors know he’ll likely be able to pull the event together.
In the beginning, Oyama spent most of his time trying to manage the business’ tenuous cash flow. With large events costing upwards of $100,000, and even the smallest events costing at least $3,000, he spent many restless nights. “The bottom line is this is a very expensive business,” he says.“Forget about the events, I know I’m going to do the event no matter what, so what I do is volume,” Oyama says. “And that puts me in a very unique position of heavy buying power with the radio stations. Basically I almost compete with them to do buys.”
After figuring out that he was spending $500,000 a year for advertising, another half a million a year buying entertainment, and excess fees for production, rentals and liabilities, Oyama was quick to devise an alternative plan last year. He put together a makeshift sales team (he and his promotions director), a sponsorship booklet, an order form, and hit the ground running.
“It really worked!” he says. “People were literally looking at the order form and checking off events like it was a catalog: ‘I’ll take five special events, two concert series, and eight holiday events.’” By the end of the year, Mass Appeal had met 50 percent of its total revenues goal for 2001. “So now I’m walking into events with only half the risk,” he says. And even then, ticket sales for the events will usually more than pick up the slack.”
Oyama’s focus on local entertainers has also mitigated some of the risk. Hawaii isn’t as popular a stop over for big-name acts as it used to be. “Especially now, the economic situation in Australia, New Zealand and Japan is not good, so the performers that used to stop here aren’t coming out here anymore,” says Tom Moffatt, president of Tom Moffatt Productions Inc., and one of Hawaii’s best-known promoters.
Not surprisingly, Oyama has often been compared to Moffatt. While he’s pleased by the comparison, Oyama has no intention of trying to take on a promoter such as Moffatt who usually books the big names. Says Oyama: “I thought I could either compete against somebody who’s a leader in his niche or I could create my own niche and be a leader in that. To me, that was more attainable.”
As is the case for most business success stories, Oyama’s is not a tale of overnight success. While sponsors nowadays dish out thousands of dollars to be associated with Mass Appeal’s highly publicized events, Oyama says five years ago he’d be lucky to get a sponsor to commit to handing out free T-shirts.
“So I had to do a lot of relationship building,” he says. “But now they know I’m a promoter and I’ve invested all my time bringing in sponsorship money, which in turn gives me high spending ability, which, in turn, gives me clout and leverage.”