Opportunity/Need
   Market Opportunity
   - Colorado is a Top 5 New Economy State; high percentage of companies receptive to multimedia 
     solutions for both their internal employees (training) and external customers (online transactions)
   - Favorable trends include: 80% of new US jobs are in services - e.g. “Knowledge Workers” (white-collar 
     services type jobs); telecommuting (employees becoming more dispersed); terrorist attacks preventing 
     ease of travel; the emergence of the Internet as a platform for customer transactions
   - Market potential: worldwide corporate spending on e-commerce applications expected to reach $5.7 
     trillion by 2006; recent survey indicates that 93% of major corporations are considering online learning;  
     Web-based training is growing at a rate of 95% per year and is expected to be $5.5 billion in 2003.
   Market Structure
   - Multimedia production industry in Colorado is dominated by 4 large players: 23airmail, Texture Media, 
     Leopard, and Digital Metropolis (in past 3 years there has been a mass exodus out of this industry as 
     smaller companies could not compete with these companies on quality, price and service)
   - No standard channels exist in this market; products and services are sold direct to business (and very 
     few individual customers); no intermediaries involved in the sale
   - Industry has low barriers to entry. Any designer could start their own multimedia company; startup 
     software and equipment could be purchased for less than $2000. Main barrier to entry is stiff 
   competition.
   Compelling Need:
   - Companies looking at how they can efficiently build knowledge in their workforce (industry/product 
     knowledge) without the huge costs of travel or the dryness of printed manuals
   - Companies looking to create compelling, attractive Web sites using audio, video, graphics, etc. that will 
     generate leads, increase sales, simplify communication, and create a unique online experience
   - Emotional: the “Wow” factor
   - Economic: productivity, cost savings
   - Financial: ROI
                                
    Target Market - B2B
   Buying Decisions
   - The typical consumer for Digital Metropolis is a Product/Marketing Manager or Marketing VP 
   - These buyers come from a wide range of companies (their client list ranges from Fortune 50 companies 
     to local Mom and Pop stores; industries are also extremely diverse)
   - Clients are usually those who like to use technology as a differentiator in their industry; industry thought-
     leaders
   - Client contacts usually have their own budget within a larger corporate budget and can initially 
     approve/negotiate prices on-site
   - However, two-thirds of purchases need to be approved at a higher level (CFO or senior VP level) and 
     this process generally takes between 1-4 weeks
   - Entire sales process from initial client meeting to receipt of first check usually takes 3-6 months
   Purchase Criteria
   - A strong, personal relationship is the primary driver for these types of purchase decisions
   - Secondary drivers include quality of products, service during the production phase, and trust
   - Target market generally sees multimedia products as a luxury item; great to have when business is 
   going 
     well, first to cut when budgets are tight
   - Target market also weary of the instability of this industry as many vendors have closed shop in the past 
   Nature of Purchase
     couple of years
   - Purchases are made direct without use of a distributor, wholesaler or retail store
   - Digital Metropolis owner generates leads through prospecting and referrals
                                  
    Product/Services Features
   Product Lineup and Associated Features:
   - As a full-service multimedia design and production studio, Digital Metropolis combines CD-ROM, DVD, 
     Print, Video, and Web technologies into integrated marketing and training products. Below is a closer 
     look at the individual products:
   1) CD-ROM: generally used for corporate training and development modules, digital business cards (this 
       makes up 80% of DM’s CD-ROM business); and trade show/conferences kiosks. Prices range from 
       $2,000 to $75,000. Personal CD-ROM business cards are used to impress clients by showing tech 
       savvy; they link into the corporate web site and are used to help drive sales. Training & Development 
       CD-ROMs are delivered to create engaging, flexible and customizable course content by integrating 
       audio/video. Key product attributes: durability, style, unique packaging, status, image.
   2) DVD: generally used as marketing material, sales presentations. Services include DVD authoring, CD-
       ROM conversion, WebDVD, Plasma Displays & Video Walls. Prices range from $2,500 to $100,000. 
       Key product attributes include: high tech atmosphere, style, popularity with associates, image.
   3) Print: Digital Metropolis staffs a team of experienced designers; print services are typically for the fast 
       and/or affordable projects. Items include brochures, ads, logos, corporate ID packages, direct mail 
       campaigns. Prices typically start at $1000, dependent upon size and quality. Key product attributes 
       include: cost, quantity discounts, functional, layout.
   4) Video: DM markets this as a dependable medium for a dynamic presentation, with multiple formatting 
       options. Services include video production, video editing, video compression, AVI & Quicktime, on-site 
       video shoots, professional voiceovers, motion graphics, and Quicktime VR. Prices range from $1,000 
   to 
       $100,000. Key product attributes include: dependability, safety, availability (everyone has a VCR).
   5) Web: flexible medium for developing sales/marketing materials, training and development programs, 
       corporate communications, etc. DM promises a unique Web presence for each client. Services include 
       e-commerce solutions, video editing, online training, web site hosting, database development, Flash & 
                                 
       Shockwave, streaming audio & video. Prices range from $1,000 to $250,000. Key product attributes 
       include: status, image, online transactions, operating cost reduction, promotion of brand.   
    Product/Service Benefits
   Major Benefits of Products and Services:
   - Below is a list of benefits broken down by market, with attention given to the type of media:
   1) Sales and Marketing Materials
        - Multimedia solutions (DVD, Web, CD-ROM, etc.) helps companies achieve a competitive advantage 
          in many “older” industries (e.g. insurance, manufacturing)
        - Allowing customers to perform online transactions will result in lower operating costs
        - DM creates products that are interactive, intuitive and visually engaging, so users stay online and 
          complete transactions or users become persuaded to contact company
        - Companies are able to create and deepen relationships with customers through interactive polls and 
          easy to access product guidance
   2) Training and Development: 
        - DM’s online learning systems can allow an organization to deliver globally accessible learning 
          programs in weeks, not months, as would be the case with either text or live classroom materials. 
        - DM’s allows companies to run customizable reports to evaluate the usage and effectiveness of the 
          multimedia training sessions (useful in determining ROI)
        - Using audio and video can promote engagement of multiple brain channels, resulting in increased 
          retention by the user
   3) Integrated Knowledge Management:
        - Corporate communication websites provide company employees with visual, holistic views of 
          budgets, marketing plans, sales goals, etc. leading to better decisions within the company
      
                                  
    Competitive Advantage
   Competitors:
   - 23airmail: competes on quality of design work; also slightly differs on philosophy - less consultative; 
     wants to take existing strategy from the customer and enhance it; DM wants to take more of a role in 
     creating the strategy from scratch  
   - Texture Media: focuses on enhancing the customer experience (B2C); competes on client portfolio 
     strength, personal relationships 
   - Leopard: focuses on the consultative side, competes with DM on price
   - Indirect competitors: individual employees learning how to build web sites, multimedia presentations and 
     deliver them to their own companies at a lower cost
   - Future competitors: current designers could spin-off into their own multimedia company
   Sustainability:
   - It should be noted that all of the above companies have the same software and media equipment and 
     produce essentially the same products. Most often, competition comes down to the personal 
     relationships developed by the account reps at each respective company. 
   - Prices are fairly stable throughout the industry. Customers have little bargaining strength.
   - There are no separate channels of distribution in this industry. Companies prospect directly to clients.
   Digital Metropolis Resources and Capabilities:
   - Physical assets: main office is a beautiful, impressive loft in LoDo, downtown Denver 
   - Human assets: DM had three designers named to the Top 100 Multimedia Producers List in 2002; it’s 
     common for multimedia companies to have 1 named to the list, very unique and quite a differentiator to 
     have three employees on the list.
   - DM has been in operation since 1995, well-established contact list and impressive client portfolio