Latest / The Bob Lefsetz Podcast / Rob Price

Transcript

Rob Price · The Bob Lefsetz Podcast

• 0:08
  Speaker 1: Welcome, Welcome, Welcome back to the Bob Left Sets podcast.
• 0:13
  Speaker 1: My guest today is Rob Bright's CEO of the School
• 0:17
  Speaker 1: of Rock. Rob. How many schools of Rock are there?
• 0:23
  Speaker 2: Not enough, Bob? But today we've got three hundred, just
• 0:26
  Speaker 2: under three hundred and forty around the globe in fifteen
• 0:30
  Speaker 2: countries altogether.
• 0:33
  Speaker 1: Okay, And how many are owned by School of Rock
• 0:36
  Speaker 1: or they all franchised? How does it work?
• 0:38
  Speaker 2: We operate forty six of the schools. Those are exclusively
• 0:43
  Speaker 2: in the US, scattered about in key markets, but the
• 0:49
  Speaker 2: rest are franchised all through the US and internationally.
• 0:53
  Speaker 1: So let's say I want to have a franchise, walk
• 0:56
  Speaker 1: me through it.
• 0:58
  Speaker 2: Well, you know what's interesting is we tend to appeal
• 1:02
  Speaker 2: to people who've never done a franchise before, because ours
• 1:06
  Speaker 2: is really a purpose driven passion area where folks arrive
• 1:12
  Speaker 2: at their interest in School of Rock either having been
• 1:16
  Speaker 2: a parent of a student student themselves as an adult student.
• 1:19
  Speaker 2: They may have seen one of our bands perform, they
• 1:22
  Speaker 2: may be a fan of the movie and and come
• 1:25
  Speaker 2: across come across our franchise, so they'll reach out to us,
• 1:32
  Speaker 2: and there's there's a there's kind of a long dating process.
• 1:36
  Speaker 2: We want to find out the intent. We want to
• 1:41
  Speaker 2: understand if they're doing this for the right combinations of
• 1:46
  Speaker 2: changing the world and and doing something that's economically viable,
• 1:51
  Speaker 2: and then we step through a series of discussions that
• 1:53
  Speaker 2: can take weeks or even months to make sure that
• 1:56
  Speaker 2: the match is there. In some ways, it's really similar
• 2:00
  Speaker 2: to other franchise businesses. In other ways it's really different
• 2:04
  Speaker 2: because we are searching for people who have an equal
• 2:08
  Speaker 2: amount of an interest in return on effort as return
• 2:12
  Speaker 2: on investment. People are really looking to bend the universe
• 2:18
  Speaker 2: by transforming lives through music.
• 2:21
  Speaker 1: Okay, so let's assume I'm excited. What is the deal
• 2:26
  Speaker 1: I'm going to get with you? And is every deal
• 2:28
  Speaker 1: the same or is every deal unique?
• 2:31
  Speaker 2: Yeah, the deals are all the same. We've got standard
• 2:35
  Speaker 2: economics that have a initial franchise fee that's just under
• 2:40
  Speaker 2: fifty thousand dollars, and then the economics going forward, there's
• 2:45
  Speaker 2: the startup costs. There'll be the construction, they'll be build
• 2:49
  Speaker 2: out soft costs, architecture, et cetera, et cetera, to build
• 2:53
  Speaker 2: a unit that is physical unit, physical school about twenty
• 2:58
  Speaker 2: five hundred square feet, and then going forward, once that
• 3:05
  Speaker 2: school opens. The transactions are as follows, is that we
• 3:10
  Speaker 2: earn a eight percent royalty and we earn a three
• 3:13
  Speaker 2: percent brand fund that we spend on behalf the franchise ease,
• 3:18
  Speaker 2: on paid marketing, and on infrastructure, and then the rest
• 3:24
  Speaker 2: of the residual economics flow through to the franchise e.
• 3:27
  Speaker 2: And you know, many of our franchises choose to do
• 3:30
  Speaker 2: more than one, but about three quarters of our franchisese
• 3:34
  Speaker 2: are single unit franchisees and most are owner operators.
• 3:39
  Speaker 1: Let me ask you, I've always been interested same thing
• 3:41
  Speaker 1: with royalties in the music business. Okay, ultimately you're getting
• 3:45
  Speaker 1: the better part of ten percent. How do you make
• 3:48
  Speaker 1: sure you get your money?
• 3:50
  Speaker 2: Yeah, it's a it's a great question, and that's that's
• 3:53
  Speaker 2: a challenge for some franchises. For us, we have an
• 3:57
  Speaker 2: integrated point of sale system. We have a monthly subscription
• 4:01
  Speaker 2: for our services at the individual school level, so a
• 4:05
  Speaker 2: parent or an adult student will will kind of sign
• 4:11
  Speaker 2: up for renewing participation, hopefully in our performance program, which
• 4:16
  Speaker 2: I'm sure we'll talk about, and as those transactions happen,
• 4:22
  Speaker 2: the royalties are automatically dispersed to School of Rock, so
• 4:27
  Speaker 2: we don't really have any collections issues, and frankly, our
• 4:32
  Speaker 2: franchisees of such high integrity, I don't even imagine if
• 4:36
  Speaker 2: we were in a scenario where the technology wasn't our friend,
• 4:39
  Speaker 2: where we would've got a high degree of professionalism within
• 4:43
  Speaker 2: the community. But thankfully we don't have to face that
• 4:48
  Speaker 2: uncertainty because it all happens in an automated way.
• 4:52
  Speaker 1: Now, have any franchises gone billy up or has the
• 4:56
  Speaker 1: parent organization need to reclaim them?
• 5:00
  Speaker 2: We have had an extraordinary situation. You know, you will
• 5:04
  Speaker 2: typically see in most franchise systems that you will see
• 5:09
  Speaker 2: a meaningful number on a percentage basis, maybe three four
• 5:15
  Speaker 2: five percent of the system might fail in a given year.
• 5:20
  Speaker 2: We are well below one percent in our history, and
• 5:24
  Speaker 2: that's a source of extraordinary pride, especially given COVID. I mean,
• 5:28
  Speaker 2: COVID should have put us out of business entirely. So
• 5:34
  Speaker 2: we've only had a few circumstances where we've had where
• 5:39
  Speaker 2: we've had schools close their doors, and in many circumstances
• 5:45
  Speaker 2: where there is some concerns that a school has, they're
• 5:48
  Speaker 2: able to transfer it to another enthusiastic perspective franchise e,
• 5:53
  Speaker 2: and in some cases we've acquired schools, but we don't
• 5:56
  Speaker 2: typically acquire schools to operate that are not strong performers.
• 6:01
  Speaker 2: We like to buy schools that are great performers, that
• 6:06
  Speaker 2: we think have substantial upside potential. So I, you know,
• 6:12
  Speaker 2: knock on wood. I'm not sure if I'm in a
• 6:13
  Speaker 2: room with any real wood. But the thankfully, we have
• 6:17
  Speaker 2: not had the kinds of situations that many multi unit
• 6:21
  Speaker 2: operations have where we see periods or even averages of
• 6:27
  Speaker 2: meaningful reduction over time.
• 6:30
  Speaker 1: Okay, so you get someone who's interested, they have the money.
• 6:36
  Speaker 1: You know, when it comes to cost structure and a
• 6:38
  Speaker 1: successful business, location is very important. So to what did
• 6:43
  Speaker 1: we as a parent organization involved in location?
• 6:46
  Speaker 2: It's incredibly important and it's really good instinct that you
• 6:50
  Speaker 2: ask that because it's not obvious. You know, we think
• 6:53
  Speaker 2: when we were kids, you didn't think about visibility or
• 6:57
  Speaker 2: location for music lessons or youth and Richmond activities. It
• 7:00
  Speaker 2: was word of mouth and you'd hear it from your
• 7:02
  Speaker 2: neighbor or a church or synagogue or whatever. Get you
• 7:07
  Speaker 2: just get a hunch where to go for the things.
• 7:09
  Speaker 2: For kids today, locations really important. We provide a we
• 7:16
  Speaker 2: have a kind of preferred partnership with a national real
• 7:20
  Speaker 2: estate site selection firm that helps the franchisees facilitate the
• 7:27
  Speaker 2: selection the negotiation of their leases. They're not obligated to
• 7:33
  Speaker 2: use it. We don't participate in the economics, so we
• 7:36
  Speaker 2: can be an honest broker in regards to making that connection.
• 7:40
  Speaker 2: We approve each site, so we also use our own tools.
• 7:44
  Speaker 2: We've got a really really extensive statistical model that we
• 7:49
  Speaker 2: use that takes all the sites that we have today,
• 7:52
  Speaker 2: evaluates what makes them successful, and that gives us a
• 7:55
  Speaker 2: sense for where we should put a school in a
• 7:58
  Speaker 2: given part of a territory and even more specifically which
• 8:03
  Speaker 2: street or which shopping center based on the data that
• 8:06
  Speaker 2: we have. So we've got a lot of support for that.
• 8:09
  Speaker 2: And then of course there's always art to the sciences,
• 8:11
  Speaker 2: as you know, you know, the location is something that
• 8:15
  Speaker 2: a local entrepreneur, a local community member may know a
• 8:19
  Speaker 2: little bit more about than even a broker. They may
• 8:23
  Speaker 2: know what's happening from a residential development standpoint, they may
• 8:27
  Speaker 2: know where the schools are. And then those weird dynamics
• 8:30
  Speaker 2: where somebody may not drive past this highway because that's
• 8:33
  Speaker 2: just not where we drive or morning side of the street,
• 8:38
  Speaker 2: afternoon side of the street, et cetera. So we're very
• 8:41
  Speaker 2: very active in the selection or in the help of
• 8:45
  Speaker 2: the selection of the locations because we want these to
• 8:47
  Speaker 2: be of enduring value. We want them to be successful
• 8:51
  Speaker 2: for decades, not just for the next five years.
• 8:55
  Speaker 1: Okay, what are some of the criteria that make a
• 8:57
  Speaker 1: location successful.
• 9:00
  Speaker 2: Well, you know, we tend to focus in areas that
• 9:04
  Speaker 2: have combination the following attributes, high disposable income, high percentage
• 9:12
  Speaker 2: of kids, and where there's enough aggregate population to provide
• 9:22
  Speaker 2: you know, enough of a rich target set for just
• 9:24
  Speaker 2: enough people to populate the school. And then beyond that,
• 9:31
  Speaker 2: we always in the territory. Since we're performance based and
• 9:34
  Speaker 2: our real product is producing young performers. How that comes
• 9:38
  Speaker 2: to life is in venues. So we'll always look at
• 9:43
  Speaker 2: what the venue configuration is in a given territory and
• 9:47
  Speaker 2: make sure there's enough proximity and magnitude of venues. We're
• 9:51
  Speaker 2: huge fans of independent venue operators in part because we're
• 9:57
  Speaker 2: really dependent on strength of that community to make sure
• 10:03
  Speaker 2: that we've got these sweet spot sizes of the two hundred,
• 10:07
  Speaker 2: three hundred, four hundred seat venues. And so we take
• 10:12
  Speaker 2: that into consideration as well, and then it gets down
• 10:17
  Speaker 2: to really specific things bob visibility, co tenancy. We do
• 10:21
  Speaker 2: well as you can imagine near places like a Whole
• 10:24
  Speaker 2: Foods and where there's other things for mom to do.
• 10:32
  Speaker 2: Once she drops her young artist off at the school,
• 10:36
  Speaker 2: we want her to be in a position to go
• 10:37
  Speaker 2: do her thing, be convenient, come back when that kid's
• 10:41
  Speaker 2: a little more proficient and a little happier.
• 10:45
  Speaker 1: Okay, how many of the franchisees is this their primary
• 10:51
  Speaker 1: mode of income?
• 10:53
  Speaker 2: We don't have good data on that, so I can
• 10:56
  Speaker 2: only give you an anecdotal answer to it. Would suspect
• 11:00
  Speaker 2: that the majority it is, but I'm not certain that
• 11:05
  Speaker 2: it would be the vast majority. We have a mix
• 11:08
  Speaker 2: of both. And what's what's interesting is that I'm often asked,
• 11:13
  Speaker 2: is the success model in our franchise system single unit
• 11:17
  Speaker 2: or multi unit owner operator versus passive operation? And if
• 11:23
  Speaker 2: you map our units, we've got we've got schools in
• 11:27
  Speaker 2: every one of those categories, and we've examples where the
• 11:31
  Speaker 2: unit economics and the customer satisfaction are super high. So
• 11:37
  Speaker 2: the answer is that while it's most most is the case,
• 11:43
  Speaker 2: we are not exclusively focused on that because if you
• 11:46
  Speaker 2: can build a team as a investor or a more
• 11:51
  Speaker 2: passive operator, and build a team that has passion like
• 11:56
  Speaker 2: they're the they're the owners themselves, this can be a
• 11:59
  Speaker 2: very very very successful, more passive ownership model. We always
• 12:06
  Speaker 2: want the owner to be engaged. They should be there
• 12:09
  Speaker 2: at the shows. They should be making sure that the
• 12:12
  Speaker 2: facility and the culture and the core operations are excellent.
• 12:19
  Speaker 2: But I think that ultimately we're actually open to all
• 12:22
  Speaker 2: of the different models, which may be a little different
• 12:25
  Speaker 2: than some other franchise systems.
• 12:27
  Speaker 1: How much money can I make owning a school of rock?
• 12:31
  Speaker 2: Well, the good news is we have some data in
• 12:33
  Speaker 2: our in our franchise disclosure document. I always to be
• 12:38
  Speaker 2: careful because the FTC could you know, you can see
• 12:41
  Speaker 2: on zoom I'm short and a little stout, so stripes
• 12:45
  Speaker 2: wouldn't look so good at me on me. So but
• 12:49
  Speaker 2: what one of the benefits we have in our franchise
• 12:52
  Speaker 2: disclosure document is I can report out the profitability of
• 12:57
  Speaker 2: our corporate owned schools with great precision. And I think
• 13:01
  Speaker 2: this year we're going to be We're going to be
• 13:03
  Speaker 2: delivering kind of a twenty percent ebit DAH margin on
• 13:09
  Speaker 2: average unit volume that is well north at seven hundred
• 13:13
  Speaker 2: thousand dollars per unit, so that takes into consideration even
• 13:18
  Speaker 2: if we were if we were paying ourselves royalties, we
• 13:22
  Speaker 2: adjust that percentage as if we were franchisees. So I
• 13:26
  Speaker 2: always recommend, and this transcends music, Bob, you know, I
• 13:30
  Speaker 2: always recommend when folks are looking at franchise opportunities. If
• 13:35
  Speaker 2: the institution doesn't have any company owned schools or company
• 13:40
  Speaker 2: owned units, and you can't get precise economics, it's hard
• 13:45
  Speaker 2: to gauge the likely return on investment. And then further,
• 13:49
  Speaker 2: if you don't get good P and L information from
• 13:52
  Speaker 2: existing franchisees who are comfortable and enthusiastic to share, those
• 13:57
  Speaker 2: two things are probably a good sign that it's something
• 14:00
  Speaker 2: to stay away from. In our case, we have really
• 14:03
  Speaker 2: extensive economics in our own schools, the corporate run ones,
• 14:07
  Speaker 2: and our franchisees are very comfortable sharing the good and
• 14:11
  Speaker 2: the bad of being a School of Rock franchise. Thankfully,
• 14:15
  Speaker 2: we've had remarkable growth over the last six years, comping
• 14:21
  Speaker 2: double digits every year, and even when you take COVID
• 14:25
  Speaker 2: into account, we have an annual compound annual growth rate
• 14:30
  Speaker 2: of our ebit in the double digits, which is really
• 14:34
  Speaker 2: terrific for our schools.
• 14:36
  Speaker 1: Okay, let's say I've jumped through the hoops, I've signed
• 14:40
  Speaker 1: the agreement, I've found a location. Let's talk about physical
• 14:44
  Speaker 1: space that generally speaking, it's twenty five hundred or is
• 14:48
  Speaker 1: that the minimum? Does it vary? And once I get
• 14:51
  Speaker 1: the space, is there a specific blueprint such that every
• 14:55
  Speaker 1: school of rock I go in will be similar or
• 14:57
  Speaker 1: are they all completely different? Question?
• 15:00
  Speaker 2: You know, there are some non negotiables we want in
• 15:03
  Speaker 2: that space. The right number of rooms for lessons individual lessons,
• 15:10
  Speaker 2: but just as importantly, the right configuration of our rehearsal rooms.
• 15:15
  Speaker 2: So the magic of what we do are preparing these
• 15:17
  Speaker 2: kids to do real rock and roll gigs, and we
• 15:21
  Speaker 2: need a great back line, we need great acoustics, We
• 15:25
  Speaker 2: need a space that gives the feel and the configuration
• 15:28
  Speaker 2: of a stage environment. And so every school will have
• 15:33
  Speaker 2: a minimum number of lesson rooms, minimum number of drum
• 15:36
  Speaker 2: rooms specifically because those have unique dynamics, and then a
• 15:40
  Speaker 2: minimum number of rehearsal rooms. And then, believe it or not,
• 15:45
  Speaker 2: one of the most important parts of the design is
• 15:47
  Speaker 2: a student lounge. We're really trying to become that third
• 15:50
  Speaker 2: space for kids, you know, kind of where Starbucks serves
• 15:55
  Speaker 2: the adult population. We want them as they're transferring between
• 15:59
  Speaker 2: songs or on a break from a given song in
• 16:03
  Speaker 2: their rehearsal, sitting in the lounge, comparing notes, learning how
• 16:07
  Speaker 2: to interact with each other. Is a lot of what
• 16:09
  Speaker 2: we deliver is not just the musical proficiency. It's civics.
• 16:13
  Speaker 2: It's the lessons on how to socialize. So to put
• 16:17
  Speaker 2: that to get back to your specific question, we do
• 16:21
  Speaker 2: have a specific configuration, but we're really flexible. That can
• 16:26
  Speaker 2: be a square space, that can be long and narrow
• 16:29
  Speaker 2: or shallow and wide. It can be two floors, it
• 16:34
  Speaker 2: can be on the second floor of a shopping center.
• 16:39
  Speaker 2: But we do have minimum criteria and twenty five hundred
• 16:43
  Speaker 2: is our target. We've done less in highly urban locations.
• 16:49
  Speaker 2: You know, Palo Alto is a location under two thousand
• 16:53
  Speaker 2: square feet, one of our highest volume schools, but we
• 16:58
  Speaker 2: really like to be at that twenty five five hundred
• 17:00
  Speaker 2: square feets. Some of our schools choose to do their
• 17:02
  Speaker 2: own mini venue inside the school, and that might add
• 17:06
  Speaker 2: another five hundred to seven hundred and fifty square feet.
• 17:10
  Speaker 2: We don't require it.
• 17:10
  Speaker 1: Though, how many lesson room, how many drum rooms?
• 17:14
  Speaker 2: Yeah, we like to have you know, in the seven
• 17:17
  Speaker 2: to eight range lesson rooms and to have two drum rooms,
• 17:21
  Speaker 2: so those will be double kits, and then our rehearsal
• 17:25
  Speaker 2: rooms will have drum kits in them. And we actually
• 17:28
  Speaker 2: the rehearsal rooms will have the full back line, so
• 17:32
  Speaker 2: our rehearsal rooms will also serve as lesson rooms at
• 17:36
  Speaker 2: high capacity times. So so think about it as you know,
• 17:40
  Speaker 2: ten individual lesson spaces and typically three group rehearsal areas.
• 17:48
  Speaker 1: Okay, I've got the space, I've built it out, I've
• 17:51
  Speaker 1: got some furniture. Do I have to also purchase musical equipment?
• 17:56
  Speaker 2: Yeah, we help. You know, we've become a gear supply
• 18:00
  Speaker 2: over the last six years, which has been an area
• 18:02
  Speaker 2: of great passion and interest. So we've established relationships with
• 18:06
  Speaker 2: all the major gear players and what we do is
• 18:10
  Speaker 2: we provide a recommended list of gear for starting up
• 18:17
  Speaker 2: and really for staging the school for operation. School owners
• 18:24
  Speaker 2: are not required to buy through our resources. They typically
• 18:29
  Speaker 2: do because we get wholesale pricing on their behalf, so
• 18:32
  Speaker 2: they'll get that into wholesale pricing. Will help coordinate the shipment,
• 18:37
  Speaker 2: they'll get a couple of palettes in largely from the
• 18:40
  Speaker 2: same locations, so that helps as well. And then in
• 18:46
  Speaker 2: addition to that, since we have these wholesale arrangements, we
• 18:51
  Speaker 2: also can resell to students, so we might have you know,
• 18:57
  Speaker 2: I come from an old retail family, so there's the
• 19:00
  Speaker 2: phrase one to show, one to go, which may ring
• 19:02
  Speaker 2: a bell. You know. We have that kind of mentality
• 19:05
  Speaker 2: for key, high moving units like a starter pack, a
• 19:09
  Speaker 2: fender or epiphone starter pack or drum pad and sticks.
• 19:16
  Speaker 2: But we can get everything up to a Moog grandmother
• 19:21
  Speaker 2: if if our customers need it. And so yes, we
• 19:27
  Speaker 2: are a conduit for really really competitively priced gear. We
• 19:34
  Speaker 2: see that as a meaningful growth opportunity for us going forward.
• 19:39
  Speaker 1: What a local retailers in guitar center, major retailers say
• 19:43
  Speaker 1: about you going direct and cutting them.
• 19:44
  Speaker 2: Out, well, the reality is that you know the the
• 19:50
  Speaker 2: I will project how I feel about them, and I
• 19:54
  Speaker 2: hope they feel the same way about us. Which is
• 19:57
  Speaker 2: that so much about driving assumption and creating a new
• 20:02
  Speaker 2: player that will be a long term customer for any
• 20:05
  Speaker 2: of ours is about continuity of performance and continuity of commitment.
• 20:11
  Speaker 2: So in the short term. Is there a risk that
• 20:16
  Speaker 2: I'm going to cannibalize Guitar Center's fender starter pack? Well, yes,
• 20:22
  Speaker 2: there's a zero sum game for the initial buyer. But
• 20:27
  Speaker 2: you know the old joke, what's the right number of
• 20:29
  Speaker 2: guitars to buy? The answer is always is one more.
• 20:33
  Speaker 2: And ultimately, guitar Center has a really important role to play.
• 20:38
  Speaker 2: Sweetwater is a really important role to play. And since
• 20:43
  Speaker 2: we are meeting customers at different parts of that customer journey,
• 20:48
  Speaker 2: and since we're physically located in really really different places,
• 20:52
  Speaker 2: a guitar center can never be located where a school
• 20:55
  Speaker 2: of Rock is because it's hard to find thirty thousand
• 20:58
  Speaker 2: square feet on you know, the upper east side of
• 21:04
  Speaker 2: New York on seventy first, whereas we can get a
• 21:07
  Speaker 2: two thousand square foot location. I think the other thing
• 21:12
  Speaker 2: is that, you know, our view is that we play
• 21:17
  Speaker 2: a really important role where which is diminishing in all
• 21:23
  Speaker 2: the retail environments, which is very high touch, high consultative sale.
• 21:29
  Speaker 2: So we have the opportunity where we're spending three hours
• 21:33
  Speaker 2: with our students a week. Even guitar centers, most fervent
• 21:39
  Speaker 2: shoppers don't stay there for three hours a week, So
• 21:42
  Speaker 2: we have this incredible opportunity to really do that kind
• 21:47
  Speaker 2: of Hogwarts matching exercise where we help a student meet
• 21:55
  Speaker 2: it's their perfect guitar, bass, keyboard, microphone, et cetera. And
• 22:02
  Speaker 2: I think that's something we're in a unique position to
• 22:04
  Speaker 2: do when we're having that much continuity, because we have
• 22:08
  Speaker 2: mentors musicians themselves, and they can say, this is why
• 22:12
  Speaker 2: I play the Fender, this is why I pay play
• 22:14
  Speaker 2: this SG, this is why I choose gretch, And I
• 22:19
  Speaker 2: think that that's a role we earn a position to
• 22:21
  Speaker 2: uniquely play that. Having been said, no one likes competition,
• 22:26
  Speaker 2: I'm not. I don't. I'm mindful of the fact Guitar
• 22:30
  Speaker 2: Center teaches lessons and their music and Arts subsidiary teaches lessons.
• 22:37
  Speaker 2: But if they're doing a great job and lessons, that's
• 22:40
  Speaker 2: great for society. So in the grand scheme of things,
• 22:43
  Speaker 2: I'm okay with that.
• 22:51
  Speaker 1: Okay, In this transaction, in selling merchandise to the store
• 22:59
  Speaker 1: and to the customer, you are taking a spif you are.
• 23:04
  Speaker 1: This is a profit center, however minimal for the School
• 23:07
  Speaker 1: of Rock.
• 23:08
  Speaker 2: It's a profit center for our schools, and it's we
• 23:11
  Speaker 2: largely just cover our cost at the retail level. We've
• 23:16
  Speaker 2: chosen in the configuration of our economics, We've chosen to
• 23:21
  Speaker 2: participate the wholesale level, so we don't actually charge a
• 23:26
  Speaker 2: royalty in our sales uh to for franchisees. So we
• 23:30
  Speaker 2: want them to capture as much of the gross margin
• 23:33
  Speaker 2: as possible. And franchisees within the limits of map pricing,
• 23:40
  Speaker 2: which you're familiar with, you know, they are allowed to
• 23:44
  Speaker 2: have certain flexibility to h to charge and advertise promote
• 23:50
  Speaker 2: certain pricing. We want to preserve as much of that
• 23:53
  Speaker 2: margin for them as we can. So I don't see
• 23:56
  Speaker 2: for us the idea of massive EBITDA transformation valuation transformation
• 24:06
  Speaker 2: by becoming a conventional retail player. Rather, I want to
• 24:13
  Speaker 2: reduce the friction to make sure that we're the best,
• 24:16
  Speaker 2: high touch, customized matchmaker between a young artist and their needs.
• 24:23
  Speaker 2: By the way this applies to our teachers too, is
• 24:26
  Speaker 2: that our teachers are all gigging musicians. We want to
• 24:29
  Speaker 2: put the best gear in their hands, and we may
• 24:32
  Speaker 2: be the only way they're going to get their hands
• 24:33
  Speaker 2: on an American strat as opposed to a lesser model,
• 24:39
  Speaker 2: because we can get it to the meta price, it's much.
• 24:41
  Speaker 1: Lower Okay, so I'm opening a school of rock other
• 24:46
  Speaker 1: than the physical plant, how much am I going to
• 24:48
  Speaker 1: have to spend on equipment?
• 24:51
  Speaker 2: Our equipment tends to be in the sort of twenty
• 24:54
  Speaker 2: to twenty five thousand dollars range, and naturally, at retail
• 25:00
  Speaker 2: value that would be a much higher number. But we
• 25:03
  Speaker 2: tend to try to outfit the schools for everything they
• 25:06
  Speaker 2: need to operate in that zone in terms of gear.
• 25:11
  Speaker 2: In terms of gear, naturally there'll be things like soundproofing,
• 25:14
  Speaker 2: there'll be millwork, furniture, et cetera, et cetera, And depending
• 25:21
  Speaker 2: that's mostly driven by square footage, your buildout will be
• 25:25
  Speaker 2: directly proportional to square footage, and typically, you know, it'll
• 25:30
  Speaker 2: be a little over one hundred a little over one
• 25:33
  Speaker 2: hundred dollars per square foot to build out a school
• 25:37
  Speaker 2: of rock in terms of construction in some markets, that
• 25:40
  Speaker 2: can be up to one twenty one thirty.
• 25:42
  Speaker 1: Let's say I walk in the front door with my
• 25:44
  Speaker 1: parent and I'm sold, but I have no equipment. Is
• 25:49
  Speaker 1: there literally equipment in the store that I can buy
• 25:52
  Speaker 1: right that day or is it ordered? How do I
• 25:55
  Speaker 1: get the equipment in my hands?
• 25:57
  Speaker 2: In most cases, our schools that are committed to our
• 26:01
  Speaker 2: gear program, they'll have two or three of the fast
• 26:06
  Speaker 2: moving units in each instrument, so they'll have a starter
• 26:10
  Speaker 2: guitar pack, they'll have a starter based pack.
• 26:14
  Speaker 1: UH.
• 26:15
  Speaker 2: They typically wouldn't inventory keyboards because it's just such high
• 26:18
  Speaker 2: cube it's hard in a small space to keep those around.
• 26:23
  Speaker 2: They certainly will have drums, drum sticks and UH and
• 26:30
  Speaker 2: practice pads and practice pads thank you. And then we'll
• 26:34
  Speaker 2: have mic and amp solutions, starting solutions with partners like
• 26:40
  Speaker 2: Shore who are who are great partners. That having been said,
• 26:49
  Speaker 2: many of our students start their journey before selecting their instrument,
• 26:54
  Speaker 2: and we're very very much in favor of that. So
• 26:58
  Speaker 2: our our way in by our little or we call
• 27:01
  Speaker 2: our Little Wing program our Rookies program. This is a
• 27:04
  Speaker 2: group learning environment where we're giving them the opportunity to
• 27:10
  Speaker 2: speed date with a range of instruments, so they may
• 27:14
  Speaker 2: come in with a bias to pick their forever instrument.
• 27:19
  Speaker 2: But we think that's actually one of the things that
• 27:21
  Speaker 2: has impeded success in music education is leaping too quickly
• 27:28
  Speaker 2: to an instrument that ends up not being the right
• 27:31
  Speaker 2: one emotionally or physically for the student. So it's a
• 27:36
  Speaker 2: very rare circumstance where immediately someone comes in and they
• 27:40
  Speaker 2: don't have an instrument and they need it immediately. But
• 27:43
  Speaker 2: when we do, we can get it with great haste.
• 27:46
  Speaker 1: Let's say that you know, I'm a dedicated student. Are
• 27:51
  Speaker 1: you selling strings, straps picks that kind of stuff?
• 27:55
  Speaker 2: We are? We are, And that's pretty universally provided all
• 28:00
  Speaker 2: of our schools and again comes through the same supply
• 28:03
  Speaker 2: chain for us. And you know another one that's great
• 28:07
  Speaker 2: for us we're really proud of is hearing protection. Huge area.
• 28:11
  Speaker 2: We try to make sure every one of our kids
• 28:16
  Speaker 2: from the very get go understands the importance of it.
• 28:19
  Speaker 2: And in our rehearsal rooms we require hearing protection as
• 28:23
  Speaker 2: a mandatory item. So we'll also sell some really good
• 28:26
  Speaker 2: brands like Erasers in our schools.
• 28:30
  Speaker 1: Okay, I'm down the line, I signed my agreement, I
• 28:34
  Speaker 1: have my equipment, I've built out my space. What do
• 28:39
  Speaker 1: I do for personnel? How many people do I need?
• 28:42
  Speaker 1: What kind of structure, what kind of payment? Where do
• 28:45
  Speaker 1: I find them?
• 28:46
  Speaker 2: Yeah, it's the most important question because the software of
• 28:52
  Speaker 2: our business makes or breaks it. We don't have a
• 28:56
  Speaker 2: complex technological footprint, we don't have a complex lex build out.
• 29:01
  Speaker 2: It's got its uniqueness with sound attenuation, but the software
• 29:05
  Speaker 2: the people is really really important. The beauty of our
• 29:10
  Speaker 2: model is that we favor gigging musicians as our staff members.
• 29:15
  Speaker 2: We don't favor necessarily folks who have ten years fifteen
• 29:22
  Speaker 2: years in traditional music instruction because we are upending the
• 29:28
  Speaker 2: model of music instruction. We want happier kids who stay
• 29:33
  Speaker 2: with their instruments longer, that have the subsidiary benefits of
• 29:37
  Speaker 2: learning not just music but how to perform. And so
• 29:42
  Speaker 2: as you probably know, you know, you don't have to
• 29:45
  Speaker 2: go you don't have to go beyond your local Starbucks
• 29:48
  Speaker 2: to find a you know, proficient gigging musicians. And so
• 29:54
  Speaker 2: there's a high degree of supply in all major markets
• 29:58
  Speaker 2: in the world of people who are passionate musicians. And
• 30:03
  Speaker 2: depending on the age of the student, the level of
• 30:06
  Speaker 2: proficiency can range. So to your quantitative questions, school might
• 30:13
  Speaker 2: have twenty people on the payroll, most of those are
• 30:15
  Speaker 2: part time. There may be only one full time salary
• 30:20
  Speaker 2: team member as a general manager. And in an owner
• 30:23
  Speaker 2: operator school, that might be the owner, and there'll be
• 30:28
  Speaker 2: a music director that will be somebody who's more advanced
• 30:32
  Speaker 2: in terms of teaching and their organization skills and their
• 30:36
  Speaker 2: leadership skills. They really administer the pool of instructors. And
• 30:43
  Speaker 2: then we'll typically have one or two administrative staff who
• 30:47
  Speaker 2: are greeting people as they come in, helping navigate leads,
• 30:51
  Speaker 2: giving tours, administering billing, et cetera, et cetera. So it's
• 30:57
  Speaker 2: a really good compliment to the gigacon to me for
• 31:00
  Speaker 2: real gigging musicians. And so the first hire is typically
• 31:06
  Speaker 2: if you're an owner operator, is hiring that really really
• 31:10
  Speaker 2: well networked, well connected, very responsible music director. You bring
• 31:16
  Speaker 2: them on board a couple of months before opening, and
• 31:20
  Speaker 2: then they're usually so plugged into the local community they
• 31:24
  Speaker 2: can be the trojan horse to get us the amazing
• 31:29
  Speaker 2: talent to come in. And we've got a very methodical
• 31:32
  Speaker 2: curriculum and technology tools to make it really easy for
• 31:37
  Speaker 2: people who've never taught before to be incredibly successful music instructors.
• 31:43
  Speaker 1: You know, as an instructor, not as the person who's
• 31:45
  Speaker 1: an overseer manager. How much money am I going to make?
• 31:50
  Speaker 2: Well, we're we tend to be in the space which
• 31:53
  Speaker 2: is north of what they would get in the service economy,
• 31:59
  Speaker 2: and so both of what they would get as individual teachers,
• 32:04
  Speaker 2: so you might see you know, I can't give a
• 32:08
  Speaker 2: precise number because our franchisees economics aren't necessarily obvious to us,
• 32:16
  Speaker 2: but will typically be in the high teens early twenties
• 32:20
  Speaker 2: on an hourly rate. That'll differ in different markets naturally,
• 32:24
  Speaker 2: because you go to a Greenwich, Connecticut, it will be
• 32:26
  Speaker 2: very different than a Lubbock, Texas, where we have schools
• 32:30
  Speaker 2: in both of those markets. But we tend to be
• 32:33
  Speaker 2: very competitive with what musicians part time jobs can provide
• 32:42
  Speaker 2: to them. And then some schools also provide incentives and
• 32:49
  Speaker 2: bonus bonuses to the instructors that can increase their comp
• 32:56
  Speaker 2: if they're doing a show, if they're one of our
• 32:59
  Speaker 2: show directors, they may get a bonus for that, they
• 33:02
  Speaker 2: may get a bonus for retention, et cetera, et cetera.
• 33:04
  Speaker 2: We like to see that, but that varies quite a
• 33:07
  Speaker 2: bit through the system. But we don't target. We don't
• 33:11
  Speaker 2: compete against the price or the cost or the income
• 33:16
  Speaker 2: that a private instructor would have. For very practical reasons,
• 33:21
  Speaker 2: we're taking all of the administrative complexity, all of the liability,
• 33:26
  Speaker 2: all of the operational distractions, the scheduling, even the place,
• 33:33
  Speaker 2: the gear and the lead getting part off the shoulders
• 33:40
  Speaker 2: of the individual instructors. So we do see quite a
• 33:43
  Speaker 2: few traditional instructors who pursue coming aboard School of Rock,
• 33:48
  Speaker 2: but we're not dependent on that cohort as a source
• 33:53
  Speaker 2: of labor for us.
• 33:55
  Speaker 1: Okay, what's the life span of an employee.
• 34:01
  Speaker 2: Well, we have probably about half the churn of conventional retail,
• 34:11
  Speaker 2: so we we have since we have tend to have
• 34:14
  Speaker 2: younger team members. We team we have team members who
• 34:20
  Speaker 2: are touring, going out on tour. As a matter of course,
• 34:24
  Speaker 2: we'll understand that and we'll accommodate that. We will see
• 34:29
  Speaker 2: probably an average lifetime, an average life cycle for you know,
• 34:34
  Speaker 2: seven to nine months of a given team member. That
• 34:38
  Speaker 2: differs dramatically whether it's a general manager or a frontline
• 34:42
  Speaker 2: instructor or one of our administrative team members. But that
• 34:46
  Speaker 2: would be a good bogie. And since our students are
• 34:53
  Speaker 2: so keyed into our two hour rehearsal each week, where
• 34:58
  Speaker 2: the attachment it's to the brand and to the band
• 35:03
  Speaker 2: and to the goal of the show, it's not catastrophic
• 35:07
  Speaker 2: to us when one of our team members has the
• 35:09
  Speaker 2: opportunity to go tour that we don't have to be
• 35:13
  Speaker 2: agonizing about them. Departing always requires good succession management. You
• 35:18
  Speaker 2: want to make sure you're not leaving your kids high
• 35:20
  Speaker 2: and dry. But it's not uncommon for one week a
• 35:24
  Speaker 2: different instructor to come in and our kids tend to
• 35:27
  Speaker 2: really dig that because they'll say, hey, this is real
• 35:29
  Speaker 2: jazz oriented bass player. I'm learning a completely different side
• 35:35
  Speaker 2: of the instrument. So but thankfully, even though we do
• 35:41
  Speaker 2: largely compete with hospitality, we have much better retention of
• 35:44
  Speaker 2: our team members because it's a community for them too.
• 35:49
  Speaker 2: This is a place where they're going to be with
• 35:51
  Speaker 2: other musicians and other really purpose driven team members.
• 35:55
  Speaker 1: Okay, I'm building out. To what degree is sound reinforce
• 36:00
  Speaker 1: meaning deadening, et cetera. Or neighbors complaining? Is this an issue?
• 36:05
  Speaker 2: It's one of It is the most important topic on
• 36:09
  Speaker 2: the build out. It's less important if you have a
• 36:12
  Speaker 2: standalone unit, but if you're in the middle of a
• 36:15
  Speaker 2: shopping center. We deploy a lot of expertise. We have
• 36:21
  Speaker 2: relationships with vendors. We even have consultants on on on
• 36:27
  Speaker 2: call who have now helped dozens and dozens scores even
• 36:34
  Speaker 2: of schools navigate through specific issues and those can be
• 36:40
  Speaker 2: everything from how sound travels through an air conditioning unit
• 36:45
  Speaker 2: to raised floors. But we have in our design guidelines
• 36:51
  Speaker 2: super specific recommendations in terms of double drywall and green
• 36:55
  Speaker 2: glue and and uh. And then we have certain requirements,
• 37:01
  Speaker 2: and then we have certain nice to haves that we
• 37:03
  Speaker 2: give our franchisees the opportunities to navigate through. We've been
• 37:07
  Speaker 2: really lucky in that now. It wasn't always like this,
• 37:11
  Speaker 2: but now we're in a situation where we know how
• 37:14
  Speaker 2: to mitigate the sound, and we know how to administer
• 37:18
  Speaker 2: the relationship with the landlords and neighbors so that it's
• 37:22
  Speaker 2: not contentious. Some of it is even setting explicit decibel requirements,
• 37:28
  Speaker 2: which is we will commit to not being above this
• 37:31
  Speaker 2: level of sound that'll be well below with municipal limits
• 37:36
  Speaker 2: are But yeah, it's a big It's the only really
• 37:39
  Speaker 2: complex part of our construction is sound attenuation. The rest
• 37:44
  Speaker 2: is drywall, framing, carpeting, painting, electrical plumbing, very standard stuff.
• 37:50
  Speaker 1: Okay, I've jumped through all the hoops, signed the agreement,
• 37:53
  Speaker 1: built out, have a staff, have the sign on the door.
• 37:56
  Speaker 1: How do I start the business?
• 37:59
  Speaker 2: Well, well, you ask a question that almost need to
• 38:04
  Speaker 2: challenge the premise, which is that our view is the
• 38:07
  Speaker 2: business starts the day you sign the agreement. And that's
• 38:11
  Speaker 2: been one of the things that's been a transformation for
• 38:13
  Speaker 2: us is that the marketing and the community relationship that
• 38:19
  Speaker 2: you can establish anticipating opening is really rich. So what
• 38:24
  Speaker 2: we always ask our franchisees to do is immediately stop
• 38:30
  Speaker 2: start mapping your community. Map, the schools map, the mom's clubs, map,
• 38:35
  Speaker 2: the local activities like art box and farmers' markets. Get
• 38:44
  Speaker 2: to know businesses that are going to be adjacent to you,
• 38:47
  Speaker 2: because sometimes they'll be your first students. Your landlord often
• 38:51
  Speaker 2: will have a child they want to send him to
• 38:54
  Speaker 2: School of Rock. That's a great place to start. And
• 38:56
  Speaker 2: so what we always try to do is actually have
• 39:01
  Speaker 2: twenty or thirty students pre enrolled, so unlike a lot
• 39:04
  Speaker 2: of franchises, we actually try to start off with revenue
• 39:08
  Speaker 2: from day one, and so now beyond that we are
• 39:18
  Speaker 2: doing the way to think about it is that we
• 39:21
  Speaker 2: run at the corporate level the air war for our franchisese.
• 39:25
  Speaker 2: We'll do digital, paid and earned media, We'll do seasonal campaigns,
• 39:32
  Speaker 2: and we'll do always on campaigns, will do very very
• 39:35
  Speaker 2: sophisticated prospecting and targeting on our individual school's behalf, but
• 39:41
  Speaker 2: we're counting on the franchisees and the local company school
• 39:45
  Speaker 2: teams to do the ground warfare, which is we want
• 39:49
  Speaker 2: them to be everything from that a frame outside of
• 39:52
  Speaker 2: the school to the lights coming out from the school,
• 39:56
  Speaker 2: to setting up that table with what we call the
• 39:58
  Speaker 2: instrument petting zoo at the children's festival, or you know,
• 40:04
  Speaker 2: going to the art walk and having your kids play
• 40:09
  Speaker 2: at the event. That's really where the source of leads are.
• 40:15
  Speaker 2: And we've have very very precise mechanics of doing our
• 40:21
  Speaker 2: lead gathering, so we know at any time how well
• 40:25
  Speaker 2: situated a school is for longer term success based on
• 40:30
  Speaker 2: their lead flow and their conversion dynamics. We do that
• 40:34
  Speaker 2: very scientifically.
• 40:36
  Speaker 1: I know everybody enters the program in a different fashion,
• 40:39
  Speaker 1: but let's start with some examples. I walk in the
• 40:42
  Speaker 1: front door. That's it, no pre existing relationship.
• 40:47
  Speaker 2: What happens, well, naturally, somebody who walks in the door
• 40:52
  Speaker 2: probably has self selected that they're interested in music education.
• 40:55
  Speaker 2: So it's a circumstance where we don't have to convince
• 40:58
  Speaker 2: them about what class of trade we're in. The very
• 41:03
  Speaker 2: first thing we begin to explain before we do the
• 41:06
  Speaker 2: tour is we're performance based music education. So if you're
• 41:11
  Speaker 2: looking for lessons only, we might recommend you go someplace else.
• 41:17
  Speaker 2: And we think that the efficacy of our model is
• 41:21
  Speaker 2: so much better that we don't want to clog it
• 41:25
  Speaker 2: up with folks who are interested in just the most
• 41:28
  Speaker 2: conventional weekly lesson where they're you know, the it's practice
• 41:34
  Speaker 2: with the hope someday of something like a recital. So
• 41:37
  Speaker 2: at the very first part of that conversation, we're saying,
• 41:40
  Speaker 2: here's who we are. What we are is that we're
• 41:43
  Speaker 2: going to have a transformational experience for your kid, typically,
• 41:48
  Speaker 2: and that transformational experience is anchored in them joining a
• 41:53
  Speaker 2: band and joining the Zeppelin Show or the Green Day Show,
• 41:58
  Speaker 2: or the Women in Rock Shaw or the Blue Origin
• 42:02
  Speaker 2: of the Blues show that's enrolling right now. We're casting
• 42:06
  Speaker 2: right now for that show. The show is going to
• 42:08
  Speaker 2: be in three months. We'd love to have your kid,
• 42:11
  Speaker 2: if they're already doing music, already having some functional capability,
• 42:17
  Speaker 2: and we'll give you weekly lessons as part of that.
• 42:20
  Speaker 2: That's really how it begins. And then we take them
• 42:24
  Speaker 2: around the school and we show them how the physical
• 42:27
  Speaker 2: facility delivers that to them in an incredibly immersive environment.
• 42:34
  Speaker 2: Typically they'll be seeing a rehearsal going on or an
• 42:37
  Speaker 2: individual lesson going on. They'll get to see the happy
• 42:40
  Speaker 2: kids bouncing around the school, and they'll get to do
• 42:45
  Speaker 2: a trial lesson where they get the experience of what's
• 42:48
  Speaker 2: our teaching method, and then we'll show them our curriculum.
• 42:53
  Speaker 2: Depending on the musical ability of its parent, they may
• 42:57
  Speaker 2: have a model in their head of how they earned
• 43:00
  Speaker 2: the Alba books or how entered books. We have our
• 43:04
  Speaker 2: own curriculum which we think is really differentiated and that
• 43:07
  Speaker 2: really blows people away when we show them the physical
• 43:10
  Speaker 2: and the digital parts of our curriculum. And honestly, Bob,
• 43:15
  Speaker 2: when we can get a prospective student in the school,
• 43:19
  Speaker 2: we have an amazing hit rate of convincing people that
• 43:23
  Speaker 2: this is something unlike, certainly unlike they had when they
• 43:27
  Speaker 2: were kids.
• 43:29
  Speaker 1: Now.
• 43:29
  Speaker 2: A different scenario is when we have a really novice
• 43:33
  Speaker 2: player and there we introduce them, depending on their age,
• 43:37
  Speaker 2: to either our little Wing program which is sort of
• 43:40
  Speaker 2: four to six or our Rookies program, which is more
• 43:44
  Speaker 2: like the six to eight year old level. But again
• 43:48
  Speaker 2: we're working them towards enrolling in the performance program and
• 43:54
  Speaker 2: being ready to get out on stage as soon as possible.
• 44:04
  Speaker 1: Okay, so what is your teaching method?
• 44:07
  Speaker 2: So it starts in reverse. So when you and I,
• 44:14
  Speaker 2: you know, we're exposed to music as kids. I was
• 44:17
  Speaker 2: a keyboard player and my teacher was missus van Acker
• 44:24
  Speaker 2: rest her soul, a wonderful woman who was very dedicated,
• 44:30
  Speaker 2: and I trained classically. As many of the listeners, I
• 44:34
  Speaker 2: think that would be their experience, and it was skill first,
• 44:42
  Speaker 2: So building up and basically saying you're going to learn
• 44:45
  Speaker 2: grammar before I sent you into conversation, and we're certainly
• 44:50
  Speaker 2: not going to put you in a room of other
• 44:52
  Speaker 2: people speaking until we're absolutely certain that you are articulate
• 44:57
  Speaker 2: and you know the letter names and you know the
• 45:00
  Speaker 2: parts of speech, et cetera, et cetera. That is one
• 45:04
  Speaker 2: way to learn. It happens to be in contradiction to
• 45:08
  Speaker 2: virtually everything else we learn, though. It's not how we
• 45:11
  Speaker 2: learn sports, it's not how we learn socialization, it's not
• 45:15
  Speaker 2: how we learn to speak. So we have the reverse.
• 45:22
  Speaker 2: So our curriculum starts song first, and what we do
• 45:27
  Speaker 2: is that we build with the show that a kid
• 45:31
  Speaker 2: will then roll. Imagine fifteen kids. Sixteen kids in a
• 45:34
  Speaker 2: show season, and they're doing their weekly rehearsal and they're
• 45:37
  Speaker 2: cast on songs, and we cast them on the songs
• 45:40
  Speaker 2: using a database of our songs where we know the
• 45:44
  Speaker 2: level by instrument of that song. So we have a
• 45:48
  Speaker 2: very proprietary tool where we can take a level one
• 45:53
  Speaker 2: bass player and put them on a song with a
• 45:56
  Speaker 2: level five guitar player and they can coexist. And then
• 46:02
  Speaker 2: what we do is that we have in the same
• 46:05
  Speaker 2: massive database of these songs in our shows, we have
• 46:10
  Speaker 2: the skills that map to those songs. So a great
• 46:15
  Speaker 2: you know, great examples thunderstruck, you know that tune. The
• 46:20
  Speaker 2: last thing you want to do is talk about music
• 46:22
  Speaker 2: theory when you're teaching a kid thunderstruck. You just want
• 46:26
  Speaker 2: them to jam out. But what it gives us the
• 46:29
  Speaker 2: opportunity to do in the individual lesson is to say, hey,
• 46:32
  Speaker 2: you know that guitar solo. Did you know that's in
• 46:35
  Speaker 2: mix olidian mode? And they'll say, well, what's that? And
• 46:40
  Speaker 2: then we'll teach them mix Olidian mode, and for their
• 46:43
  Speaker 2: entire life, when they hear that configuration of notes, they'll
• 46:47
  Speaker 2: know mix Olidian mode much more so than somebody who's
• 46:51
  Speaker 2: taught the mode before they're taught to play the mode.
• 46:55
  Speaker 2: And so that's a really geeky music theory way to
• 46:58
  Speaker 2: answer the question. But we start with the show, to
• 47:02
  Speaker 2: the song, to the skill, and then our app reinhorses
• 47:07
  Speaker 2: those skills and maps it for the student's use to
• 47:12
  Speaker 2: preparing them for the show. So it's it's we sneak
• 47:17
  Speaker 2: the kids the music theory, the notation, the technique, but
• 47:23
  Speaker 2: it's all in service of their curiosity because they want
• 47:25
  Speaker 2: to just jam better. They feel a sense of group accountability,
• 47:30
  Speaker 2: and we think it's so incredibly novel in music, partially
• 47:35
  Speaker 2: because it's so universal in everything else. That's how you
• 47:38
  Speaker 2: and I learned to talk.
• 47:41
  Speaker 1: Okay, I'm convinced I signed up. I would think that
• 47:47
  Speaker 1: my first meeting is with my teacher. So let's just
• 47:52
  Speaker 1: assume I have some skill. I'm not a complete Okay, yeah, okay,
• 47:56
  Speaker 1: I meet with a teacher. What goes down in that lesson.
• 48:00
  Speaker 2: Well, it may be that your first meeting is with
• 48:03
  Speaker 2: your band, so you may actually have your rehearsal first,
• 48:07
  Speaker 2: but in either case, typically in rapid succession, you're going
• 48:11
  Speaker 2: to meet with an instructor who's really well equipped to
• 48:14
  Speaker 2: teach your level of your instrument, and you'll be signing
• 48:17
  Speaker 2: up for a show. So part of the choice for
• 48:21
  Speaker 2: customers what shows you doing this season, And that'll be
• 48:25
  Speaker 2: a little bit of a matchmaking because we'll have certain
• 48:29
  Speaker 2: needs still in given shows where it's easier to cast
• 48:33
  Speaker 2: that instrument, and then others may be more fall But
• 48:36
  Speaker 2: let's say they choose to be part of the pop
• 48:40
  Speaker 2: punk show, so they want to do you know some
• 48:43
  Speaker 2: forty one and Green Day, and we're casting for that show.
• 48:49
  Speaker 2: We've got a great role. So within a couple of
• 48:52
  Speaker 2: days they'll spend they'll have a thirty or forty five
• 48:54
  Speaker 2: minute lesson with their teacher, talk about their goals, do
• 49:01
  Speaker 2: a little bit of demonstration, which is just let's see
• 49:04
  Speaker 2: how you hold your instrument or how you navigate at
• 49:09
  Speaker 2: your vocal instrument. Let's see your technique. So the first
• 49:14
  Speaker 2: lesson typically is an assessment just where do you stand?
• 49:17
  Speaker 2: But that second lesson, Bob, they're supporting that student's proficiency
• 49:23
  Speaker 2: and technique to be ready to rock on stage. It
• 49:27
  Speaker 2: is all about preparing the songs for the show. Now,
• 49:31
  Speaker 2: we'll have circumstances if a kid's actually auditioning for Berkeley,
• 49:35
  Speaker 2: or if a kid wants to get into jazz band
• 49:37
  Speaker 2: at their school, will help the kid with any of
• 49:42
  Speaker 2: those tasks. But the lesson really is about reinforcing the
• 49:46
  Speaker 2: repertoire that they're working on for the show, and that
• 49:51
  Speaker 2: I really think that starts at lesson number two. Lesson
• 49:54
  Speaker 2: number one is just getting to know you session.
• 49:56
  Speaker 1: Will I end up knowing how to read music.
• 50:01
  Speaker 2: If you want to, we will, as I always qualify
• 50:05
  Speaker 2: that because there are some students who choose not to
• 50:10
  Speaker 2: learn that way. There are some students who can't learn
• 50:12
  Speaker 2: that way. But we are equipped and we are very
• 50:17
  Speaker 2: dedicated for all of our students not only knowing how
• 50:21
  Speaker 2: to read music, but we also want them to read
• 50:23
  Speaker 2: tablature where it applies. We want them, if they're vocalists,
• 50:28
  Speaker 2: to do be able to do solveggio. We want them
• 50:31
  Speaker 2: to know at least the basics of music theory. And
• 50:38
  Speaker 2: so I you know, I'm very passionate about this as
• 50:42
  Speaker 2: a trained musician. Most of our leadership team or trained musicians.
• 50:46
  Speaker 2: We don't want to be a casual educator of music.
• 50:55
  Speaker 2: We want to be accessible, but we don't want to
• 50:57
  Speaker 2: be casual to lower the friction increase retention, but we
• 51:03
  Speaker 2: don't want to do it at the expense of not
• 51:05
  Speaker 2: giving people nutrients musically. So our goal is for every
• 51:10
  Speaker 2: one of our students to be able to read notation
• 51:13
  Speaker 2: and do a lot more than that, and our curriculum
• 51:16
  Speaker 2: has that explicitly as part of the mechanics. We have
• 51:21
  Speaker 2: twenty five method books, we have hundreds and hundreds of
• 51:24
  Speaker 2: exercises in our app and they all build to musical literacy,
• 51:32
  Speaker 2: musical proficiency, technique, music theory.
• 51:35
  Speaker 1: Let's just say I walk in, I have a starter
• 51:39
  Speaker 1: Fender guitar. I can play all the basic chords A
• 51:44
  Speaker 1: through G, maybe A minor, E minor. What's going to
• 51:48
  Speaker 1: happen in the lesson? I realize we're building towards the show,
• 51:52
  Speaker 1: But is that is the teacher just going to say, well,
• 51:54
  Speaker 1: this is the lead, you have to play and teach
• 51:56
  Speaker 1: me how I mean, what's going to happen?
• 51:58
  Speaker 2: It's always a mix because and again let's let's uh,
• 52:02
  Speaker 2: let's use a scenario, which is that's actually an incredibly
• 52:06
  Speaker 2: appropriate scenario for me. You just described my guitar proficiency.
• 52:10
  Speaker 2: Sadly I don't have the same proficiency and guitars as keyboard.
• 52:15
  Speaker 2: So when when someone like me will go in hopefully
• 52:21
  Speaker 2: we'll join the adult band. And of course you'll be
• 52:25
  Speaker 2: working towards those dimensions, but in every circumstance you're stopping
• 52:31
  Speaker 2: on the theoretical component to linger on developing that, which
• 52:35
  Speaker 2: is that, Uh, you're going to be playing a song
• 52:39
  Speaker 2: with the pentatonic scale. That's the source of all blues scales,
• 52:43
  Speaker 2: all basically almost every blues, every guitar solo on the
• 52:47
  Speaker 2: planet in a popular song. So what the teacher will
• 52:51
  Speaker 2: do is linger on that and also give you an
• 52:53
  Speaker 2: exercise for the the different shapes of the pentatonic scale
• 52:58
  Speaker 2: on the fret board, and that may be the exercise
• 53:01
  Speaker 2: you're assigned for the next week as you're working on
• 53:05
  Speaker 2: honky Tonk women, So they'll be complementary, but it won't
• 53:11
  Speaker 2: necessarily be entirely enveloped or enveloped I should say by
• 53:17
  Speaker 2: the song. There's also about teaching the skill that the
• 53:22
  Speaker 2: song introduces, but not limiting the song's application to it.
• 53:26
  Speaker 2: So you may say, Okay, the first things that you're
• 53:29
  Speaker 2: going to work on for the next few weeks is
• 53:31
  Speaker 2: mastering being able to do the pentatonic scale without looking
• 53:34
  Speaker 2: at the fret board. Which is about as far as
• 53:37
  Speaker 2: I've gotten by.
• 53:38
  Speaker 1: Okay, yeah, every all of us who took lessons at
• 53:42
  Speaker 1: our younger age. There's the lesson and then there's practicing,
• 53:47
  Speaker 1: and many people don't practice. How do you deal with that?
• 53:53
  Speaker 2: Well, first and foremost, the one thing that's great about
• 53:55
  Speaker 2: the performance based program is they're going to have two
• 53:58
  Speaker 2: hours of practice every day week, which on average is
• 54:02
  Speaker 2: more than the average child practices. So if they're in
• 54:05
  Speaker 2: the rehearsal and they're playing their songs in the rehearsal
• 54:10
  Speaker 2: in preparation for the show, they're going to have practical
• 54:13
  Speaker 2: and and mentored practicing sessions because you're going to have
• 54:17
  Speaker 2: the show director saying, hey, listen, you know you really
• 54:22
  Speaker 2: need to hit the fret board here or on the keyboard.
• 54:25
  Speaker 2: You know you you're you're just naturally doubling the bass.
• 54:29
  Speaker 2: We don't need you to do that, or try this
• 54:33
  Speaker 2: finger construction, or watch the form on on your you're
• 54:37
  Speaker 2: playing a little more of a barado there, stand up straighter,
• 54:41
  Speaker 2: et cetera. But in addition to that, the only way
• 54:45
  Speaker 2: to accomplish a breakthrough in that job is to make
• 54:48
  Speaker 2: it more fun. It is as simple as that is
• 54:51
  Speaker 2: that We have variations of levels of commitment within our students.
• 54:57
  Speaker 2: That exists everywhere, but we love where the friction to
• 55:01
  Speaker 2: practicing so much by making it fun. One is you're
• 55:06
  Speaker 2: doing accessible music. You're doing music that you're going to
• 55:10
  Speaker 2: get the reinforcement of. It's not that I don't love
• 55:12
  Speaker 2: the Pathetique sonata. I do, and I can play it,
• 55:16
  Speaker 2: and it was fun to work to play it. But
• 55:20
  Speaker 2: it's not like I'm going to go to my friends
• 55:22
  Speaker 2: and say, oh, you wouldn't believe I know how to
• 55:24
  Speaker 2: play the Pathetique sonata. So I think a lot of
• 55:29
  Speaker 2: it is just the reinforcement of accessible, contemporary popular music,
• 55:35
  Speaker 2: but a lot of it's actually the functioning of our app.
• 55:38
  Speaker 2: So our app is game like. So when a kid
• 55:41
  Speaker 2: is working on either an exercise let's say that pentatonic scale,
• 55:45
  Speaker 2: or working on the base part to wagon wheel, both circumstances,
• 55:53
  Speaker 2: in our app, we have this interactive capability where the
• 55:57
  Speaker 2: app will tell you how you did on pitch rhythm,
• 56:01
  Speaker 2: It'll give you a grade or a score I should say.
• 56:06
  Speaker 2: And what that does is create this kind of fun
• 56:11
  Speaker 2: gamification of practicing. But it's low stakes, it's low risk,
• 56:16
  Speaker 2: it's not failing. In fact, you don't have to submit
• 56:20
  Speaker 2: your exercise until you're happy with it, and so kids
• 56:24
  Speaker 2: will try to perform. And so what we've tried to
• 56:28
  Speaker 2: do is really gather the best of what we see
• 56:31
  Speaker 2: in gaming, massive multiplayer gaming, and say how do we
• 56:35
  Speaker 2: create this energy to make practicing fun by design.
• 56:40
  Speaker 1: Then I think the.
• 56:41
  Speaker 2: Third piece is listen, you're working towards a show with
• 56:44
  Speaker 2: other kids. You want to be ready. So I think
• 56:47
  Speaker 2: there is a little bit of additional motivation that is
• 56:51
  Speaker 2: much more powerful than tell your teachers or your parents
• 56:56
  Speaker 2: wagging their fingers.
• 56:57
  Speaker 1: At you, Okay, I have my lesson, I go home.
• 57:03
  Speaker 1: You're saying, it's not like the old days where I'm alone,
• 57:06
  Speaker 1: that all of my practice is engaged with an app
• 57:10
  Speaker 1: or something else.
• 57:12
  Speaker 2: Yeah, yeah, so our app is your We think of
• 57:15
  Speaker 2: the app as the sinew between the lesson and the
• 57:18
  Speaker 2: lesson and the lesson the reversal. It's a place where
• 57:21
  Speaker 2: you can get all the curriculum, and in fact, we
• 57:24
  Speaker 2: give every one of our students all twenty five of
• 57:28
  Speaker 2: our method books in the app. So if they're curious
• 57:31
  Speaker 2: and they want to try something on base or try
• 57:33
  Speaker 2: a more advanced skill, knock yourself out. But in addition
• 57:38
  Speaker 2: to that, they have got not just the exercises that
• 57:42
  Speaker 2: we have in the method books or the subset of
• 57:45
  Speaker 2: those that's been assigned to them, but we have thousands
• 57:49
  Speaker 2: and thousands of exercises that have been uploaded by our
• 57:52
  Speaker 2: instructors that they can tap into. So their instructor could
• 57:56
  Speaker 2: tap in, could upload an assignment for them to play,
• 58:00
  Speaker 2: and then they'll also have the tablature, the sheet music,
• 58:04
  Speaker 2: the notation, playback metronome, all the functionality to make a
• 58:09
  Speaker 2: practice session more substantial. It's as if you have a
• 58:14
  Speaker 2: digital teacher there with you giving you real time feedback
• 58:20
  Speaker 2: on your proficiency.
• 58:23
  Speaker 1: Okay, let's go back to I walk in the front door.
• 58:27
  Speaker 1: I have some basic skills. Okay, what is the season?
• 58:33
  Speaker 1: How many shows do you do in a season? And
• 58:36
  Speaker 1: I either have to sign up for that if it
• 58:38
  Speaker 1: doesn't appeal to me, I have to wait to the
• 58:40
  Speaker 1: next season. How does it work?
• 58:42
  Speaker 2: Yeah, so, you know, we always remind our schools that
• 58:48
  Speaker 2: the best time to sign up for School of Rock
• 58:50
  Speaker 2: is now. That whether you're a month into the season
• 58:53
  Speaker 2: or two months into the season of a three month
• 58:56
  Speaker 2: season or three plus month season, there's always the opportunity
• 59:02
  Speaker 2: to bring a new band member in because we phase
• 59:05
  Speaker 2: the casting. We release only portions of the curric or
• 59:09
  Speaker 2: the of the repertoire as the season goes on, so
• 59:13
  Speaker 2: that we can not overwhelm the kids or the adults,
• 59:18
  Speaker 2: but also so that we can bring in new people
• 59:20
  Speaker 2: to the band when those new people are ready and excited.
• 59:25
  Speaker 2: So you're going to come in and you'll match make
• 59:31
  Speaker 2: with a given show. And then the very first thing
• 59:34
  Speaker 2: that will happen is you're cast on songs. You'll be cast.
• 59:38
  Speaker 2: We want you to play bass or guitar and these
• 59:41
  Speaker 2: three songs, and I know you've never played bass before,
• 59:44
  Speaker 2: but you know for you know those four strings, the
• 59:48
  Speaker 2: first four strings the same thing, and we're going to
• 59:51
  Speaker 2: teach you bass technique so that you're increasing the likelihood
• 59:55
  Speaker 2: that you're going to have more playing time later in life.
• 59:59
  Speaker 2: And then we want you on back ground percussion, background
• 1:00:01
  Speaker 2: vocals on these pieces. And that becomes the heart of
• 1:00:06
  Speaker 2: your study topic, if you will.
• 1:00:09
  Speaker 1: What is the cost in the commitment.
• 1:00:13
  Speaker 2: Where it's monthly tuitions, so we don't sign up for
• 1:00:15
  Speaker 2: the whole semester, but we want to have continuity to
• 1:00:23
  Speaker 2: make sure that there is you know, folks don't drop
• 1:00:27
  Speaker 2: in and drop out, so it's a monthly commitment and
• 1:00:31
  Speaker 2: the cost depends on the territory, the area in which
• 1:00:34
  Speaker 2: we're operating with the market. But for our performance program,
• 1:00:39
  Speaker 2: typically we're in the high three hundreds, low four hundred
• 1:00:42
  Speaker 2: dollars per month. Naturally in Manhattan or Palo Alto, it's
• 1:00:49
  Speaker 2: going to be more expensive because our rent is so
• 1:00:52
  Speaker 2: much more expensive, our labor costs are so much more expensive.
• 1:00:57
  Speaker 2: And for that, you'll have a two plus hours each
• 1:01:00
  Speaker 2: week and depending on the school, thirty to forty five
• 1:01:05
  Speaker 2: minute lesson each week, and then all the access to
• 1:01:10
  Speaker 2: other community activities like we do webinars and touring opportunities,
• 1:01:18
  Speaker 2: which you've probably seen some of our propaganda in terms
• 1:01:22
  Speaker 2: of Summerfest and Lolla Baloo's Rock and Real Lisbon, et cetera.
• 1:01:28
  Speaker 2: But that's the general economics, pretty simple pricing model.
• 1:01:33
  Speaker 1: Okay, And you have my credit card on file and
• 1:01:36
  Speaker 1: you're going to build me unless I cancel. Correct, Okay,
• 1:01:43
  Speaker 1: So how many shows are there a semester? And how
• 1:01:46
  Speaker 1: do you pick what the shows are?
• 1:01:49
  Speaker 2: So we have sixty core shows that we have that
• 1:01:55
  Speaker 2: are combinations, well, permutations of the twelve hundred songs in
• 1:02:02
  Speaker 2: our core curriculum. So we've spent several years kind of
• 1:02:07
  Speaker 2: honing what we think are pedagogically appropriate shows, the ones
• 1:02:11
  Speaker 2: that deliver the most technique and theory quietly to our students,
• 1:02:16
  Speaker 2: but have the most diversity too in regards to genre.
• 1:02:20
  Speaker 2: So we want metal, we want Prague, we want British Invasion,
• 1:02:25
  Speaker 2: we want the twenty tens, you know, which some of
• 1:02:29
  Speaker 2: the kids call classic rock, which is jarring, but we
• 1:02:33
  Speaker 2: also want early blues. So what we do is, then,
• 1:02:41
  Speaker 2: depending on the age of the school, the experience of
• 1:02:45
  Speaker 2: the school, depending on the nature of the student body
• 1:02:48
  Speaker 2: and who they know are enrolling, the music staff will
• 1:02:52
  Speaker 2: get together a few months before the next season and say,
• 1:02:55
  Speaker 2: here's what the roster looks like of our core kids.
• 1:02:59
  Speaker 2: Here's what we've done season. Here's some things we really
• 1:03:02
  Speaker 2: need to pump up. Here are some things we've heard
• 1:03:05
  Speaker 2: demands for. You know, we've got this whole core of
• 1:03:10
  Speaker 2: kids who've gotten into my chemical romance. Well, let's scratch
• 1:03:13
  Speaker 2: that itch. We can do that. So I think that
• 1:03:18
  Speaker 2: it's a it's a little bit of an art combined
• 1:03:21
  Speaker 2: by tools that have science to them, where we can
• 1:03:24
  Speaker 2: actually go through our what we call our method engine
• 1:03:27
  Speaker 2: and say, okay, we have these levels of these players,
• 1:03:31
  Speaker 2: what shows can best equip or best serve the needs
• 1:03:37
  Speaker 2: of those players, and then they announce the shows kids
• 1:03:41
  Speaker 2: can put their first second choice in. We do not
• 1:03:45
  Speaker 2: guarantee you're going to get your first choice. And one
• 1:03:49
  Speaker 2: of the best pedagogical outcomes we have had as a
• 1:03:52
  Speaker 2: general rule over twenty five years is how many kids,
• 1:03:55
  Speaker 2: after they've gotten their third choice, are that becomes their
• 1:03:59
  Speaker 2: favorite musician of all time. That's just the nature of youth.
• 1:04:03
  Speaker 2: So that's how the mechanics of it work. And as
• 1:04:06
  Speaker 2: in terms of how many that can be, anywhere from
• 1:04:09
  Speaker 2: three to twelve shows. You know, a school like Perth
• 1:04:16
  Speaker 2: which has got nearly five hundred students they'll be doing
• 1:04:20
  Speaker 2: They may take a whole weekend at a venue and
• 1:04:23
  Speaker 2: do twelve end of season shows, whereas a newer school
• 1:04:28
  Speaker 2: with just one hundred and forty students they may be
• 1:04:31
  Speaker 2: doing three shows.
• 1:04:32
  Speaker 1: Okay, so it's all signed up. How many songs are
• 1:04:37
  Speaker 1: going to be in the show in the genre that
• 1:04:39
  Speaker 1: I pick or the era that I pick it? How
• 1:04:41
  Speaker 1: much am I going to play on them?
• 1:04:44
  Speaker 2: Yeah? So the typically the shows will be a wide
• 1:04:50
  Speaker 2: variation kind of eighteen to twenty one tunes, and you
• 1:04:57
  Speaker 2: will typically play your core instrument on a handful of
• 1:05:01
  Speaker 2: those songs, not most, but then you'll be tasked to
• 1:05:06
  Speaker 2: play additional instrumentation on the rest of the songs. So
• 1:05:12
  Speaker 2: much like in a recital when I was learning piano,
• 1:05:16
  Speaker 2: you're the delivered product might be one sonata, one a tude,
• 1:05:23
  Speaker 2: and you know, one Bach invention. We want to make
• 1:05:27
  Speaker 2: sure that there's enough substance that that kid is getting
• 1:05:29
  Speaker 2: a handful of challenging songs and getting exposure that they're
• 1:05:35
  Speaker 2: part of the band in more secondary ways. So depending
• 1:05:40
  Speaker 2: on the number of students, that number will change, and
• 1:05:44
  Speaker 2: depending on the nature of the songs, the number changes.
• 1:05:46
  Speaker 2: Bohemian Rhapsody has a much higher student count for orchestration
• 1:05:51
  Speaker 2: than say Green Day, Like you know, Oh Love on
• 1:05:55
  Speaker 2: Green Day.
• 1:06:03
  Speaker 1: Okay, so I practiced for three months. Tell me about
• 1:06:05
  Speaker 1: the actual show.
• 1:06:07
  Speaker 2: The shows are epic, So we'll we'll take you know will.
• 1:06:14
  Speaker 2: If you're out in la you might see a School
• 1:06:16
  Speaker 2: of Rock end of season show at the Troubadour, or
• 1:06:20
  Speaker 2: you might see it at the Knitting Factory in Brooklyn.
• 1:06:23
  Speaker 2: Reggie's in Chicago, and it is a full rock and
• 1:06:29
  Speaker 2: roll show, Tier one back line, lights, sound, and the
• 1:06:36
  Speaker 2: venues love us because we'll typically go into the venue
• 1:06:40
  Speaker 2: at a time when they don't have other activities, and
• 1:06:45
  Speaker 2: the food and beverage is terrific for them. So what
• 1:06:49
  Speaker 2: you'll find is each student will bring their loved ones,
• 1:06:52
  Speaker 2: their friends. The ones that bring the most audience members
• 1:06:56
  Speaker 2: are our littlest kids. So when you have a seven
• 1:07:01
  Speaker 2: year old doing seven Nation Army, they'll have and it's
• 1:07:06
  Speaker 2: it's epic, Bob, Honestly, it's the cutest thing you've ever seen,
• 1:07:11
  Speaker 2: and they'll have fifteen fans in the audience, and of
• 1:07:15
  Speaker 2: course that kid sounds like Hendrix as far as every
• 1:07:18
  Speaker 2: one of those fans is concerned. But that's the reinforcement
• 1:07:21
  Speaker 2: we want to create. We want to create at seven,
• 1:07:24
  Speaker 2: you hit your first gig, you played the Troubadour at seven.
• 1:07:27
  Speaker 2: That's what we want.
• 1:07:28
  Speaker 1: Okay, So is it like, let's just assume your store
• 1:07:34
  Speaker 1: has five different tracks they're all going to play together
• 1:07:37
  Speaker 1: on one night.
• 1:07:39
  Speaker 2: It depends. Sometimes it's absolutely impossible, but typically the season
• 1:07:44
  Speaker 2: shows will either happen same weekend or two consecutive weekends.
• 1:07:48
  Speaker 1: So let's just say I'm there for a night and
• 1:07:53
  Speaker 1: I'm showing up for somebody in the band. How long
• 1:07:57
  Speaker 1: is the show and how many bands are going to
• 1:07:59
  Speaker 1: be there that night? Is the audience gonna cycle in
• 1:08:02
  Speaker 1: it out it's like an eight hour marathon, or it's
• 1:08:05
  Speaker 1: like four hours, two bands that's it, or three bands, whatever.
• 1:08:09
  Speaker 2: Yeah, I think typically what you'll find in most cases,
• 1:08:13
  Speaker 2: they make it a reasonable evening where the the you know,
• 1:08:20
  Speaker 2: it'll be a tolerable amount for everyone to stay around
• 1:08:23
  Speaker 2: for most of the show, and it's encouraged. It's really
• 1:08:26
  Speaker 2: encouraged from a teamwork standpoint to do that. And what
• 1:08:30
  Speaker 2: we do we have is a really really good habit
• 1:08:32
  Speaker 2: as least students stay around for the rest of the shows,
• 1:08:37
  Speaker 2: so there's always this core audience in the stage cheering
• 1:08:41
  Speaker 2: on every every band. So that might be a four
• 1:08:46
  Speaker 2: six hour kind of thing. There are some weekends and
• 1:08:51
  Speaker 2: some of our busier schools that almost feel more like
• 1:08:54
  Speaker 2: a music festival where it's morning till night with maybe
• 1:08:58
  Speaker 2: an afternoon break and people are slotted in and you're
• 1:09:02
  Speaker 2: kind of you're cast to a certain hour or set
• 1:09:08
  Speaker 2: of hours, and that's really just a function of the number,
• 1:09:12
  Speaker 2: the size of the school, the number of students, the
• 1:09:14
  Speaker 2: size of the band as well. We'll sometimes have adults
• 1:09:19
  Speaker 2: play in the same show as kids. I personally think
• 1:09:23
  Speaker 2: it's sometimes cooler to let the adults kind of do
• 1:09:26
  Speaker 2: their own thing. And then we'll also try to get
• 1:09:31
  Speaker 2: our littlest kids to play one or two or three songs.
• 1:09:37
  Speaker 2: And it's absolutely beautiful to watch because no one's more
• 1:09:42
  Speaker 2: excited about that. So you got all these little ones
• 1:09:45
  Speaker 2: on stage, it's the first time they've ever been on stage,
• 1:09:48
  Speaker 2: these super supportive big brothers and big sisters, the big
• 1:09:52
  Speaker 2: kids in the band, and who are really showing them
• 1:09:56
  Speaker 2: love and affection and attention. And then they go out
• 1:09:59
  Speaker 2: there and they're you know, they're doing you Shook Me
• 1:10:01
  Speaker 2: all night long. It's really fantastic.
• 1:10:05
  Speaker 1: Yeah, I can visualize it, and I'm laughing and smiling
• 1:10:08
  Speaker 1: at the same time. Obvious question here it is called
• 1:10:13
  Speaker 1: the school of rock. If you really want to get deep,
• 1:10:19
  Speaker 1: Rock's penetration and consumption actually went up a little bit
• 1:10:23
  Speaker 1: in this last period of time, but still consumption is
• 1:10:28
  Speaker 1: dominated by hip hop. Is it very clear that this
• 1:10:34
  Speaker 1: is rock, It's not pop, it's not Mariah Carey, it's
• 1:10:38
  Speaker 1: not Jay Z And if you want that, you go
• 1:10:41
  Speaker 1: somewhere else. Tell me what's your response.
• 1:10:43
  Speaker 2: To that one. As of now, we really only have
• 1:10:48
  Speaker 2: one strict genre philosophy, which is that we want an
• 1:10:52
  Speaker 2: ensemble based music program. So we over the years have
• 1:10:57
  Speaker 2: gotten far more imaginative about what we consider rock. School
• 1:11:04
  Speaker 2: of rock is a noemonic. It's a little bit like
• 1:11:07
  Speaker 2: Amazon used to be a you know, a bookseller, and
• 1:11:10
  Speaker 2: that was their original identity and then it became a
• 1:11:13
  Speaker 2: mnemonic for the endless isle of everything. We feel that
• 1:11:18
  Speaker 2: way about ensemble music. Now there's natural limitations to that.
• 1:11:22
  Speaker 2: If we were to do that orchestrally, or do jazz ensembles,
• 1:11:25
  Speaker 2: or to do chamber orchestras we need have to, we
• 1:11:28
  Speaker 2: have to make some more radical changes. But from my perspective,
• 1:11:32
  Speaker 2: any genre in the contemporary music canon that is ensemble
• 1:11:39
  Speaker 2: based is fair game. And you will see our schools
• 1:11:44
  Speaker 2: take advantage of that. And where that becomes very relevant
• 1:11:47
  Speaker 2: is in our schools outside the US. You know, there's
• 1:11:51
  Speaker 2: an amazing as you know, there's an amazing Andian rock
• 1:11:55
  Speaker 2: scene like Andyan prog rock, and and we want to
• 1:12:02
  Speaker 2: make sure that that comes to life. So you're going
• 1:12:05
  Speaker 2: to have all together different orchestrations in Chile and Peru, Paraguay, Colombia, Brazil.
• 1:12:16
  Speaker 2: You know, you'll have sertanejos songs in samba in Brazil
• 1:12:22
  Speaker 2: and we're very comfortable with that both domestically and internationally.
• 1:12:27
  Speaker 2: What that actually means in practical terms, though, is our
• 1:12:31
  Speaker 2: genre really starts with the early blues and ends kind
• 1:12:35
  Speaker 2: of in the twenty tens. But to keep it fresh,
• 1:12:39
  Speaker 2: we will have even more contemporary music. But we've done
• 1:12:44
  Speaker 2: rock rap shows. There's plenty of rap shows with with
• 1:12:48
  Speaker 2: you know, full back line, you know, and as you know,
• 1:12:53
  Speaker 2: you know, you go to Laala, you watch Childish Gambino,
• 1:12:57
  Speaker 2: he's got a full back line. That's not true for everyone,
• 1:13:01
  Speaker 2: you know, Kendrick Lamar doesn't in his current iteration. But
• 1:13:06
  Speaker 2: if he comes out with tunes that have a full
• 1:13:10
  Speaker 2: ensemble orchestration, we'll weave that into our curriculum, ready, ready, quick,
• 1:13:16
  Speaker 2: because we believe that's appropriate.
• 1:13:18
  Speaker 1: But it's a practical matter. Let's just talk to us
• 1:13:22
  Speaker 1: where we're familiar with the repertoire. Yeah, what percentage is
• 1:13:27
  Speaker 1: essentially rock?
• 1:13:29
  Speaker 2: I would say seventy percent of our curriculum today, You
• 1:13:34
  Speaker 2: and I would agree it falls within the rock genre,
• 1:13:38
  Speaker 2: and then the remainder would be, you know, adjacent genres
• 1:13:44
  Speaker 2: that could accidentally be called rock by somebody who isn't
• 1:13:48
  Speaker 2: familiar with the nomenclature. So it may be more pop, indie, progue, metal, punk,
• 1:13:54
  Speaker 2: et cetera. But it's it's still centered. But that is
• 1:13:59
  Speaker 2: of all over time.
• 1:14:01
  Speaker 1: Okay, so let's go back to the categorizations. You have rookies,
• 1:14:05
  Speaker 1: you have little wing, you have adults. How many different
• 1:14:08
  Speaker 1: categories do you have?
• 1:14:11
  Speaker 2: Well, that plus our performance program is the heart of
• 1:14:15
  Speaker 2: what we do. But there's this interesting migration that we're
• 1:14:18
  Speaker 2: going through that I think is going to be very
• 1:14:21
  Speaker 2: very transformational for the company, which is that we've had
• 1:14:27
  Speaker 2: this massive growth and success by being the place to
• 1:14:30
  Speaker 2: learn to be proficient musicians through cover music, but with
• 1:14:36
  Speaker 2: the effective, endless opportunities to self distribute and also the
• 1:14:42
  Speaker 2: psychological and the educational benefits of creating for something from scratch.
• 1:14:47
  Speaker 2: We're adding additional things beyond those core programs. So we
• 1:14:52
  Speaker 2: have now a songwriting program. We do that all season long,
• 1:14:56
  Speaker 2: or we'll do that during camps. We just introduce used
• 1:15:00
  Speaker 2: to recording and production program that we'll be rolling out
• 1:15:03
  Speaker 2: system wide. And so I actually see the scope of
• 1:15:08
  Speaker 2: our offerings changing pretty dramatically. One I'm excited about is
• 1:15:13
  Speaker 2: live sound. I'd like to do a season long live
• 1:15:15
  Speaker 2: sound program. I'd like to do a season long business
• 1:15:18
  Speaker 2: affairs program where you know, we get Bob as a
• 1:15:22
  Speaker 2: guest professor, as a culminating a culminating guest, and we
• 1:15:31
  Speaker 2: we do the basics to music distribution, et cetera. Self promotion.
• 1:15:39
  Speaker 2: So I think we're at a point where we've got
• 1:15:41
  Speaker 2: a very, very stout and defined set of menu offerings,
• 1:15:46
  Speaker 2: but we are changing that because we think that there's
• 1:15:49
  Speaker 2: a lot more value to be added. I would also
• 1:15:54
  Speaker 2: say that we accidentally have become a pretty important player
• 1:15:59
  Speaker 2: in remote lessons. When COVID hit. You know, you can
• 1:16:05
  Speaker 2: imagine a CEO's experience when they're saying themselves, we're in
• 1:16:09
  Speaker 2: the business of throwing together like a dozen or two
• 1:16:14
  Speaker 2: dozen kids into a small room, having them breathe and
• 1:16:19
  Speaker 2: excel vigorously, and then COVID comes. We had to move
• 1:16:26
  Speaker 2: to a global remote teaching capability within a week, and
• 1:16:33
  Speaker 2: we had that up and running in the second week
• 1:16:35
  Speaker 2: of March, which to a large extent, saved the company.
• 1:16:41
  Speaker 2: But what's lingered from their is we're doing still doing
• 1:16:44
  Speaker 2: thousands of remote lessons a month because instead of COVID,
• 1:16:48
  Speaker 2: it's tummy aches, or it's vacations, or it's my car
• 1:16:52
  Speaker 2: broke down, or there's an it's just more convenient, or
• 1:16:57
  Speaker 2: I live in Vietnam and you don't have a school
• 1:16:59
  Speaker 2: in Vietnam yet. So I also see coming a really,
• 1:17:04
  Speaker 2: really really big commitment to addressing the entire addressable market
• 1:17:11
  Speaker 2: of music education. And I know there's a lot of
• 1:17:14
  Speaker 2: players out there, but the beauty is we've got a
• 1:17:17
  Speaker 2: very famous brand and we've got a really really unusual curriculum.
• 1:17:24
  Speaker 2: One thing I didn't mention in that regard is that
• 1:17:26
  Speaker 2: our teaching methods patented. We actually secured a patent a
• 1:17:30
  Speaker 2: couple of years ago, so we actually feel we have
• 1:17:33
  Speaker 2: a moat around our teaching method that'll let us bring
• 1:17:36
  Speaker 2: that to an omni channel world in a bigger way.
• 1:17:41
  Speaker 2: But that's the current menu of services, excluding all the
• 1:17:46
  Speaker 2: really hair brained stuff that we have in mind.
• 1:17:50
  Speaker 1: Okay, there's twelve months in a year. I would assume
• 1:17:53
  Speaker 1: that if the performance cycle is three months, there A
• 1:17:59
  Speaker 1: are there force Michaels a year? B Do people drop in?
• 1:18:04
  Speaker 1: Drop out? Are they dedicated. You know, what does the
• 1:18:07
  Speaker 1: student ultimately do?
• 1:18:09
  Speaker 2: Yeah, So we typically have four cycles. But in addition
• 1:18:17
  Speaker 2: to that, we have this pushed me, pull me during
• 1:18:20
  Speaker 2: the summertime. During the summertime, we'll lose students, some students
• 1:18:25
  Speaker 2: because they'll be doing other summer activities in the Northeast.
• 1:18:29
  Speaker 2: You know, a lot of the kids go to sleep
• 1:18:30
  Speaker 2: away camp, or we have kids going to the shore
• 1:18:34
  Speaker 2: or going on family vacations, college prep, etc. So that's
• 1:18:41
  Speaker 2: a headwind. A tailwind we have though, is that we've
• 1:18:44
  Speaker 2: have a massive business in camps, day camps, So we'll
• 1:18:49
  Speaker 2: do I'm going to just estimate here, but I would
• 1:18:54
  Speaker 2: guess we'll do over twenty five thousand, maybe thirty thousand
• 1:18:59
  Speaker 2: units of camp over the summer, which is an amazing
• 1:19:04
  Speaker 2: way for us to actually garner new leads for the
• 1:19:08
  Speaker 2: fall season. So the only time that's peculiar for us
• 1:19:14
  Speaker 2: is where at whatever country in which we're operating, when
• 1:19:17
  Speaker 2: folks are on school vacations. Now there's countercyxicality because we
• 1:19:22
  Speaker 2: operate our biggest markets in Brazil outside the US, So
• 1:19:26
  Speaker 2: there it's the opposite.
• 1:19:27
  Speaker 1: Schedule, right. Okay, when you say you run day camps,
• 1:19:32
  Speaker 1: that's a nine to five camp.
• 1:19:34
  Speaker 2: Typically nine to three, so they'll do and this tends
• 1:19:40
  Speaker 2: to be younger students, and it's based on a lot
• 1:19:44
  Speaker 2: of the principles that we have in our performance program,
• 1:19:47
  Speaker 2: and the only thing that's different is have a slightly
• 1:19:50
  Speaker 2: less ambitious show on that Friday. They don't have three
• 1:19:53
  Speaker 2: months to prepare, so it may be three songs or
• 1:19:56
  Speaker 2: five songs. But we'll do Beatles themed camp, Green Day
• 1:20:00
  Speaker 2: and pop punk and the nineties, and will also do
• 1:20:04
  Speaker 2: songwriting and recording camps. But yes, those are day camps,
• 1:20:08
  Speaker 2: typically with some kind of culminating experience on Friday, usually
• 1:20:15
  Speaker 2: at the school itself.
• 1:20:17
  Speaker 1: Okay, let's write off the summer for the reasons you mentioned.
• 1:20:21
  Speaker 1: Let's just assume I'm in during what we'll call the
• 1:20:25
  Speaker 1: conventional school year. To what degreeedy kids continue during the
• 1:20:30
  Speaker 1: year year after year? To what degree do they drop
• 1:20:33
  Speaker 1: out completely come back? What's it like?
• 1:20:36
  Speaker 2: Yeah, so we've actually looked at that in a pretty
• 1:20:40
  Speaker 2: detailed way, and there's a staggering statistic that we found
• 1:20:44
  Speaker 2: is that after forty eight months, seventeen percent of the
• 1:20:51
  Speaker 2: students who started forty eight months prior are still with us,
• 1:20:55
  Speaker 2: which is an incredibly high retention for child music education actually,
• 1:21:00
  Speaker 2: given the fact that includes students who graduate out, that
• 1:21:04
  Speaker 2: includes students who have moved on to other areas of passion.
• 1:21:09
  Speaker 2: So you know, the thing that creates that greater stickiness
• 1:21:16
  Speaker 2: is the performance. Because we also looked at the cohort
• 1:21:19
  Speaker 2: of students who just take individual lessons from us, and
• 1:21:24
  Speaker 2: what we found is a very small single digit number
• 1:21:29
  Speaker 2: is still with us after forty eight months. And in
• 1:21:32
  Speaker 2: a strange way, it's a natural experiment on our source
• 1:21:35
  Speaker 2: of differentiation versus traditional music. That's a clue about actually
• 1:21:41
  Speaker 2: what's happening in most traditional music is forty eight months later,
• 1:21:47
  Speaker 2: they've moved on to something else. But in our curriculum,
• 1:21:50
  Speaker 2: they stay a meaningful number of stays for a really
• 1:21:54
  Speaker 2: really long period of time. And that's part of our
• 1:21:57
  Speaker 2: growth is we're getting all these new students as we're
• 1:22:00
  Speaker 2: getting better and better and better at retaining students by
• 1:22:03
  Speaker 2: having more and more of them in this really differentiated
• 1:22:07
  Speaker 2: performance program.
• 1:22:08
  Speaker 1: Okay, so forget the adults for a second. Who are
• 1:22:14
  Speaker 1: the students? You know, when I grew up in the
• 1:22:16
  Speaker 1: old era, you did a smortgage board of activities. Today
• 1:22:21
  Speaker 1: people tend to specialize. But in addition, conventionally, the people
• 1:22:26
  Speaker 1: participating in music and arts, we're not necessarily the same
• 1:22:29
  Speaker 1: people participating in sports. So who are these kids?
• 1:22:35
  Speaker 2: Yeah, I think that you know that most of these
• 1:22:37
  Speaker 2: kids are folks who are either in the sampling stage
• 1:22:42
  Speaker 2: of discovering whether music is their thing, or in the
• 1:22:46
  Speaker 2: conclusion stage of determining it is by trying other things.
• 1:22:51
  Speaker 2: So we'll always get browsers, will always get people who
• 1:22:55
  Speaker 2: are doing both. And I would say the vast majority
• 1:22:59
  Speaker 2: of our students are doing something in addition to music
• 1:23:04
  Speaker 2: that is different than music. It might be debate, it
• 1:23:07
  Speaker 2: might be musical theater, it might be it may be art.
• 1:23:14
  Speaker 2: There's a very small overlap between sports and music. But
• 1:23:19
  Speaker 2: what's interesting about that, what intrigues me about it is
• 1:23:22
  Speaker 2: the principles are identical, and so we happen to be
• 1:23:28
  Speaker 2: real fans of the fact that there is this assortment
• 1:23:33
  Speaker 2: of different child enrichment activities that we can be part of.
• 1:23:37
  Speaker 2: We don't lament when a kid migrates out to sports
• 1:23:43
  Speaker 2: because we think if they're finding their place, that's the
• 1:23:47
  Speaker 2: source of their civics lesson, that's the source of their
• 1:23:50
  Speaker 2: ability to negotiate compromise the source of their psychological wellness.
• 1:23:56
  Speaker 2: That's okay with us. But yeah, I think that we
• 1:24:01
  Speaker 2: tend to the vast majority of our students are people
• 1:24:03
  Speaker 2: on the journey to discover if music is their thing
• 1:24:06
  Speaker 2: or they've discovered it. You know, a kid like me
• 1:24:09
  Speaker 2: who you know, notionally played varsity tennis, but that was
• 1:24:13
  Speaker 2: only because they needed one more kid on tennis. But
• 1:24:18
  Speaker 2: I was a music kid. I was the band kid.
• 1:24:21
  Speaker 2: We get most of those kids.
• 1:24:29
  Speaker 1: Okay, So what do Greedy have a sense of, Miss Spooka.
• 1:24:35
  Speaker 1: I mean, do the kids show up on Tuesday for
• 1:24:36
  Speaker 1: a lesson, in Friday for rehearsal. Where does this actually
• 1:24:40
  Speaker 1: create bonds, especially in this communicative world where kids can
• 1:24:43
  Speaker 1: communicate in a DULs community of the device the people
• 1:24:46
  Speaker 1: around the world.
• 1:24:48
  Speaker 2: All right, well, if you know, if we're gonna if
• 1:24:50
  Speaker 2: we're gonna start speaking full on Yiddish, then then that
• 1:24:54
  Speaker 2: we're instead. I grew up in a house where my
• 1:24:56
  Speaker 2: parents spoke Yiddish. Didn't think I was understanding it. So
• 1:25:00
  Speaker 2: you know how much Muschbeche is there in our in
• 1:25:03
  Speaker 2: our community. It's a really important part. We We actually
• 1:25:08
  Speaker 2: never refer to the company as a company or the
• 1:25:11
  Speaker 2: brand as a brand. We refer to it as a
• 1:25:14
  Speaker 2: community or a family. And it's really important when you're
• 1:25:19
  Speaker 2: starting from a point of view that that unit of analysis,
• 1:25:24
  Speaker 2: which is the ensemble, the band, is the pre eminent
• 1:25:29
  Speaker 2: goal is a great performance working together. It is central.
• 1:25:34
  Speaker 2: And the stories we hear Bob are they they'd they'd
• 1:25:41
  Speaker 2: both uplift you and break your heart. You know, before
• 1:25:46
  Speaker 2: everyone asked how we survived COVID, and the answer is
• 1:25:52
  Speaker 2: that for School of Rock, that wasn't our first pandemic.
• 1:25:57
  Speaker 2: We had a we were dealing with a pandemic well,
• 1:25:59
  Speaker 2: but before COVID came, which is childhood anxiety, depression, suicidal,
• 1:26:07
  Speaker 2: ideation and sadly suicide and far greater mortality in the
• 1:26:17
  Speaker 2: age range we serve than COVID. And if we didn't
• 1:26:21
  Speaker 2: know it before COVID, we know it even more now.
• 1:26:24
  Speaker 2: Is that the non musical elements of what we do
• 1:26:28
  Speaker 2: are the principal sources of differentiation. That is the highest
• 1:26:33
  Speaker 2: value thing we do. I used to work as a
• 1:26:36
  Speaker 2: chief marketing officer for CBS Pharmacy for seven and a
• 1:26:40
  Speaker 2: half years, and having done that, I think of our
• 1:26:45
  Speaker 2: business as a therapeutic business. All about adherence and compliance,
• 1:26:51
  Speaker 2: which is that the medication of music and the medication
• 1:26:55
  Speaker 2: of the experience of you know, just feeling in control
• 1:26:58
  Speaker 2: and I'm getting up on stage and I'm important and
• 1:27:02
  Speaker 2: without the band the song doesn't sound right. And knowing
• 1:27:09
  Speaker 2: what an impact we're having on those students is really gratifying.
• 1:27:14
  Speaker 2: But the tangible manifestations of it. When you walk into
• 1:27:18
  Speaker 2: a school of rock, you will see smiles and eye
• 1:27:22
  Speaker 2: contact and disengagement with phones in a way you won't
• 1:27:26
  Speaker 2: see almost in any other activity. So if more people
• 1:27:30
  Speaker 2: understood what mushburrah meant, I would make it part of
• 1:27:34
  Speaker 2: our tagline because it really defines as in most cases Yiddish,
• 1:27:40
  Speaker 2: it means something, but it means it even more in Yiddish.
• 1:27:44
  Speaker 2: School of rock is a mushburrah, It.
• 1:27:46
  Speaker 1: Is a family. Let's talk about the adults. Who are
• 1:27:51
  Speaker 1: the adults who come? And on the same theme, there's
• 1:27:55
  Speaker 1: all this talk about loneliness, especially amongst men, and some
• 1:27:59
  Speaker 1: men don't don't have any friends. So who are the
• 1:28:03
  Speaker 1: adult participants? Will it be something like I show up
• 1:28:08
  Speaker 1: or will I end up creating relationships to translate outside
• 1:28:11
  Speaker 1: of the program.
• 1:28:13
  Speaker 2: We often see the latter, but sometimes it's the former.
• 1:28:18
  Speaker 1: You know.
• 1:28:18
  Speaker 2: The reality is that because of my travel schedule, I'm
• 1:28:23
  Speaker 2: a really bad School of Rock adult band member. So
• 1:28:27
  Speaker 2: I'm not a responsible person, responsible member of the band.
• 1:28:32
  Speaker 2: I'm hoping my schedule can stabilize to some extent so
• 1:28:37
  Speaker 2: that I can be a more active member. So I
• 1:28:39
  Speaker 2: might not be one that's using it for a social outlet.
• 1:28:42
  Speaker 2: But we have a lot of our schools where this
• 1:28:47
  Speaker 2: becomes their you know, I think about the Freemasons, you know,
• 1:28:53
  Speaker 2: a few centuries ago. There is this need for adult
• 1:29:00
  Speaker 2: to have communal work, to have socialization, and there's such
• 1:29:06
  Speaker 2: so much jarring research about the disassociation at the adult level.
• 1:29:11
  Speaker 2: So yes, I think we do serve that purpose, but
• 1:29:15
  Speaker 2: not exclusively for some folks. There's people who have their friends,
• 1:29:18
  Speaker 2: they have their hobbies, but this is the place for
• 1:29:22
  Speaker 2: them to get their musical outlet. But those people can
• 1:29:26
  Speaker 2: coexist in a band.
• 1:29:28
  Speaker 1: Okay. So talk to John Anderson, famous for Yes, he
• 1:29:34
  Speaker 1: goes on the road with a School of Rock band.
• 1:29:38
  Speaker 1: So we talked all about the education. A is there
• 1:29:42
  Speaker 1: anybody who's been through the School of Rock program who
• 1:29:46
  Speaker 1: has established a successful career as a professional musician that
• 1:29:50
  Speaker 1: people might know the name of and what are the
• 1:29:53
  Speaker 1: opportunities once you reach that level of proficiency.
• 1:29:57
  Speaker 2: Yeah, we're excited that we're now sort of at the
• 1:30:00
  Speaker 2: age and stage where those our kids are starting to
• 1:30:02
  Speaker 2: break and ad middly, I'm a proud I'll answer your
• 1:30:07
  Speaker 2: question sounding like a proud papa. We've got band submerging
• 1:30:12
  Speaker 2: bands like Lifeguard and Hippocampus, Horse Girl, The Regrets, Geese.
• 1:30:21
  Speaker 2: These are all bands that are largely or entirely School
• 1:30:24
  Speaker 2: of Rock kids. And then you know, we're finding I
• 1:30:29
  Speaker 2: think of the guitarists in Dominic Fike's band that we
• 1:30:34
  Speaker 2: have a guitarist from a school of Rock who's in
• 1:30:36
  Speaker 2: the Saturday Night Live band. So we're starting to see
• 1:30:39
  Speaker 2: this very steady stream of folks who are now aging
• 1:30:46
  Speaker 2: out of the program and stepping in to the profession.
• 1:30:51
  Speaker 2: One of the things that's going to be a big
• 1:30:54
  Speaker 2: area for growth for us going forward is, you know,
• 1:30:57
  Speaker 2: we see about one hundred plus one thousand, maybe even
• 1:31:01
  Speaker 2: one hundred and fifty thousand students in the next twelve
• 1:31:05
  Speaker 2: months as part of our program, and over time that's
• 1:31:09
  Speaker 2: going to build to millions of alumni. And the law
• 1:31:14
  Speaker 2: of large numbers suggest that more and more and more
• 1:31:17
  Speaker 2: of those kids soon to be adults are going to
• 1:31:21
  Speaker 2: be at the centerpiece of the next generation of performing artists.
• 1:31:27
  Speaker 2: We're looking to organize that in a much much more
• 1:31:30
  Speaker 2: methodical way. You know, our offices are in Boston and
• 1:31:35
  Speaker 2: Chicago and LA but I live in Nashville, and I
• 1:31:39
  Speaker 2: moved to Nashville in part because as an environment for OSMOSIS,
• 1:31:45
  Speaker 2: it's a great place for me to start connecting us
• 1:31:48
  Speaker 2: in a bigger way to the broader value chain, because
• 1:31:51
  Speaker 2: we should be the biggest producer of new talent in
• 1:31:58
  Speaker 2: the musical field in the world, just because the sheer
• 1:32:01
  Speaker 2: scale that we have and will get as we're growing
• 1:32:04
  Speaker 2: at such a fast pace. So the answer is, yes,
• 1:32:08
  Speaker 2: there are many more I don't even know about because
• 1:32:10
  Speaker 2: we've done a perfectly terrible job on alumni relations. But
• 1:32:15
  Speaker 2: coming over to the next twelve eighteen, twenty four months,
• 1:32:18
  Speaker 2: it's going to be a very central part of what
• 1:32:20
  Speaker 2: we do is being much more deliberate and much more
• 1:32:24
  Speaker 2: disciplined around that supply chain and monetizing it and most importantly,
• 1:32:32
  Speaker 2: helping amazing people get out into the space.
• 1:32:37
  Speaker 1: Let's be specific. You mentioned School of Rock kids at Lollapalooza.
• 1:32:42
  Speaker 1: How many kids do you have at this elite level
• 1:32:45
  Speaker 1: and it's like the people going out with Johnny Anderson,
• 1:32:48
  Speaker 1: which he testifies about. How many opportunities are there like
• 1:32:52
  Speaker 1: that and what do the actually look like.
• 1:32:56
  Speaker 2: Yeah, so we have a range of different opportunities that
• 1:32:59
  Speaker 2: have a different level of threshold. So I'll give you
• 1:33:03
  Speaker 2: three scenarios and the last is specifically what you're asking about.
• 1:33:08
  Speaker 2: We have an opportunity each year we're you know Summerfest
• 1:33:13
  Speaker 2: of course in Milwaukee. Well, Summerfest is during the daytime
• 1:33:20
  Speaker 2: but basically becomes School of Rock. So we take over
• 1:33:24
  Speaker 2: all the main stages at Summerfest and we'll have eighty
• 1:33:28
  Speaker 2: two bands there from all around the world, Peru and Chile,
• 1:33:34
  Speaker 2: and those will typically be the house bands from the
• 1:33:39
  Speaker 2: individual schools. So think of those as the best players.
• 1:33:42
  Speaker 2: Think of it like travel basketball. It's the best players
• 1:33:45
  Speaker 2: typically of that school. Then we'll have a more selective
• 1:33:50
  Speaker 2: program like we had schools having to audition their bands
• 1:33:54
  Speaker 2: to get selected to play at Rock and Rio and Lisbon,
• 1:33:59
  Speaker 2: and that was say, much more involved, logistics, much more complexity,
• 1:34:03
  Speaker 2: higher profile, bigger, bigger attendance at some of the venue
• 1:34:09
  Speaker 2: et cetera. And then the most selective we have is
• 1:34:13
  Speaker 2: our All Stars program. And what we do is audition
• 1:34:18
  Speaker 2: hundreds and hundreds of kids who are recommended by the schools.
• 1:34:22
  Speaker 2: We zero it down to about one hundred and sixty
• 1:34:24
  Speaker 2: one hundred and seventy of those kids put them into teams.
• 1:34:28
  Speaker 2: We just completed our All Star tours. So the kids
• 1:34:31
  Speaker 2: that play at Lalla or at Red Rocks, or you know,
• 1:34:37
  Speaker 2: or do our recordings for us, those will be those
• 1:34:39
  Speaker 2: all Star levels. And you and I would close our
• 1:34:42
  Speaker 2: eyes at those performances and you would say, this is
• 1:34:46
  Speaker 2: as good a rock and roll performance as you've ever heard,
• 1:34:50
  Speaker 2: sometimes better. And what those kids will also do is
• 1:34:54
  Speaker 2: do build our collateral. So we've secured sixty or so
• 1:34:59
  Speaker 2: sync writes to some of the best songs that are
• 1:35:03
  Speaker 2: out there. And so we'll have our all Stars go
• 1:35:06
  Speaker 2: into Sunset Studios or go into another Tier one studio
• 1:35:14
  Speaker 2: and record high production value. So you look at our
• 1:35:21
  Speaker 2: rendition of California Dreaming. It's got over ten million organic
• 1:35:25
  Speaker 2: views because it's just so damn good. And Lauren Fryhouf,
• 1:35:30
  Speaker 2: who was the lead singer on it, ended up being
• 1:35:32
  Speaker 2: number two on the Voice so I would say we
• 1:35:37
  Speaker 2: have hundreds of kids who, if luck and access were right,
• 1:35:47
  Speaker 2: would be as competitive in the professional market as anything
• 1:35:50
  Speaker 2: that's out there, and that's going to grow to thousands. Now,
• 1:35:53
  Speaker 2: of course, the markets mean it's difficult, it's limited, so
• 1:35:58
  Speaker 2: there's not going to be the opportunity for all of
• 1:36:00
  Speaker 2: those kids to become professionals, and not all of them
• 1:36:04
  Speaker 2: want to. We have a lot of kids who are
• 1:36:06
  Speaker 2: professional level musicians, but they also want to be professional
• 1:36:09
  Speaker 2: level doctor. So but it's in the hundreds growing to
• 1:36:15
  Speaker 2: the thousands of kids that I think would be signable.
• 1:36:20
  Speaker 1: Why you why do you run the house a school
• 1:36:23
  Speaker 1: of rock?
• 1:36:25
  Speaker 2: Well, you know, I'm a musician from early childhood, maybe
• 1:36:34
  Speaker 2: more importantly, you know, for me, music was my therapeutic outlet.
• 1:36:41
  Speaker 2: So you know, I wasn't that athletic kid. I wasn't
• 1:36:44
  Speaker 2: the tall kid, wasn't the richest kid, and notwithstanding my charm,
• 1:36:52
  Speaker 2: I wasn't the most charming kid. And what I found
• 1:36:56
  Speaker 2: with music is that the embrace and the support structure
• 1:37:01
  Speaker 2: and the the the the opportunity to make friends without
• 1:37:10
  Speaker 2: even speaking a word was so powerful that it always
• 1:37:14
  Speaker 2: was in the back of my head, how can I
• 1:37:16
  Speaker 2: play a bigger role. But then I had a very
• 1:37:18
  Speaker 2: conventional career, you know, consulting, getting an MBA, going into retail,
• 1:37:25
  Speaker 2: going going into other franchising environment and then, you know,
• 1:37:33
  Speaker 2: maybe the most important factor was for me was in
• 1:37:36
  Speaker 2: the role. Immediately before this role, I worked for another
• 1:37:40
  Speaker 2: very large franchise company called Edible Arrangements. So if you
• 1:37:45
  Speaker 2: ever have questions on how to cut pineapple just right
• 1:37:50
  Speaker 2: and make bouquets out of fruit, I am your guy.
• 1:37:54
  Speaker 2: But while I was in that role, my brother got
• 1:37:58
  Speaker 2: very ill with pancreatic cancer. And as I think everyone
• 1:38:06
  Speaker 2: listening can identify, you have those moments where you say,
• 1:38:12
  Speaker 2: what am I on this planet to do? What am
• 1:38:15
  Speaker 2: I here to do? What matters to me? What will
• 1:38:18
  Speaker 2: give me joy? And it's almost as if the universe
• 1:38:21
  Speaker 2: was answering the question back. I got a call from
• 1:38:23
  Speaker 2: School of Rock. They said, okay, well you've got a
• 1:38:26
  Speaker 2: background in marketing and branding and organizational transformation and CRM
• 1:38:34
  Speaker 2: and all in these franchise skills. You seem like a
• 1:38:36
  Speaker 2: good guy to talk to. They had no idea that
• 1:38:39
  Speaker 2: music was my most important thing. We even had a
• 1:38:42
  Speaker 2: family band with my kids, and my poor wife was
• 1:38:45
  Speaker 2: conscripted as the bass player, and I so regret not
• 1:38:53
  Speaker 2: finding my purpose earlier. Although none of the stops along
• 1:38:57
  Speaker 2: the way, I wouldn't be in the role without the
• 1:39:02
  Speaker 2: stops along the way. But that's why I'm running School
• 1:39:05
  Speaker 2: of Rock. I feel like fate has dealt me the
• 1:39:10
  Speaker 2: kindest hand by giving me this at a time in
• 1:39:13
  Speaker 2: my life when I can appreciate it. It's incredibly fulfilling.
• 1:39:19
  Speaker 1: Okay, so what are the challenges you presently face in
• 1:39:23
  Speaker 1: the business and what are the goals. We've covered some
• 1:39:27
  Speaker 1: of the goals, but what are the challenges.
• 1:39:30
  Speaker 2: I think the biggest challenge of an organization that's so
• 1:39:34
  Speaker 2: purpose driven, that's so anchored in creativity and community, is
• 1:39:41
  Speaker 2: preservation of the culture. You know, we're growing so fast
• 1:39:46
  Speaker 2: in so many places in there. You know, We've got
• 1:39:51
  Speaker 2: you know, Australia and Taiwan, Philippines, South Africa, And on
• 1:39:56
  Speaker 2: the one hand, when I visit these locations, it feels
• 1:39:59
  Speaker 2: like I'm an old friend. But on the other hand,
• 1:40:02
  Speaker 2: I'm mindful that as you increase your scale, increase your scope,
• 1:40:08
  Speaker 2: how do you preserve that delicate balance of not just
• 1:40:14
  Speaker 2: doing this for the money, but also not doing it
• 1:40:18
  Speaker 2: for the money, making sure that there's a sufficient profit
• 1:40:20
  Speaker 2: motive to drive growth and reinvestment. And you know, I
• 1:40:25
  Speaker 2: think that every CEO if that's not their number one thing,
• 1:40:30
  Speaker 2: if they're a growth company, then they're kidding themselves. So
• 1:40:36
  Speaker 2: we do a lot of work on succession planning. We
• 1:40:38
  Speaker 2: do an enormous amount of work on culture building values,
• 1:40:43
  Speaker 2: you know, really conveying the why of what we do.
• 1:40:47
  Speaker 2: But that's what keeps me sleepless is at what point
• 1:40:52
  Speaker 2: does it start feeling as if we're losing something in
• 1:40:58
  Speaker 2: the translation. We have hit that point yet, I'm not
• 1:41:01
  Speaker 2: worried about it in the next six months or eighteen months.
• 1:41:05
  Speaker 2: But as we grow from being three hundred and forty
• 1:41:08
  Speaker 2: schools to being fifteen hundred or two thousand, we have
• 1:41:12
  Speaker 2: to work hardest at that because if we lose it
• 1:41:16
  Speaker 2: at the corporate level, we'll lose it in the rehearsal room.
• 1:41:19
  Speaker 1: Okay, and relatively quickly. Because most people are confused, explain
• 1:41:26
  Speaker 1: what the School of Rock is relative to the movie,
• 1:41:31
  Speaker 1: the musical, and other operations that have used a similar moniker.
• 1:41:37
  Speaker 2: Yeah, so School of Rock predated the movie and by
• 1:41:41
  Speaker 2: definition predated the musical, and it was a relatively small
• 1:41:46
  Speaker 2: organization at that time when the movie came out, and
• 1:41:51
  Speaker 2: soon after that great movie came out, School of Rock
• 1:41:55
  Speaker 2: was acquired by private equity. Management was professionalized, it was infrastructure.
• 1:42:01
  Speaker 2: There were more lawyers about and financed people about. And
• 1:42:05
  Speaker 2: the question came up, which is, this is a little
• 1:42:07
  Speaker 2: bit of a strange situation, which is we pre existed
• 1:42:11
  Speaker 2: this amazing movie. And it was right about the time
• 1:42:17
  Speaker 2: when the movie was being over, the brand was being
• 1:42:22
  Speaker 2: licensed to Andrew Lloyd Webber for the musical which came
• 1:42:26
  Speaker 2: several years later, and it was at that time we
• 1:42:30
  Speaker 2: reached a really really constructive coexistence agreement with the good
• 1:42:35
  Speaker 2: people of Paramount that effectively organizes the where we can
• 1:42:42
  Speaker 2: operate and where the movie can operate. And for us
• 1:42:45
  Speaker 2: it's terrific because we're going to be in the business
• 1:42:48
  Speaker 2: of children's music education. We can do reality TV shows,
• 1:42:52
  Speaker 2: we can do tours of School of Rock musicians under
• 1:42:57
  Speaker 2: the School of Rock name. We have our own logo types,
• 1:43:00
  Speaker 2: our own identities, we have massive land banking all around
• 1:43:04
  Speaker 2: the world in terms of domains and trade dress, and
• 1:43:11
  Speaker 2: really the only thing we can't do is make comedy
• 1:43:15
  Speaker 2: movies or do fictional Broadway shows, and thankfully we're very
• 1:43:20
  Speaker 2: friendly with both parties. We're big fans of really useful
• 1:43:24
  Speaker 2: group because they're doing such a great job of sustaining
• 1:43:28
  Speaker 2: the brand the stage show, which we think is really special.
• 1:43:32
  Speaker 2: So the way to think about it is just we're cousins,
• 1:43:38
  Speaker 2: but we don't really operate in any direct way, and
• 1:43:42
  Speaker 2: we really didn't grow out of one another as as
• 1:43:49
  Speaker 2: specifically as one might thought might think most people think
• 1:43:52
  Speaker 2: we came after the movie, but we did not.
• 1:43:55
  Speaker 1: And any plans to go public.
• 1:44:00
  Speaker 2: Boy, you know, that's one of those are you running
• 1:44:04
  Speaker 2: for president questions, which is I can say for sure
• 1:44:07
  Speaker 2: that there are no plans afoot to go public at
• 1:44:12
  Speaker 2: this time. I think that frankly, we're a small business,
• 1:44:17
  Speaker 2: a relatively small business. We've got really favorable economics, so
• 1:44:25
  Speaker 2: we can self fund to a large extent, and so
• 1:44:29
  Speaker 2: while I don't see going public in the future, I
• 1:44:33
  Speaker 2: definitely see that there are lots of transformational ways that
• 1:44:36
  Speaker 2: we could work with partners and kind of build on
• 1:44:40
  Speaker 2: what we do and do it in a bigger way.
• 1:44:43
  Speaker 2: Because if you really think what business we're in, it
• 1:44:46
  Speaker 2: would be myopic to say we're in the music education business.
• 1:44:51
  Speaker 2: We've talked about, well beyond that, we're in this the
• 1:44:54
  Speaker 2: talent production business, but we haven't fully capitalized upon it.
• 1:44:58
  Speaker 2: But more broadly, we're in the child enrichment business. So
• 1:45:03
  Speaker 2: is there a way for us to integrate in a
• 1:45:07
  Speaker 2: bigger environment with other related areas, more tangential areas, and
• 1:45:13
  Speaker 2: take all the things we know about child enrichment and
• 1:45:17
  Speaker 2: blow that out. I'm excited about that, but I don't
• 1:45:21
  Speaker 2: see us going public in the near term. I don't
• 1:45:23
  Speaker 2: We really don't need to do that for investment, and
• 1:45:30
  Speaker 2: I'm not sure that right now would help our That
• 1:45:34
  Speaker 2: number one MORI I have, which is cultural, is that
• 1:45:37
  Speaker 2: I really think our Armish book is going to be
• 1:45:40
  Speaker 2: better off all around the dinner, the dinner table, enjoying
• 1:45:44
  Speaker 2: one another's company. And notwithstanding the fact I know a
• 1:45:49
  Speaker 2: lot of people who are on Wall Street, I'm not
• 1:45:52
  Speaker 2: sure they need to be at the table for this
• 1:45:55
  Speaker 2: particular dinner at this particular time.
• 1:45:58
  Speaker 1: Well, Rob, I want to thank you for taking the
• 1:46:00
  Speaker 1: time to speak to me and my audience. I have people,
• 1:46:04
  Speaker 1: whether it be parents or an adult close friend, they
• 1:46:08
  Speaker 1: can't stop talking about the School of Rock. You know,
• 1:46:11
  Speaker 1: most people say, oh, yeah, my kid's in competitive swimming
• 1:46:13
  Speaker 1: woods they go on, I got one, Frienci, Well, this
• 1:46:16
  Speaker 1: is what we're doing this term. You know, these are
• 1:46:20
  Speaker 1: the solos I'm playing, These are the songs, and I'll
• 1:46:22
  Speaker 1: discuss whatever. And it probably is that your students are
• 1:46:27
  Speaker 1: your best marketing device.
• 1:46:30
  Speaker 2: They are, and you know, it just comes down to
• 1:46:33
  Speaker 2: this principles. Somebody asked me the other day, is like,
• 1:46:37
  Speaker 2: how in one sentence can you define what's special about this?
• 1:46:41
  Speaker 2: And I always say, you know, what's more fun than
• 1:46:45
  Speaker 2: seeing Mick Jagger is being And when we can hear
• 1:46:51
  Speaker 2: those raves from the kids and those parents, that's a
• 1:46:54
  Speaker 2: great joy. And I'm so glad to hear that, and
• 1:46:57
  Speaker 2: I'm so pleased that you gave me the opportunity to
• 1:47:00
  Speaker 2: talk about it with you today.
• 1:47:02
  Speaker 1: Thank you, Rob. Till next time. This is Bob left
• 1:47:06
  Speaker 1: sticks sh