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