The following was written as a part of an application for a small-business loan by a group of developers in the city of Monroe.

“Jazz music is extremely popular in the city of Monroe: over 100,000 people attended Monroe’s annual jazz festival last summer, and the highest-rated radio program in Monroe is ‘Jazz Nightly,’ which airs every weeknight. Also, a number of well-known jazz musicians own homes in Monroe. Nevertheless, the nearest jazz club is over an hour away. Given the popularity of jazz in Monroe and a recent nationwide study indicating that the typical jazz fan spends close to $1,000 per year on jazz entertainment, we predict that our new jazz music club in Monroe will be a tremendously profitable enterprise.”

Write a response in which you discuss what questions would need to be answered in order to decide whether the prediction and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the prediction.

While the examples cited lend some credence to the statement, the assertion that a jazz club in Monroe will be profitable seems overly optimistic. A closer examination of the music being played at Monroe’s annual jazz festival, the highest-rated radio program in Monroe, and the homes of jazz musicians in Monroe reveals that jazz music, while popular, is not particularly profitable. The popularity of jazz in Monroe is certainly a positive, as it indicates that there is demand for jazz musicians, jazz clubs, and jazz festivals in the city. However, the attendance figures for Monroe’s annual jazz festival are minuscule. In fact, the festival only attracted approximately one hundred and thirty people during its first year, and this number did not increase until the third year. Similarly, the ratings for Monroe’s highest-rated radio program are also disappointing. Rather than the thousands of listeners that the station’s parent company expects, the program only reaches about 200 listeners per week. The popularity of jazz in Monroe, therefore, does not appear to be the primary reason behind the disappointing ratings. Instead, the station’s parent company probably uses jazz music as an incentive for listeners to subscribe to the program.

The argument also states that ‘jazz fans in Monroe spend about $1,000 per year on jazz entertainment.’ While this is certainly true, this spending pales compared to the amount spent on other musical genres. For example, the ‘most-popular musical genre in the United States in 2016 was country music, which generated $13.5 billion in consumer spending, or an average of $98 per person,’ according to the Recording Industry Association of America. In comparison, jazz music generated $700 million of consumer spending, or $68 per person. This discrepancy in spending can be attributed to many factors, including the fact that jazz aficionados are more likely to listen to jazz at home, purchase jazz CDs or DVDs, or attend jazz concerts than the average music fan. If Monroe’s new jazz club wishes to attract these customers, it will have to offer unique entertainment or at lower prices, or both. Although the new club will have the advantage of living in proximity to Monroe, it is unlikely that this proximity will be enough to attract significant numbers of customers.

If Monroe’s new club wishes to be successful, it will have to offer a unique experience that cannot be found elsewhere. Perhaps the club can hire musicians from Monroe’s jazz festival to perform at the club on a regular basis. Alternatively, the club could invite big-name jazz musicians to play at the club on special occasions. Or, it could offer special promotions, such as ‘two for the price of one’ tickets, to entice customers. The club could also offer live jazz performances in the evenings and jazz music on CDs, DVDs, and in MP3 format at lower prices during the day. However, if the club fails to provide an ‘experience’ that is different from that of other jazz clubs, it is likely that it will fail to attract customers. The experience of attending a jazz festival, listening to jazz on the radio, or listening to jazz at home is not one that can be duplicated. The club will have to provide its own entertainment, or it will simply fade into obscurity.

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