Carey. Dav El. Everybody has heard of the big national networks. Not many people have heard of the Music Express Affiliate Network and Harold Berkman, owner of Music Express, likes it that way.
Berkman has created a network to service the needs of his clients. Originally, client demand dictated that he open an operation in New York. Later, the idea blossomed into a network which boasts 170 affiliates in the United States and Canada and 15 around the world.
Berkman successfully set up an informal network that would not only meet the needs of his clientele, but the needs of his affiliates as well. The Music Express network has evaded the cash flow problems that can plague a network. By only charging a 10 percent commission fee, the relationship has proven profitable for all involved.
Serving the Client
Berkman’s background in the music business, as senior, vice president for MGM, has garnered him many high-profile entertainment accounts. To ensure that he could give them the quality service they expect no matter where they went, Berkman set up the affiliate network.
“We started our affiliate network for our clients who were so happy with what we did in Los Angeles, they insisted that we open up in New York. I started farming in New York and it reached the point where I couldn’t trust anybody anymore. So we opened up ourselves and are doing great. Our concept there and our demand there is the same as here. After we established Los Angeles and New York, my clients started calling me for other markets,” says Berkman.
When Berkman originally decided to set up the network in 1981, he went market by market and chose what he believed to be the best operation in that market. “What we intended to do was build an affiliate in every market in the country. That is what our clients need. We started at ‘A’ and went through ‘Z’,” Berkman explains.
“This network isn’t like a Carey or Dav El where you pay to be an affiliate and give them a percentage off the top. I want my network to be made up of individual operators that are privately owned and operated. I don’t want a piece of their action. I want my customer taken care of” he adds.
Berkman wanted an affiliate network that would work for him. “If it works for me, it will work for the other affiliates as well,” he says. He believes that the network will also strengthen the other affiliates’ businesses because they now have the ability to deal all over the country.
Profitable for Affiliates
Berkman believes the strength of the network is that the only fee charged to the affiliates is a 10 percent commission on each run.
“I’ve been involved in three other networks and am still trying to collect from two of them. I feel confident that Music Express is a sound company financially. When they say they will pay you, they do — usually within 60 days. In this economy, we can’t afford not to get paid for work we do,” says Alan Fisher of London Livery, Ltd. in New Orleans, LA.
Eric Gibbs of A-Connoisseur in Boston, MA, estimates that his affiliation with the network earns his company approximately $500,000 per year. Gibbs likes the informality of the network. “With a lot of other networks you have to guarantee payment Either by a credit card or some other method. It doesn’t work that way with Music,” he says.
The use of other Music Express affiliates is promoted throughout the network. Affiliates who do deal with each other work directly with the other affiliate, Music Express does not get involved. The referral fee is paid to the referring affiliate. “I don’t want a piece of that action. The other affiliates get a piece of it all,” says Berkman.
“Other networks force you to use their affiliates. I have lost a lot of clients because of that. The good thing about this network is that they don’t put a ton of rules on you. You can use their affiliate, but you aren’t forced to,” says Fisher.
Butch Henke of Squire Limousine Services, Inc. in San Francisco, CA, also uses other Music affiliates for his traveling clientele. Henke, who estimates that approximately 10 percent of his business is generated from the network, says, “I have been affiliated with Music for three years now and I couldn’t be happier with the network and service provided by the other affiliates.”
The only problem Gibbs has experienced in his three years with the network is that the clientele Music Express refers to his company have different demands than his regular clients. “The people in the music and entertainment business are very demanding. The business is also very flexible so you often work with very short notice. In Boston, 90 percent of my work is done by 9 p.m. Music Express works 24 hours a day. Since the average age of my drivers is 50, we sometimes have problems with that. On the bright side, we have been able to meet so many good people from our affiliation — Alan Alda, Tiffany, The New Kids on the Block, to name a few,” he says.
Another problem Gibbs has encountered is with the airport. “Airports are different across the country. I find that most of the people we miss are missed because they weren’t told where to go. In L.A. the passenger can be met at the gate. In Boston, if the chauffeur goes more that 15 yards from the vehicle he will be charged a $500 fine,” he adds.
Berkman runs similar operations on both coasts. He operates 56 vehicles out of the Los Angeles office and 54 in New York. Berkman believes that L.A. and New York are similar markets. Both are nightlife cities and both service many business travelers and do numerous airport runs. Because of this, Berkman sets similar marketing plans and operational programs for the two operations. To ensure that his clients from the music and entertainment fields would receive similar service to what they were used to in Los Angeles, Berkman looked for someone to run the New York operation that also understood these industries. He chose Mark Dymond, a former director of personnel and office service for Arista Records, to head the operation.
“While the two markets are similar, they are also very different,” says Dymond. “In New York we have special needs and Harold realizes this. He has given me total freedom to run this operation. While our clientele is the same, we have to deal with aspects that the L.A. office doesn’t, such as the winter weather, road conditions, and traffic.
“We are on a somewhat different maintenance cycle out here. We give the vehicles a thorough check when the seasons change, we need to convert from heat to air conditioning quickly, and we also have more potholes and worse road conditions to contend with,” he adds. Another difference between the two operations is that in L.A., the drivers take the vehicles home with them. In New York, the cars are garaged. “This makes it easier to check the cars mechanically and we don’t have to contend with the hassles of parking in the City,” he says.
According to Dymond, 60 percent to 70 percent of the company’s clientele comes from bicoastal companies. The majority of these companies use both the New York and Los Angeles operation for their transportation needs.
Battling the Economy
Berkman believes that good economic times are on the horizon. “By the end of the year, things are going to start climbing up. Optimistically, I would like to think we have bottomed out and everything is going to go up. I see too many signs that things are going to turn around,” he admits.
Over the past year, Berkman has continued to replace cars every month and has even added vehicles to his fleet. “I did that because our volume was increasing. When we start doing more farming, I know right away we need more cars,” he adds.
Many people have told Berkman that this is the time to expand his company by buying out other operations. He doesn’t believe this is would be a good business plan. “The marketplace is so soft that some people would say it is an incredible opportunity to move in to a market and buy out a smaller operator and make it a Music affiliate. Frankly, I don’t believe it. I believe this is the worst possible time. When I buy someone out he is going to be healthy and profitable Right now I have no plans to do that in any market.” Berkman admits.
“With the economy the way it is now, I think a sensible business judgment is called for in order to survive. We don’t have to impress anybody but our clients. I think the potential for our industry is enormous,” he says.