Think Media

OMMA = OMG

"We got it; you don't".  That's the message I got sitting through 2 days at the OMMA East Expo.  To be exact, just 1.5 days until I can't stand to hear another self-serving speaker/panelist. 

To start, we had Samsung telling us to use Internet as billboards.  Consistency and frequency, the speaker said (apparently they're blasting on some 600+ sites 24/7)...  Well, that's all good if you have millions of budget to waste - Aren't we going the opposite direction with the Internet when one can get more targeted and thus smarter in posting ads?  I must have heard the word "Samsung" over a hundred time during that speech. 

There's also a panel called "Is Micromedia in Wikipedia?", where the 6 panelists agree on how the rest of the world is not getting blogs.  I'm fascinated by how self-absorbed and arrogant some of these guys are; they think they're the only ones getting blogs, and they'd like to keep it that way.  As the gentleman from BlogAds explained: they don't have the resources to bring [blog illiterate] people from A to Z.   Very well - I thought they're running a business there for a second.

The industry really needs to stop victimizing itself and blame the rest of the universe for not adopting - break from the cult and stop speaking in "wikipedia" terms!

Image Credit: http://peter-marina.com/speak_gibberish.jpg

IGN - Sold to the True Media Mogul

Newsflash for the day: News Corp piled up on yet another big Internet purchase.  IGN for $650mn.  I've talked about it before.  Rafat Ali has a very nice summary on paidcontent.org (my favorite digital media newsletter).  Even at this "reduced" price, I can't help but find the purchase exceedingly expensive - it does, however, make a powerful statement of Murdoch's commitment and strategy.

Murdoch is truly the last media mogul standing.  Gone were the days when media empires were built on one man's vision and his relentless desire to execute.  Grand ideas, after all, often require a leap of faith - investments and risks are too high by any traditional financial measures; future returns inconceivable based on current environment.  The mogul is, in essence, identifying (or creating) a consumer need that's unknown to rest of us.

Certainly refreshing to watch - and thanks, Murdoch, for re-energizing the Internet space!

Image Credit: www.mapartners.net

Definitely a Cool Business Idea

This website blew me away - One of the best "blogs" I've seen so far; the content, organization, presentation and the writing are exemplary. So what is it?  It gathers new business ideas and innovations around the world.  Simple, yet powerful. To give you a glimpse, here are the 5 latest postings:

• Tech Toys - Sky Soldier Airplane (UK); light, indoor, remote controlled airplane
• Bitter Chocolate Toothpaste - Breath Palette toothpastes (Japan) in 32 exotic flavors]
• Super Pen - FLY Pentop Computer; allows users to do math, make music, play games and schedule activities
• Porridge - Scotsman.com (UK); Porridge as the new fast food

All of them are businesses that have been launched; Most not entirely revolutionary, but that's the real world!  Founders are junior college students from Singapore - yes... KIDS!  Check them out.

What is Hompy?

Hompy is big in Korea - but what is it?  Hompy is the short form for Homepage.  Joi Ito wrote a nice piece on it back in June, referring to Hompy as "personal home pages with photo albums, guest books, avatars, background skins and background music".  Unlike blogs or social networking sites, hompies are used to communicate within existing friends.  Users buy online currencies called "acorns" which can be used in turn to purchase avatars, furniture, music, etc. to decorate one's site.  Cyworld (subsidiary of the SK group) is the company behind Hompies - the company currently generates US$150K a day on "acorn" sales.  If you're still confused, check out this article in the Industry Standard.  And go here if you wish to try out Hompy on the Korean site...

Given its populartiy, I wonder why there's no English Hompy site as of yet.  Or, at the very least, some fusion of the model.  Blog platforms in the US are terribly constraining (and boring), designed mainly to host diaries and journals.  Social networking sites, on the other hand, focuses on communications capabilities and community building.  Customization levels are low, allowing little room for self expression. Can someone bring Hompy to the US?  Just think about the vast potential from selling premium digital products and product placement opportunities... 

Image Credit: http://www.we-make-money-not-art.com/xxx/park_homepy%5B1%5D.jpg

Why Webcomics will not stick

Sarah Boxer from the NY Times wrote a note on WebComics here.  Sarah addresses the challenges of putting comics online, highlighting the limitations of the e-book format and lack of a viable business model.  The challenges faced by Webcomics is representative of the nightmares faced by all online content developers: How does one get paid?

There are two distinct channels: advertising vs. subscription.  To date, the former is most applicable towards sites with huge traffic flows (i.e. portals) while the latter best fit niche, need-to-know info sites.  Webcomics, unfortunately, does not fit in either category.  Comics books has evolved over time into a niche market, currently reaping a mere ~$500mn in total revenue.  Apart from collectibles, comics is by-and-large discretionary spending...  there's no shortage of comics materials; and particularly, no shortage of free comics online.  It is thus to no surprise that no viable business model has emerged.

Perhaps comics has become obsolete.  The same way that live theater and broadcast radio has been replaced by movie theaters, cable TV and DVDs, comics has been replaced by video games, animations and other interactive media.  Perhaps it's not the format, but the times that has left webcomics behind.

Image Credit: http://www.dereksantos.com/comicpage/comicpage.html

Value of Eyeballs

On surface, IGN Entertainment is an attractive business: Loyal customer base, need-to-know information, targeted eyeballs, fast growing vertical...  25mn+ uniques and 550mn+ page-views in the month of April 05.  Not bad at all, especially considering its favorable customer demographics (teens and young adults, with skew towards male).  Yet, the valuable "eyeballs" has not yet converted into profitability.  A quick skim at its S-1 reveals that in 2004, IGN recorded operating loss of $9mn+ on revenue of $33mn.  And yes, it has filed for an IPO.

I have always believed in targeted eyeballs - what's better than a captive, measurable audience?  There seems, however, to be a mismatch between the cost and value of those eyeballs.  I struggle to find lead generation sites that are comfortably profitable (if you are aware of any, let me know!).  There appears to be three structural obstacles: 1) pay-per-click model is inherently flawed, discounting the value of brand exposure; 2) online audience is more fragmented, resulting in higher fixed acquisition costs; and 3)  online divisions within large corporates are often not very sophisticated.

Luckily, the trend is in our favor.  Online advertising dollars is growing ~30% year-on-year, and has reached over $10bn in 2005 (note it's still <5% of total ad dollars).  As valuable eyeballs continue to shift from traditional media to new media (online, games, mobile), so too would advertising dollars.  My prediction (or hope, rather) is an insurgence of in-game, mobile and online advertising; unfortunately won't happen in the near future unless there's a major shake-up in the industry...

Image Credit: http://www.greenscreen.org/newsletter/articlesjr/images/EYES_2ROLL.GIF

Can Blogs Make Money?

Self-publishing is the newest fad.  I'm no exception - with this blog, I'm sharing my thoughts with everyone (or no one) who happen to stumble into my site.  Implicitly, I'm hoping for an audience; otherwise I would have written a diary, or created a personal digital journal.  The exact number of blogs created to date is unknown - WSJ had an article quoting numbers ranging from 10-30 million.  Quality and purpose of blogs varies.  What's universal is the format: a simple, chronological record of thoughts.

By definition, a blog is independent, subjective and opinionated.  There are no editors, no publishers, no advertisers, no shareholders.  It is a form of self-expression and promotion.  Some would argue that blogs are less biased than traditional media – I tend to think otherwise.  What blogs give, however, are ample choices for readers to match their individual tastes (thus appealing less biased to the eye). In other words, it serves an expanding number of micro-segments.

The creation of micro-segments is great for consumers, but challenging from a revenue standpoint. I suspect advertising will trump subscription - and that targeted marketing will override mass advertising. Yet, will advertising dollars directed towards micro-segments be sufficient to support good quality content? On this, I remain bullish, and I am optimistic that blogs will in time find a strong footing.

Image Credit: http://www.geek.com/gtoons/gtoonsmain.htm