Posts tagged media
NFC Payment Systems are Just Another CueCat
NFC payment systems, like Google Wallet, remind me of the CueCat.
Launched in 1999, the CueCat was a little plastic cat (really) that let you scan proprietary barcodes on magazine advertisements or other printed material. Scanning a “cue” launched launched an advertiser’s webpage. Despite $185 million invested , the CueCat was a spectacular failure.
In hindsight, the CueCat’s fate is hardly surprising. But at the time the potential benefits for incumbent companies overshadowed the fact that no one would ever want to use a CueCat. Rather than examining the CueCat’s use case (and realizing it’s absurd), investors focused on the possible outcome: that magazine advertisements and other businesses based on printed material would not only survive the rise of the internet, but thrive by using the web to provide data regarding audience engagement (a brass ring for advertisers if there ever was one). The billion dollar print industry would be saved and everything would remain the same for the media incumbents.
Of course none of this came to fruition. No one used the CueCat1 and Digital Convergence, the company behind the system, folded.
NFC payment systems remind me of the CueCat because they provide very few benefits for users but promise their investors protection from digital disruption. The allure of such protection is sufficient to spur investment, PR, and partnerships. Media companies backed the CueCat in an effort to preserve print and now financial transaction companies are funding NFC systems in an attempt to save point of sale systems and the counters they reside upon.
So, so good. How many other shops will use Kickstarter to fund passion projects this year and at what point will Double Fine eschew publishers for every game they make?
“ The fundamental story of digital media is the commodification of distribution.”
Double Fine Just Used Kickstarter to Fund their Next Game
Their goal was $400,000. They’re at $532,459 in less than 24 hours. Why this matters:
Keeping the scale of the project this small accomplishes two things. First and foremost, Double Fine gets to make the game they want to make, promote it in whatever manner they deem appropriate, and release the finished product on their own terms. Secondly, since they’re only accountable to themselves, there’s an unprecedented opportunity to show the public what game development of this caliber looks like from the inside. Not the sanitized commercials-posing-as-interviews that marketing teams only value for their ability to boost sales, but an honest, in-depth insight into a modern art form that will both entertain and educate gamers and non-gamers alike.
Over a six-to-eight month period, a small team under Tim Schafer’s supervision will develop Double Fine’s next game, a classic point-and-click adventure. Where it goes from there will unfold in real time for all the backers to see.
Funded.
Content Creep Check-In: Salon’s Record Numbers
A few days ago I noted the continuing erosion of “content” based businesses; businesses that use page views and revenue, not quality, to gauge their output.
But enough of the Demand Media deathwatch, today we have some good news: Salon has turned themselves around by focusing on quality first. Kerry Lauerman, editor in chief of Salon, explains how Salon achieved a record year in 2011 and sees trends continuing in January:
We’ve also — completely against the trend — slowed down our process. We’ve tried to work longer on stories for greater impact, and publish fewer quick-takes that we know you can consume elsewhere. We’re actually publishing, on average, roughly one-third fewer posts on Salon than we were a year ago (from 848 to 572 in December; 943 to 602 in January). So: 33 percent fewer posts; 40 percent greater traffic. [emphasis mine]
What makes this all the more impressive is that only few years ago Salon was making the standard metric-centric decisions which lead to the content-crunch:
A few years ago, as Salon (like all publications), tried to right our ship in deeply troubled recessionary waters, we followed the familiar script of other sites — we laid off terrific staffers to lower our costs; we brutally pared down our expenses; we revamped staff priorities so that writers could simply produce more; we experimented in a fair amount of low-calorie aggregation. And yes, there’s that word: Aggregation, the most inflammatory (and sometimes, hilarious) in our industry… At its worst, we monitored Twitter and Google for trending topics, and dispatched an intern to cobble together our own summary of it, posted it quickly, then prayed to the Google gods that the effort would win, if only briefly, their favor.
Congratulations are in order to Lauerman and his team. It’s great to see Lauerman and Salon’s founder/CEO David Talbot betting on quality and succeeding. (Via Kerry Lauerman)
“ News Corp. has spent $30 million on development (which has been “written off”) of The Daily and current costs are less than $500,000 per week, according to chairman and CEO Rupert Murdoch.”
Imagine the iPad newsroom you could build with $500,000 a month. Hell, I’d consider $500,000 a year.
“ Canadian bookselling chain Indigo Books & Music is joining Barnes & Noble and Books-A-Million in their refusal to carry any Amazon Publishing titles in their stores.”
“In our view Amazon’s actions are not in the long-term interests of the reading public or the publishing and book retailing industry, globally,” says Indigo VP Janet Eger. So refusing to stock titles due to business conflicts helps readers?
Protectionism is the last gasp of the obsolete. (Via paidContent)
Our Whale Dependency
Could someone do an investigative report on “whales”, the people whom spend upwards of $10,000 a year on social games? Given the ecosystem these people support, it would be nice to understand who they are and their motivations (addiction? copious wealth? high allowances?).
At first whales seem like a quirk, a funny did-you-know story for light conversation. But thanks to details within Zynga’s and Facebook’s IPO filings we can see that any bubble that might exist is being built on the backs of whales. Consider:
- Zynga designs and optimizes their games around $10k+ spenders, whom make up roughly 5% of their audiences. According to Zynga’s IPO filing, this small percent makes up nearly all of their sales.
- Zynga makes up 12% of Facebook’s revenue. Now consider that Zynga is one of many social gaming companies (albeit the largest). EA has 47,407,020 monthly active users to Zynga’s 241,842,917. Wooga has 40,220,000. King has 25,790,000. Playdom has 14,828,636. Start adding up these smaller players and it’s easy to imagine that 15% or more of Facebook’s revenues are tied to social gaming, which is dependent on 5% of their players.
- Zynga has a $9.36 billion market cap. Facebook’s upcoming IPO is expected to value the company between $75 billion and $100 billion. What % of these figures is dependent on whales?
Given their intricate relationship with social media, it would be best if we understood the motivations of whales, if only to understand what external factors could affect the industry. Combing through news and search results, the best descriptions or examinations of whales I could find were two or more years old. As we build more and more businesses around social media and upload more of our lives online, the need for whale understanding becomes more of an imperative.
Update: I’ve been asked for an example of a risk which could emerge. Older, somewhat thin numbers show Saudi Arabia to be a whale hub of sorts. Does this mean that a green revolution in Saudi Arabia, one which more evenly distributes oil funds or upsets the status quo for the wealthy would decimate a % of whale earnings? Perhaps. I think it would be wise to update our understanding with more robust, more recent numbers.
“ The creepy factor at [Zynga] comes when they start designing for “behavior” instead of game design and fun. Behavior is what they are looking for. Behavior is what they measure, on a massive scale. It’s not about having fun to them, its about monetizing the fun, cloning games, buying indie studios, and suing the shit out of other companies.”
A former Zynga engineer does an AMA. Wish I could say this is surprising.
I can’t wait until casual gamers become more mature, indie developers figure out how to market actually fun games, and the Zynga world of social gaming falls apart.
Also:
Q: How does the creative process work when you are only using data to build a game?
A: Take out the word “creative”.
Content Creep Check-In
An update regarding “content” based businesses:
- Since the original post, Demand Media is down 15% and 3 founders/EVPs have left “coincidentally” at the same time.
- About.com is crumbling, according to recent NYT earning reports. PaidContent’s Jeff Roberts writes, “About.com is in free fall. The New York Times revealed yesterday that its network of information sites suffered a 67% drop in profits and that revenues had fallen by a quarter.”
