GenDigital

The Hills "Bonus Season" Is Really A Huge Bonus For MTV

Well, all I have to say is wow, or even super wow to numbers that came out for last week's first episode of "The Hills" bonus season supplement to season three. Last Monday's episode drew in the most viewers ever for MTV's top rated series. It narrowly beat out the December finale by 100K viewers to come in at 4.8 million viewers. Just as impressive, MTV said it had 1.8 million streams of the episode last Tuesday, the first full day after the episode ran on-air. In the coveted 12 to 34 year old viewing demographic, last Monday's Hills premiere was far and away the most watched prime time show. Clearly, the bonus episodes will provide MTV with some extra juice as they head into the upfront buying season as they once again defy the skeptics by their uncanny ability to draw more young people than anyone else. Bonus episode 2 of 8 airs tonight at 10pm EST.

WePlay Wants In On Popular (and crowded) Online Youth Sports Space

Oh no, it can't be another one, can it? Apparently it is, and a nice featured story in today's NY Times to go introduce it. The online youth sports category is like an oversold flight from Newark to West Palm Beach (New Yorkers who regularly fly to south Florida on Continental know what I mean). Basically, the aren't enough seats for everyone and if you're stuck in the back, there is no way you're getting the snack you want, some lucky guy sitting 10 rows up just snagged the last one. Since I'm in a metaphorical mood, let's equate the lack of snacks on the jam packed flight to ad dollars for a moment. You have all these youth sports sites launching essentially going after the same marketing dollars. There is not enough to go around and for the most part, all of these sites have built their model exclusively as advertiser supported. Yes, the numbers for involvement (both direct and indirect) for organized youth sports, be it high school or elementary/middle school is huge. There wouldn't be such a thing as a soccer Mom if it weren't for organized youth sports. But take a reality check for a second, do you really think that all of these sites will be able to scale their member bases let alone secure ad dollars? The only edge WePlay has is that they're positioning their offering towards pre-high school kids, parents and coaches as opposed to the emphasis on college recruiting for high school athletes utilized by quasi competitors like MaxPreps and Takkle. In reality though, they'll all be chasing the same ad dollars. WePlay is backed by financial heavy hitters and marquee brands and individuals including Major League Baseball, talent agency giant Creative Artists Agency and even baseball star Derek Jeter. A note of caution though, lining up these marquee investors doesn't automatically guarantee success. As the Times writer points out, during the height of Internet frenzy, venture investors and sports stars launched MVP.com, which I remember quite well. With a ton of money raised, MVP sits alongside other big name causalities like eToys, Digital Entertainment Network and my personal favorite Kibu. Of course, at the end of the day, I'm just a little youth marketing guy so perhaps the stars and big time investors behind WePlay see something I don't.

A New Entrant In The Cola Wars With A Familar Name

Red Bull, the number one energy drink brand among teens and college students, is launching a new 100% natural cola brand this June in hopes of reinvigorating a declining carbonated beverage market. As we've noted previously, teens and college students have been shifting their beverage purchases in recent years towards bottled water, sports and athletic drinks and of course the still fast growing energy segment. So why would the number one energy drink brand take a risk and make a run of it in a declining category? It seems a little bit contrarian, but sometimes those contrarian approaches can pay off, big time. For one thing, Red Bull commands the highest brand loyalty rate among teens and college students within the energy drink category. It's not that much of stretch to say they can leverage that loyalty in another category. It's not like they're entering the game with a no name brand, after all it will be called Red Bull Cola and the packaging looks similar to that of their ubiquitous energy drink coming in 8.4 ounce cans that will be available at the bars and restaurants and 12 ounce cans that can be purchased at c-stores and supermarkets. The other thing they have going for them, and this is something that can certainly not be underestimate is the whole natural cola thing. It is no secret that young consumers are actively looking for and purchasing more and more all natural products. Have you been in a Whole Foods or Trader Joes store in a college town lately? If they stress the all natural make up of the beverage, they'll receive a much stronger response. The last thing they have going for them is ease of availability. Unlike the plethora of new beverage launches that aim for broad consumption among young people but lack the wherewith all to get their product on or near campuses, Red Bull energy drinks are already widely established at most tier one campuses. Making a little bit of room for Red Bull Cola shouldn't be too much of a stretch. We'll have to wait until June to see what the audience thinks, but based on all the Red Bull brand has going for it, there is no reason not to think Red Bull Cola won't be able to grab share away from category leaders in relatively short order.

New and Promising MMOG For Students & Alumni

It is a rather daunting task to always try and keep one or two steps ahead of market trends. Occasionally stuff pops up or lands on our radar and catches us a little by surprise. Fortunately for us, the NY Times did not miss this. In today's online version of the Times, a fast growing MMOG (massive multi-player online game) targeting college students and alumni is featured. It's a great read. The game is called GoCrossCampus and was started by five Ivy League students last fall. In a fashionable grassroots manner, the game has already spread to nearly 25 campuses since going live. Does this remind you of anything? Certainly the game and aspects of the game is not appealing to all students like the way Facebook is, but what I like best about the game is its relative simplicity combining the social aspects related to school loyalty and good old fashioned competition. What's more, their model can scale to corporate customers (Google is already one) and different types of national organizations. At its essence, the game is this generation's online version of strategy and warfare games Risk and Battleship on steroids. I think there is huge potential for their offerings especially as they continue to grow their player base for marketers to step-in and get involved with some non-traditional tactics. I'm just happy I didn't miss this one today because I'm certain this is not the last time we'll come across them.

Fynanz: P2P Student Loans

Ok, the second little critique for the day. Unfortunately, like KidZui, I don't have a very good feeling about this service either. I can't help it (and no I'm not in a bad mood today where I feel like ripping on anything and everything) but please, the name alone is enough to make me hurl. Fynanz? Experienced youth-focused marketers all know by now that if you try to be too cool for school, so to speak, then your dead before you even start. The new service I'm talking about is Fynanz, a P2P lending service for student loans. Following the P2P lending model of established players, mainly Prosper, Fynanz hopes to turn the college student loan industry on its head by providing an alternative P2P channel for students seeking school loans. Their catch, unlike other P2P plays, is that they guarantee the loans which provides a sense of comfort for individual lenders. I still think drawing lenders in will prove to be more difficult than they anticipate. Also, when it comes to financing student loans, our data shows that it is really the parents leading the charge not the student, so from their appearance, it looks like they're targeting the wrong end-user. The service is limited now to students in New York and Florida but the company expects to expand to the rest of the country later this year. Since today is the start of March Madness and everyone seems to be in a bit of a betting mood, I'll give Fynanz a 2 in 10 chance of making a run of it.

KidZui, Latest Online Kids Play Joins Already Crowded Field

KidZui, a San Diego based web start up has just raise a sizable amount of investment capital from some blue chip VCs to join the very crowded kid and tween-focused category led by Club Penguin and Webkinz. The upstart has raised a total of $8 million so far from firms including Maveron, the venture capital firm of Starbucks founder Howard Schultz. Other firms backing KidZui include Emergence Capital Partners and First Round Capital. My first take is that KidZui's institutional backers will probably not see a great return on their investment in the kid-focused start-up. I honestly think their subscription-based model will not work and also question some of the metrics they have released previously. Before jumping into their stats, lets consider their competition. The 900 pound gorilla in the room is Webkinz, which diffrentiates itself from KidZui as a entertainment service with multiple revenue streams. They have an extremely loyal following of kids, just ask any of our younger tween panelists. The other key player in the category is Disney-owned Club Penguin, another subscription based model. Both services have sizable existing membership bases and real revenues. The problem I have with KidZui is their value prop. They aren't really a true subscription based service, instead they're really just a software app. The essence of the app is a filter like service that reviews sites they deem to be kid friendly. In total, according to their release, they have approved half million sites, images and videos. To reach this number they have 200 "editors" which means each editor, on average, has reviewed 2,500 sites, images or videos. That seems a little aggressive. What seems even more unrealistic though is their subscription model. Their hope is that parents sign up for the service by paying $9.95 a month or $99.95 a year, download their browser, have their kids create a profile avatar and surf away on the 500,000 or so sites and surf away. Frankly, I don't think the majority of kids and tweens will find it to be that appealing. With services like Webkinz and Club Penguin there is immediate gratification where as with KidZui, there is no underlying value other than the opportunity for the kid to surf around a site that has been approved for use by a subjective editor. So really, it's more of a filter than anything else designed to give the parent a sense of comfort that their child's Internet use will be based on family friendly fare. I just don't see it, may be I'm missing something, but I have hard time thinking this model will stick.

High School Confidential Scores

I have to admit this one came as a bit of a surprise. Anecdotal research from panelists showed relatively low levels of awareness for WE's High School Confidential and only fair levels of planned viewing. Clearly, we must have missed something. The premiere ended up with 1.3 million viewers, an all-time high mark for the tier 2 cable network, according to Nielsen. I DVRd the episode but haven't watched it yet. I didn't realize until this morning that they were only running eight episodes, no doubt their testing the waters before making a larger commitment. If the numbers hold up around 1.0 million viewers, there's little doubt the show will be back. I first posted about HS Confidential over the summer. The concept that the reality series was something of an epic following a group of upper middle class teen girls through four year of high school seemed interesting...interesting enough that more than a million people tuned in for the premiere. Now the real challenge, can they hold on to their audience and possibly even grow it? I'll let you know my thoughts after I watch the first episode tonight.

Wow, AOL Enters Social Media Game With Bebo Acquisition

First off, the lack of new posts over the past week and half is due to "all hands on deck" for preparation of the release of our next wave of Tween and Teen Lifestyle. Now back to the story...I guess the theory of why build when you can buy plays into AOL's thinking as they snapped up Bebo yesterday for a cool $850 million. Bebo is considerably more popular outside of the U.S. especially in Europe. The largest portion of their site traffic comes from the U.K. which had about 11.5 million unique visits in January, 2008. At first glance, the $850 million price tag paid by AOL seems pretty rich. Bebo generated about $20 million in sales last year and about $5 millions in top-line profits before taxes and other items. So AOL is paying about 43 times their '07 revenues. Clearly, AOL brass sees a lot of opportunities for Bebo, otherwise why would they pay such a high multiple. I would have to think will all of the shifting and arranging going on at AOL over the past year, the mobile social networking capabilities and opportunities that Bebo offers has to be one of the most if not the most compelling part of the growth story. I also pretty sure that the strong international component resonates as well, since many international markets are seeing even stronger growth in Internet advertising than the U.S. In the U.K. the Internet ad market is second only to television. The other way of looking at would be that AOL provides the immediate scale that Bebo needs to crack the U.S. market. AOL can integrate their high profile elements like AIM and position Bebo as a strong alternative to MySpace and to a lesser extent, Facebook. But in the end, my gut tells me this is more of a forward thinking mobile social networking play more than anything else. Obviously AOL read all of the industry reports and projections for the fledging category, otherwise I don't see why they would wager this kind of bet.

Online Video Marketplace Continues To Heat Up

Social media aside, nothing seems to be grabbing more headlines and venture dollars these days than the online video category. Two players in the space recently announced new capital raises. The first company, Generate, started by WB vet Jordan Levin, raised $6 million for expansion. Generate is kind of a hybrid online production studio and talent management agency. They have already have a sweet development deal in place with MTV and I'd expect more will be on the way over the coming months. The second announcement comes from ManiaTV who raised $5 million on top of $17 million they raised previously. Clearly, they are well capitalized to execute their strategy. ManiaTV, like Generate to some extent, targets the youth market with their content offerings. You can draw some parallels with the social media category. There are so many players competing for the same ad dollars from brand marketers that inevitably, there has to be some sort of shakeout. Who will be the first to fall and who will succeed remains to be seen. But remember from years past, it's not always the strongest capitalized company that takes the prize.

Facebook Going After MySpace's Bread & Butter: Music

Well, it was bound to happen eventually...right? Facebook is going after MySpace's original niche with a new music offering and better yet, the dominant social networking platform for teens and college students has hooked up with the number one name in digital music: iTunes. Further details of Facebook's music endeavors will be unveiled at next week's SXSW conference in Austin when Facebook CEO Mark Zuckerberg takes the stage to deliver the keynote. I would have to say this is first real big move by Facebook into MySpace entrenched territory. For quite some time now, MySpace has had a stronghold on the music category for up and coming artists and the various sponsorships, contests and sweepstakes associated with them. With a hyper active developer community on board, who knows what can happen six months from now. Facebook might end up taking away all of MySpace's music gusto. We'll be keeping a close eye on how everything unfolds next week's SXSW conference and post updates and thoughts accordingly.