GenDigital

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.

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.

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.

CollegeHumor Turns To Online Video

CollegeHumor has become the latest online content provider to launch a video channel on the fledging Joost network. The new channel, dubbed CHTV: CollegeHumor Original Videos, will feature a series of short videos including "Street Fighter: The Later Years," "The Michael Showalter Showalter," and "Prank War," among others. What's more, there is also a rumor circulating around some of the more well known tech and media blogs that the CollegeHumor crew, now part of the IAC family, has landed a television deal with MTV. If it turns out to be the case, that would be really interesting. According to the most recent Top Ten List Report for Q1 '08, CollegeHumor was the fifth most popular web destination among college men twelfth most popular among college women. The Q1 results were the strongest to date for CollegeHumor, which in typical Internet rags to riches fashion, was started by group of college students in their dorm room back in 1999.

Facebook Pulls Back on Beacon, Effective Marketing Tactics on Social Networking Sites Remains Up For Debate

It didn't take a rocket scientist to see this coming. After a tumultuous couple of weeks since announcing what was heralded as a breakthrough in online and word of mouth advertising, social networking kingpin, Facebook, has announced changes to its Beacon advertising program. In case you're unfamiliar with Beacon, essentially, the system utilizes the platform to send a Facebook member's friends a message on what they are buying from a variety of partner sites ranging from Fandango, the movie ticketing site to the online discount retailer, Overstock. The controversy from the member base stemmed from confusion and difficulty with respect to opting out of the service. What has been documented so far includes member accounts of having their holiday purchases"broadcast" to the friend base unknowingly and then of course having the boyfriend and girlfriend find out about the surprise a few days or a few weeks too early (depending on your religious beliefs). A lot of people this morning are comparing the pullback and adjustments to Beacon to the challenges the Newsfeed application faced earlier this year, but I don't really see the similarity quite frankly. Luckily for us, we were in Chicago conducting client focus groups at the time Facebook announced the launch of Beacon so we were quickly able to get a sense of what the target audience thought of it. To keep it nice and p.c. on this beautiful fall Friday, let us just say we saw this coming. Here's the deal. A lot of supposed "experts" have been talking up the power of marketing on social networking sites. The problem comes up when these experts talk about the tactics of doing so. This is where Beacon ran into problems.  First, the notion of "personifying" a brand or product in a social network like Facebook is...well bullshit. The audience, especially the college audience sees right through it and most likely with some disdain. Second,  the whole notion of "friending" a brand or product works only when the brand or product is contextually relevant, key word really being contextually. We have to throw out the bullshit flag again when we read or hear folks talking about how much the youth audience loves to enter into conversations with brands and products. The statement is made far too often and is only remotely accurate for a very, very small percentage of the overall audience. If brands and products want this two-way conversation to begin, typically, the best chances of success start with a contest/sweepstakes (it's fair to say that almost all members of the audience love to win or at least have a chance to win free stuff), doing a live event (teens and college students respond and respect the fact that brands and companies visit them live, in-person on campus or at school), or create a tool or service that is deemed relevant or thoughtful and will add some sort of immediate value to members of the audience. After one of more of these "intro" tactics are executed (successfully, of course) then you can go into the other stuff. I apologize, I know I got a little off topic from the start of the post, but I believe it's imperative for all readers to know and understand the realities of the current social network marketing space, because there is way too many people out there saying just flat out incorrect things with respect to best practices for marketing. Ok, rant done, have a great weekend. 

Product Watch: Will Amazon's Kindle Be A Holiday Barn Burner?

When you get a chance check out Amazon.com's new electronic reader they're calling Kindle. According to Amazon, Kindle has been nothing short of a labor of love taking more than three years to develop, a lifetime and a half in the Internet and Technology industries. It's not a market first, Sony has had an electronic reading device on the market for a couple of years now, though you don't hear a lot of buzz about it. Our initial thought here was the device would be a nice academic tool and perhaps there was an opportunity for Sony or whoever was marketing the device to push some sort of institutional sell to schools and universities. In the case of Amazon's new Kindle device though, it seems like more of a calculated risk. There are only 90,000 of them for sale right now. They have already cut content partnership with blue chip providers i.e. NY Times, Time Magazine, etc. The only thing standing in the way of pushing out the first batch of 90,000 is price, the device costs $400 smackers, not exactly a drop in the bucket. So, is this appealing to the youth market? Probably not, as more teens and college students are more likely to own multimedia smartphones, the need for another reading type device goes by the wayside pretty quickly. Still, reading the product specs, it is definitely a cool little device, it weights less than a pound, has a large hi-res display and a fast wireless chip.

MTV Moves Ahead With Mobile Social Net For Tr3s

MTV announced plans to launch a new mobile social network that will be called Con3xion (Connection) to support its fledging Latino youth targeted channel Tr3s (Tres or Spanish for 3). It's nice to see that they are sticking with the concocted naming hybrids. Anyway, the new mobile social network is expected to launch in a couple of weeks. Per the release, network executives noted the "huge consumption of mobile content" by Latino youth. They went on to say that Latinos are significantly more likely to own multimedia phones compared to non-Latinos (63% vs. 46%). Those numbers seem a little bullish to us, but they could certainly be referencing a wider demographic range. Based on our latest general Lifestyle and Latino youth Lifestyle Report, 36% of teens and college students owned a multimedia phone compared to 29% of Latino youth, granted this data is from our Spring wave, but it is doubtful that ownership levels doubled in less than six months, so I would have to think they are talking about twentysomethings as well. The Con3xion network will enable users to view photos, send and receive messages, search profiles and post comments, all of which will be accomplished through the user's mobile device. The company partnered with San Diego-based Intercasting for the launch. It will be interesting to see if this new program is able to gain traction quickly, we are a bit skeptical based on the relatively narrow audience target.