Verizon issued its Q3 06 earnings report this morning, with the incumbent telco posting pretty decent growth in net income — the same as its peers AT&T and BellSouth. Thanks to wireless and broadband growth, Verizon’s revenues ticked up during the quarter (increasing 3.6% year-over-year and 2.5% sequentially), while net income rose 2.8% year-over-year and 2.6% sequentially. Note that the data at the end of this posting reflects Verizon’s pro forma results, i.e. as if its acquisition of MCI had been in effect during 2005 and 2006. Verizon tends to place its actual results front-and-center. These actual results compare Verizon’s performance without MCI to Verizon’s performance with MCI, which to me is too confusing.
The most interesting news is that Verizon’s FiOS high-speed service is fueling continued, accelerating growth in the telco’s broadband subscriptions. While AT&T and BellSouth reported declining quarterly growth in their DSL offerings, Verizon added 448,000 net new broadband customers during the quarter, a run-rate 16% higher than the 330,000 net new broadband customers added during Q3 05, and 2% higher than the 440,000 net broadband additions posted in Q2 06.
Even as the growth in the mobile voice business continues to slow due to increased saturation (namely most people have cell phones), Verizon Wireless continues to post healthy gains. The wireless arm netted an additional 1.86 million new wireless voice customers during the quarter, down only slightly from Q3 05 levels and up slightly from Q2 06 levels.
Posted by Cynthia Brumfield at 6:26 PM | Print | Comments (0)
NYU Professor Clay Shirky has this potentially groundbreaking piece in Wired magazine this month which gives a name to the phenomenon of narrowly targeted web sites that nonetheless attract vast numbers of visitors. He calls these sites, which generate at least one million visitors per month, “meganiches,” a contradiction in terms that seems so apt in describing all the tens of thousands of web sites that fill unmet, and sometimes incomprehensible, needs.
Some of these special interest sites can reach as many people as a major metropolitan newspaper’s print circulation. With more than one billion people online globally, a tiny sliver of web traffic can translate into very big numbers.
Now that more than a billion people have access to the Web, there is no longer a trade-off between size and specificity. The basic math is simple: A tiny piece of an immense pie is huge. A decade ago, reaching one-tenth of 1 percent of Web users amounted to 36,000 people, a number that compared favorably with the circulation of, say, the daily newspaper in Bridgewater, New Jersey. Back then, reaching a million users required a decidedly mainstream offering (Amazon.com and MSN come to mind). Now, getting niche can be the path to getting big; one-tenth of 1 percent of today’s Web audience is a million people. Forget Bridgewater — the Net is chockablock with special-interest sites and services you’ve never heard of but whose user base exceeds the print circulation of The Washington Post.
He offers as an example an obscure web site called Gaia Online, which targets anime fans, but in a very specific way, allowing users to upload their own drawings and functioning as a cross “between a bulletin board and a massively multiplayer online role-playing game.” As Shirky points out, Gaia is not for everybody.
Anime role-playing and tutorials on how to sketch girls with really big eyes don’t hold much interest for, oh, 99.9 percent of the Web’s population.
But, Gaia has a lot of fans — the site has more than four million registered users and generates traffic levels on par with RollingStone.com and MaximOnline.com.
Then there are the inexplicably popular sites, such as YTMND.com, which started as a single page riffing on a line from the movie “Finding Forrester” (when Sean Connery says “You’re the man now, dog”) into a meganiche that draws millions of visitors per month.
YTMND.com now hosts thousands of user-created Web pages, known as YTMNDs, that combine a background image, a sound clip, and rudimentary animation. The effect is often comic but frequently inexplicable, the ultimate inside joke. You might not think an animated hand drawing breasts on a comic-book heroine to a snippet of A-Ha’s “Take On Me” is much of a knee slapper, but a surprising number of people can’t get enough - which, of course, is the very definition of a meganiche.
YTMND.com gets millions of unique visitors a month, more than 100,000 of whom have contributed YTMNDs. Supported entirely by Google ads, Goldberg does all the system administration but mainly tries to stay out of the way. “The site sort of runs itself,” he says. His success illustrates an unexpected dimension of the meganiche’s power: What begins as an isolated sarcastic gesture can become the world’s biggest inside joke.
Meganiche sites can generate decent ad revenue for their creators, with the costs to develop and run the sites minimal. But, Shirky warns that the rise of meganiches may already be over because the influx of ad revenues is changing the competitive landscape, attracting big companies (think News Corp.’s purchase of MySpace) looking to actually design meganiches, which, to date, have arisen almost by happenstance. Plus, the hypergrowth of the Internet is over — with a billion users already online, growth will slow.
I’m not sure I agree with Shirky on this last point. With nothing but imagination limiting web site creators and given the open nature of the Internet, it’s still conceivable, and probably likely, that hordes of new sites will come (and go) that are capable of attracting and sustaining, for some period of time, millions of visitors.
Posted by Cynthia Brumfield at 8:36 AM | Print | Comments (0)
Business Week’s Catherine Holahan has this interesting piece about how creative talent — actors, video directors, vloggers — are making money off their Internet video performances and shows. She starts with an obvious example: Amanda Congdon, formerly of RocketBoom fame, who has inked a deal to be a media correspondent and video blogger at one of the three (presumably CBS, NBC and ABC) big broadcast networks.
But the other examples are far more intriguing. For every Amanda Congdon, there are probably ten Joe Eigos. Martial artist Joe Eigo has generated real revenue with his series Matrix for Real, which is self-published on MetaCafe. Eigo has apparently earned $23,000 in two months under a producer rewards program established by MeatCafe that pays contributors based on viewership.
Others video auteurs, such as Kent Nichols, co-creator of Ask a Ninja, are actively selling advertising themselves to generate revenue. Hosea “Ze Frank” Frank, creator of The Show with Ze Frank, is one online video entrepreneur who has landed some big ad supporters. He thinks that once better audience measurement tools come along, a lot of people will be able to make a living selling videos on the Internet. (BTW, the New York Times’ Louise Story has this article today on advertisers’ demands for better click-through and viewership data.)
Frank believes that once advertisers become more comfortable with the online space and measurement tools, video creators will be able to support themselves in several different ways including licensing agreements, advertising revenue-sharing agreements with host sites, and straight advertising deals. “I think there are a few different business models that are going to emerge in this space,” says Frank. “We are really in the middle of figuring all that stuff out right now.”
Others don’t make money off their web videos directly, but use them as a springboard for promoting other revenue-generating activities. Steve Garfield uses video to snag consulting and speaking gigs.
Steve Garfield, one of the original video bloggers, is one of the online stars who gets paid to make appearances in the real world. Garfield now supports himself through video blogging, speaking engagements, consulting, and Web video production work—all bolstered by his online fame. His shows, including the Carol and Steve Show that he runs with his wife, receive more than a thousand hits per day. “I am not generating a ton of money off the advertising,” says Garfield. “It is just something to cover the hosting fees. The speaking and consulting on video blogging complements it.”Posted by Cynthia Brumfield at 8:07 AM | Print | Comments (0)
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