Garaphernalia 7.5

If you haven’t seen it, you really need to check out rocketboom.com. Its probably the most popular, daily video blog on the internet. They have been doing it for a year just for fun, but recently decided to sell advertising.

They sold the rights to be the first advertiser on ebay. It sold for $40,000.

What did they sell? From their ebay listing:

For the highest bidder, we will create five original, fifteen second (minimum) – one minute (maximum) post-roll commercials that will span five days of programming, Monday-Friday, March 6 through March 10, 2006. Each day that week a different commercial that we create for your company will be played at the conclusion of the Rocketboom episode.

Rocketboom reaches a minimum of 130,000 people per day and each day’s video, over the course of several days, receives over 200,000 complete views. Thus, the advertisement reach for this auction is currently a minimum of one million views.

From a strict CPM (Cost per thousand) basis, that’s a $40 CPM. Given that they are producing the ads (which also reduces costs for the advertiser), I’m guessing most people will watch them because they’d probably be entertaining. From a quickie google search, a cheap 30 second TV spot can easily go over $100. Buying advertising on Rocketboom will get you 1,000,000 viewers and a 60 second spot. Moreover, the people who watch Rocketboom do so because they went out of their way to visit it. They probably wont sell every ad at that high of a rate, but it establishes a good point from which everyone else doing video blogging can work from. There is an argument that certain video blogs could command a much higher CPM that some network or cable shows becuase they have such a highly targeted audience.

Rocketboom is a 2 person operation. $40,000 is a huge amount for an show like that. Its a good deal for everyone. Its a great deal for the advertisers, its a good chunk of change for Rocketboom, and everyone who watches Rocketboom will get to keep doing it and can skip the ads if you want.

This is just a first salvo in the war, but if they’re smart, the television networks need to pay attention to this. Networks are vehicles for production companies. If you produce a show, you don’t need the network anymore. Sure, the reach of a network is a lot bigger than what your going to get online, but you don’t need to be a geologist to understand that trends in this area are not looking good for them.

Another group that should be interested in this are the ad agencies. They got bypassed totally in this affair. The sale was done in an open auction, and the creative is being done by the same group showing the ad. There is no middle man.

Rocketboom FTW.

Its amazing what people are finding on Google Maps Satellite images.

My high school in Appleton, WI was a round building. Like a three story squat silo. One year, as the senior prank, some kids got on the roof, and painted a giant yellow smiley face on it that you could see from an aircraft. They probably still have a photo of it in the office. Most of the paint has probably worn away by now. It would be cool if it could actually show up on a satellite photo…

If any enterprising Appleton East Patriots out there are reading this…….you have your assignment.

It appears I’m not the only one at the University of Minnesota investigating the important questions that nag our species. (Scroll down for my previous post on the content of McDonald’s milkshakes)

Edward Cussler in the Chemical Engineering Department, recently took the time to answer the age old question: can a human swim faster in water or syrup?

Its really not a dumb question. Isaac Newton and Christiaan Huygens argued about it in the 17th century. While syrup would seem to provide more resistance and slow you down, it would also provide more resistance on each stroke generating more force.

For those of you too lazy to read the article your self, the answer is: it doesn’t really make a difference. You can swim about the same speed because the two forces cancel each other out.

More on the great milkshake mystery next week……

Somewhere in Texas is a guy with a big ego. A BIG ego.

So big, he felt it necessary to spell his name out in groves of trees that stretch several miles.

The big LUECKE is actually used by space shuttle astronauts to determine what resolution they can see stuff from space.

The real question is, how big is that font?

According to a NASA website, each letter is 3,100 feet long.

The generally accepted size for a point in fonts is 1/72 of an inch.

That would mean that a 3,100 foot tall letter would be equivalent to a 2,678,400 point font.

Try to select that option in Word.

If you haven’t noticed, I’m on fire today….. 🙂

There are some people who, for fun, like to write screenplays. They don’t do anything with them, they just write them and stick them in a drawer. I like to work on business plans.

I don’t do much with them either. The venture climate in Minnesota is as cold as the climate climate. To take the term literally, I don’t think there actually is a “venture” capital community in Minnesota. There is captial, but no venture.

Anyway….

I get a lot of ideas for new businesses. Some are pretty bad ideas, and I can recgonize that a few seconds after thinking about it. Some are good enough that they stay alive for a few years.

One of my favorite memes is the idea of the Long Tail (see the title of the post below). The idea is a pretty simple one, and if you spend enough time online, its probably a no brainer. As content becomes more digital and easier to create, there was be a greater fractionization of tastes. Blockbusters and hits will become less and less important. More and more money will be made off selling the bottom 10,000 movies/songs/books than will be made on the top 10. With network television in decline, there is less and less of a uniform culture where we are all consuming the same media. We end up having very individualized tastes and consuming patterns in media.

This is huge implications for the media business. It means fewer newspaper sales, fewer blockbuster movies, fewer platinum records, but more overall choice in music/film/books.

One business which has been widely considered to be in decline is the motion picture industry. People are seeing fewer movies in theaters, in lieu of renting DVDs and there are fewer big movies.

This is bad for theaters because they are built around the idea of the big picture and the big opening weekend. The theater near my house is really a nice theater. I’d argue its the nicest, or one of, in the Twin Cities. It’s an AMC theater in a mall. The seats are comfortable, stadium seating, and very big screens. The problem is, it’s totally overkill for 90% of the screenings they show. They might fill up and auditorium on a Saturday night for a first run movie, but for the rest of the week there are far more empty seats than people in front of each screen.

This is a problem. Building a new theater in a mall is not cheap. They have to amortize the cost of the buildout over a long time. Most of that cost goes completely unused 90% of the time. They make the vast majority of their money off of concession sales. They have to have an infrastructure to handle the busy weekends, but it too goes unused most days.

To top it all off, they are dependent on Hollywood on what they can show. If they put out crap, they have to show crap.

I think the answer to the problem the theater industry is facing is to embrace the long tail.

Here is what I’d do in the Gary theater:

– Most screenings of a movie will have 20-50 people. Build a theater to that size. Have very intimate theaters that are more akin to a large screening room than a traditional theater. Keep the comfortable seating and make the proportional screen size the same as a big auditorium. The experience of any given person shouldn’t be too different. It can actually be much better given the brightness used for most projectors, and the distance most people are from speakers.

– Remove all film projectors and use 100% digital. With smaller screens, you can get projection equipment which is very good, but a fraction of the price you’d pay for a projector for a large auditorium. The cost doesn’t scale linearly. You can get a good projector for a 200″ screen for $5-10k. A big auditorium projector can go 10-20x that.

– Remove yourself from the big studio distribution system. Once you go digital, your flexibility increases dramatically. In fact, you can show films directly off DVD and still have great quality. You can show old movies, foreign films, indie films, and if necessary main stream releases too. Because its all digital, you don’t need week(s) long runs for a film. You can easily run it one or two evenings without the overhead of shipping film reels.

– Aim for niche markets. When someone shows the Lord of the Rings trilogy back to back to back, you can be sure they theater will sell out. Same with Star Wars. There are foreign communities which might not have enough people to justify a big theater, but could easily have enough people to have a small auditorium for an evening.

– Serve yourself popcorn and soda.

Not only would you reduce your costs across the board (often dramatically), but you’d increase your margins on each ticket sale because your not playing first run films. You could sell concessions for 50-75% of the cost of a regular theater, give people a deal, and still have higher margins. At my local AMC, I usually try to count the number of people working at any given time. I usually count between 15-30 depening on the night of the week, and that’s just the people I can see. I figure you could have 8 small screens, run by 2-3 people and serve as many people as a large theater most nights of the week.

And you can also put this type of theater in small towns and other non-traditional locations.

The cost of getting this idea off the ground could be done with only a few $100k. Its a matter of working with the studios.