I don’t know how many of you remember Evel Knievel and his famous leap across Snake River Canyon. I’m not sure how many of you have read Geoffrey Moore’s seminal “Crossing the Chasm.” But a lot of companies have been floating in rarified air lately, aiming for the opposite cliff.
Unfortunately, they are realizing that the other side of the chasm is a lot farther off than they imagined, and the dirt they’re about to taste is anything but pay dirt.
One company that’s trying to avoid such an unhappy fate is Pseudo, an online network of original streaming content that announced on June 23 that it is laying off 58 employees.
The latest smash-ups do provide a rather morbid fascination. I have to admit that I’m not immune to this fascination, as I find myself logging onto the web site FuckedCompany.com for a daily fix of web carnage.
Pseudo’s announcement hardly brings a smile to anyone’s face (though I bet a lot of those 58 people, with their experience creating online video content, are going to find themselves in sweeter jobs within hours). But neither is the news necessarily a bad thing. In fact, most people are looking on the particular 15 minutes of Internet history we’ve been going through lately as a healthy thing.
Last week I represented the rich media industry on a panel sponsored by DoubleClick geared toward the travel industry. The moderator asked each panelist to imagine he or she was a newly hired marketer for an e-commerce start-up. Our challenge was to assume we had a limited budget and 30 days in which to prove ourselves. What would we do?
I think my answer may have surprised a few of the attendees. With 30 days and a limited budget, I suggested avoiding rich media altogether. Rich media takes time to figure out. It takes creativity to make it work. And it needs to fit properly into the company’s overall goals and strategies, if you want to avoid a major crash-and-burn.
Boo.com, of course, is the now infamous web retailer that somehow managed to burn through money faster than a drunken sailor with a bad coke habit. Boo.com’s demise provided the e-straw that broke the e-camel’s back. And much of the blame was placed on the multimillion-dollar web site jacked up with so much rich technology that by the time they were through only Bill Gates and a couple of engineers from NASA could log on. (And there’s no truth to the rumor that that’s where Bill Gates got all those sweaters he wears.)
Which brings us back to Pseudo. As we reported last week, from a pure connectivity standpoint, broadband just isn’t there yet. At the same time, there is a lot of hype around streaming video, audio and the like.
In fact, in certain circles, streaming video has co-opted the entire rich media moniker with reports, studies and organizations being formed that purport to be about the rich media industry as a whole but are in reality only about streaming video.
Which means that many more Rich Media Evel Knievels are going to launch out over the precipice only to smash onto the FuckedCompany.com page. Which is bad for the industry and bad for rich media.
Nobody likes to see lay-offs, of course, but they do signal that Pseudo has wisely decided to walk before it tries to run. That it is looking for ways to streamline rather than mainline. That it is going to be a little more careful with its cash so that it can still be around tomorrow.
And being around tomorrow is worth enduring some pain now. Hear this, from “Rich Media Reality: Defining the Emerging Landscape,” a new report from Friedman, Billings, Ramsey & Co.: “Derivations of traditional media and new rich media revenues will comprise at least one percent or $8 billion of the total MEC [media, entertainment, and communications] market, expected to be $831 billion by 2004.”
That’s not chump change.
The FBR report also suggests that “those service providers which offer a complete solution set, from production through streaming of an event, will capture the largest market share as companies seek out seamless development and management of their digital assets.”
If FBR’s analysis proves sound, then Pseudo unlike pure aggregation plays like Broadcast.com stands a good chance of landing solidly on the other side of the chasm. And really hitting pay dirt.