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Old November 3rd, 2006, 08:57 AM   #1
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Can this .COM succeed?

I'm looking for some advice. I have the opportunity to purchase a failed .COM. The .com put indie films online in iPod format for people to purchase. The profits were split 60/40 with the creator of the content. The site included short films, how to video, animation, full length documentaires. Basically take all the great indie content out there (the content that iTunes wont' take) and make it avaialbe for people to purchase for a buck or two.

The founder of the site says that he just didn't devote enough time to make it work.

The problem with this business is the high bandwidth costs. It looks like you would basically need a dedicated server with at least 1500GB bandwidth. That is going to run about $200/month. I have no money so I'd beg, borrow and steal to get some seed money to purchase the site and then pay for hosting for a year to try to grow the site.

So...what do DVinfo readers think? Would you pay for indie content? Or do you feel you get enough from free podcasts, vidcasts and YouTube?

Do you think it is worth it to take a chance on this, put 10k into the business in hopes of selling the .com down the line?

And on the technical side--would it be possible to use a shared hosting service for this site? Some of the videos could be 30 minutes long-150mb in size.

Thanks for any advice.
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Old November 3rd, 2006, 09:03 AM   #2
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Don't do it. You'll blow through a whole bunch more than the server cost, and there are tons of competitors with the upper hand of already existing and having more or *any* cash.
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Old November 3rd, 2006, 09:27 AM   #3
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Are you a techie? This is not a job for videographers.

Last edited by Emre Safak; November 3rd, 2006 at 05:36 PM.
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Old November 3rd, 2006, 09:36 AM   #4
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not having enough time is the excuse given for so many failed ventures. If i-tunes don't want something, are you sure you do? My feeling is that they don't want them because these 'customers' don't have much disposable income to spend on downloads - that they at present assume should be free!
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Old November 3rd, 2006, 03:58 PM   #5
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Quote:
Originally Posted by Brian Andrews
I have no money so I'd beg, borrow and steal to get some seed money
Aside from the points that others have made, I'd say you're in trouble from the very beginning if this is the case.
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Old November 4th, 2006, 11:55 AM   #6
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Wont work... there is no good way to market a pay site other than spending a LOT of money. The model that "might" work is giving away the videos for FREE and having sponsors somewhere in the middle as the movie downloads, etc. This requires some relationships that you probably dont have however.

The thing to realize that people often skip over, is that while the internet does have a lot of money to be made...it also has a lot of money to be lost. The cost of entry into an internet business is just low enough that many people do it without enough preparation and find that the overhead ends up being far more than they thought.



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Old November 4th, 2006, 02:59 PM   #7
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Brian, everything that's already been said is spot on. It's really only an opportunity for the current owner to pass his problems and half-baked business idea off onto you.
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Old November 4th, 2006, 03:47 PM   #8
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You also have to realize that Google is already selling programs from Independent Producers that Distributors didn’t want and Amazon is about sell independent programs online as well. It would be extremely tough competing against Google and Amazon.

Google for example, gives the Producer 70% commission. Basically you would have to offer a much better deal such as 75% commission for the Producer and 25% for your company. Afterwards you would have to spend loads of money on advertisement to make sure you get enough traffic.

PS: Make sure you fully understand the new bankruptcy laws before you try to do something like this. You never know what will happen.
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Old November 4th, 2006, 10:55 PM   #9
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I think some startup ideas just aren't as good as others. For example, Paul Graham founded Artix before making Viaweb. Artix was a dud. Viaweb was sold to yahoo for millions and is now Yahoo store.

http://www.paulgraham.com/bronze.html

In this case, there is evidence that this startup is likely a dud. Why not come up with a much better idea? (i.e. like online stores, but that's been done). Look at some need that you could fulfill. i.e. people on the subway usually aren't doing anything and could use some entertainment. Maybe you could develop an application that downloads videos (maybe use bittorrent to save bandwidth) and formats it into the correct format (ipod, PSP, cell phone, whatever). Convenience is pretty important here, and also some way of filtering content for good stuff (i.e. by genre, user ratings, # of downloads).

I might want to watch different indie films while I'm commuting. Of course, there may be even better ideas (this one may not even work).
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Old November 13th, 2006, 10:23 PM   #10
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If the failed .com is Hungryflix, don't do it. I had some material on there, and the site essentially recieved no traffic and about a dozen sales per month (not of my stuff, that's sales overall). I think you need to consider that as a failed .com it may have left a bad taste in the mouths of both content providers and the few customers it had.
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Old November 14th, 2006, 12:23 AM   #11
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Brian, come up with some good names and then see if they're available.
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Old November 16th, 2006, 01:09 PM   #12
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Big pond, big fish, no net

Unless you have an enormous amount of capital and an idea that is better than those large competitors or the failed plan -forget it. Take your money, invest in real estate or something that will generate a profit as it is resold. That idea is like the equivelent of going up against iTunes. Unless you have a new twist on it, it'll die like a moth to the flame. I know I wouldn't pay for indie content, heck I won't pay for pro content. There is still way too much FREE out there to not warrant purchases, at least in my case and IMHO.
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Old November 16th, 2006, 07:38 PM   #13
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Thanks for all the advice guys. Pretty sobering comments...I guess this is a realistic/practical group of people.
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