MappingTheWeb //

Today, NetFlix announced the launch of a new service that will limit its dependence on physical mail. The company plans to partner with numerous electronic manufacturers in a new initiative that will send movies from the Internet to your TV. An initial partnership with LG will get the ball rolling later this year. The service will be offered in HD and may include a limitation on the number of movies viewed per month.

Currently, NetFlix offers over 6,000 movies and television shows online for free, but this new service will extend beyond the PC to the TV. The company does acknowledge a threat from the video-on-demand space, but believes that such a system is incapable of reaching its full potential without the power of the web.

The company has ambitions to become the preeminent movie channel on all Internet-connected devices, including gaming systems, wireless devices, DVD players, and set top boxes.

I can understand the benefits of such a system for both the consumer and the company. It saves time, hassle, and money. I’m just not convinced that consumers will be rushing out to buy a NetFlix-enabled device. Having said that, I do think this a step in the right direction. However, the company will need to partner with as many electronic manufacturers as possible to really make this work. Furthermore, NetFlix will need to establish itself as the name in the space, as everyone from Apple to Amazon is jockeying for position.

As a side note, this looks like yet another hit to Blockbuster. The old-school video rental company has taken a butt-kicking over the past few years. The introduction of ‘no late fees’ did provide a bit of light, but only for the short term. It may only be a matter of time before…

What do you think of this move? Is it worthwhile or worthless?

In early January 2007, I made 5 blogging predictions for this year. They dealt with a variety of issues and topics from around the blogosphere. Let’s take a look at how I fared. But first, let’s review my predictions:

1. Perception shift
2. Bridging the gap
3. Deeper niches
4. More full-timers
5. Increase in blogging tools

(For an in-depth look at each prediction, visit my initial post: Blogging Predictions for 2007.)

So here we go…

Perception shift - Hit - Regular people are starting to associate the concept of a “blog” with something other than a personal journal, i.e. news, analysis, gossip, etc… This shift will not only help in the proliferation of blogging, but also in the understanding the current environment.

Bridging the gap - Miss - I totally missed on this one. In fact, I believe that the gap between the A-listers and ‘the rest’ is increasing in size. After all, there can only be a select few that reign supreme.

Deeper niches - Hit - This one goes without saying. As the number of blogs increases, it is inherent that deeper niches will emerge. Expect this to continue.

More full-timers - Hit - As the mainstream begins to embrace blogs as another media source, career opportunities become real. An expert voice, a loyal following, a lucrative niche, and some targeted ads are a formula for success.

Increase in blogging tools - Hit - We are definitely seeing an increase in the number of blogging tools being created. Companies are providing a whole spectrum of solutions that deal with everything from feeds, to statistics, to search, and much more.

Wow… 4/5 ain’t bad, albeit my predictions were a bit safe. None were overly risky or outrageous. As for 2008, I’m not going to make a list of predictions. However, I can say one thing for sure. More and more companies will be embracing and implementing blogs as a way to reach out to customers and create stronger relationships…

Note: In light, of my last statement, I am going to insert a shameless plug. As of now, I am going to be focusing my consulting efforts specifically on blog consulting under the name Tagzoom. Services range from blog set-up, to blog design, to blog strategy consulting, and more. So, if you’re looking to set-up a blog or are in need of blog strategy consulting, be sure to let me know. Also, please pass this along to anyone else who may need a hand. For more info, visit the Tagzoom site. Thanks for your support.

In light of all the recent prediction posts for 2008, I present to you my list:

1. Google misses an earnings estimate; the stock drops a couple hundred bucks a share in one day.

2. An increasing number of mainstream musicians drop their record labels and sell directly online.

3. The term “web 2.0″ is outlawed.

4. The “semantic web” and start-ups in the space continue to stumble.

5. Twitter is acquired.

6. Facebook continues to set the bar and dominate the social networking space.

7. Technorati continues to suck.

8. Open ID takes off; more sites embrace the standard.

9. Google launches a job site (or acquires one… SimplyHired? Indeed?).

10. Wikipedia gains widespread credibility and acceptance.

Bonus: 37signals is acquired (long shot).

What do you think will happen in 2008? Am I on target or way off?

Choosing a target market for your product or service may not always be as simple as it seems. For example, creating a photo-sharing site for “anyone who takes photos” is a risky proposition. Difficulty targeting and high competition are two main downfalls of this approach. Having said that, the upside is a larger potential target group. Nevertheless, I’d recommend the former option as the chances for success are much more realistic. 

Trying to conquer a big market equates to a high risk-to-reward situation. Conversely, choosing a smaller subset usually leads to a lower risk-to-reward opportunity. A common misconception with the latter approach is that you may severely affecting your chances for success. In most cases however, such a tactic is not as risky as you may think (especially on the Internet). Niches are often still large groups.

Two advantages to niches include:

1. Better opportunity for revenues
2. Ability to create a stronger community

A quick example can be seen in the video-sharing space. A few start-ups (including ExpertVillage, Video Jug, Sclipo, and SuTree) chose NOT to compete against YouTube. A smart choice indeed. Instead, these video sites showcase “how-to” videos, a potentially lucrative niche. Obviously, users can upload and view “how-to” video on YouTube as well, but it is not their main focus. Staying small creates potential barriers, which can be good and bad. Also, as we can see from that small list, even niches are susceptible to competition.

Competing against the “big guy” in a given space is a long shot. The potential rewards may be handsome, but the likelihood of failure is also high. Place your bets and weigh your options carefully. Keep in mind that different industries may present different opportunities.

For more information on this topic, please read previous MappingTheWeb posts: Dethroning the Internet Giants and The Proliferation of Verticals.

Social news site Digg is up for sale. VentureBeat first reported the story, claiming a reliable source confirmed the company’s plans. The source goes on to say that Digg has hired Allen & Company, a private investment firm, to help broker a potential deal. The asking price is said to be in the range of $300 million.

The story really comes as no surprise to the blogosphere. Speculation about an acquisition has been swirling for months. The difference this time is that Digg is actively seeking an acquisitor, rather than fielding potential offers. This new tactic seems a bit desperate to me.

What is the company’s motivation to sell? Is traffic slowing down? Is Digg worried about the threat of new entrants and/or current competitors? Are revenues bleak at best? My guess is that Adelson and Rose figure the company is at its peak, both in terms of popularity and dominance. If that is the case, then Digg, in theory, should be able to negotiate the highest possible valuation. Having said that though, shopping around seems to put the acquisitor in a position of bargaining power.

I love Digg and I hope it sticks around for a long time. I also think it’s a great consumer-oriented, media play for any large company looking to make a mark in the space. What is currently happening behind the scenes is beyond me. But as I say, I think Adelson and Rose may be looking for a change. The world of venture capital may be awaiting. What about new start-ups? Oh yeah… then there’s Pownce…