Kristian has been at the forefront of the rapidly transforming game industry since 2001. After serving as Electronic Arts’ executive vice president of digital, he left three months ago to focus on startups. Today, he leads seed-stage investments with Initial Capital and serves on the board of Supercell, the #1 iOS grossing game company in the world. Before that, he co-founded, ran and then sold social gaming pioneer Playfish to Electronic Arts for $400M in 2009. He was also a co-founder of mobile gaming pioneer Macrospace – today Glu Mobile (Nasdaq: GLUU) in 2001 through the successful IPO in 2007.

TechCrunch writer Kim-Mai Cutler and Benchmark Capital general partner Mitch Lasky recently wrote two insightful pieces on venture investment in games (here and here) – both expressing some degree of skepticism of venture capital models for funding game startups. I agree venture funding is not for every game startup, and certainly not every game startup makes for a great venture investment. However, I would argue the case for venture funding for games is today stronger than ever.

Here is why:

Why game startups are better off with venture investment than publisher funding

There are broadly speaking three models available for a game startup today: bootstrapping (including crowd-funding), publisher financing and venture financing. For those who can afford the risk and have cash readily available, bootstrapping always trumps the other two. It comes with maximum freedom, control and upside in a success case.

But the risks are very real and significant. Those unable to bootstrap because of the risks or ambitions of the project should in my view consider venture investment over publisher financing models.

Publishing as an idea for digital pure plays is simply turning out not to work very well. Many have tried it with very little to show for it. This is because the typical publisher value-add of financing, marketing, technology and distribution through retail channels doesn’t translate well to the digital world. It says something that not a single game in today’s iOS top-25 grossing has been “published” by a third party as far as I can tell.

While developers continue to need financing, the rest of the “publishing services” have become obsolete in four key ways:

• Publishers can’t compete with atomized marketing services by specialists: As the digital market has matured, player acquisition, telemetry, cross-promotion and other marketing services have become widely available as independent specialist services that compete on price and quality of the service. Companies like Swrve (one of our portfolio companies at Initial Capital), Chartboost, HasOffers, Nanigans, Flurry and a host of competitors are evolving their services at a blistering speed, requiring only a small set of increasingly available talent at the developer end. Doing it directly is not just cheaper and more flexible as the world changes, it also forces a more profound understanding of player flows and distribution challenges, which ultimately helps uncover product design insights.
• Publisher channel access may accelerate your success, but will not define it: Much has been made out of the advantage that big game publishers have in terms of access to Apple or Google in terms of promotions. Clearly, being featured helps generate initial downloads. However that success is short-lived if you are unable to retain your audience and acquire users independently at a profitable cost of acquisition. Plus, you won’t be re-featured unless you generate the numbers. A game investor worth their salt will be able to make the right introductions here anyway. The incremental publisher value here is small.
• Holding on to rights to extend IP has become critical to value creation: As Lasky emphasizes in his post, gaming even in the games-as-a-service world is inherently hits driven. For a game startup to become valuable over time, it needs to find ways of anchoring its success around building franchises. Ownership of intellectual property (IP) and all extension rights becomes important. Angry Birds-maker Rovio and Moshi Monsters-maker Mind Candy have shown that game originated IP is an increasingly viable base to build out a broader IP following with over 40 percent or revenue from each being attributed to non-game products. At the same time, the halo marketing effect from these non-gaming products can still contribute value to the core gaming product. Publishing deals are typically structured for the publisher to get hold of this.
• Long term margins help you hold onto key talent: Perhaps most importantly, success in games has always been about key creative talent. The more cash a game startup is able to create, the more it can afford to invest in everything from the office to culture to individual, innovative compensation models for rockstar talent. Signing away a revenue share limits these options and ultimately is likely to encourage the best talent to leave.

Venture financing from a specialist fund that understands games should therefore be seen as a compelling alternative for game startups. It provides the financing value add, typically at far more flexible terms, without any of the restrictions to value creation that lower margins or complicated IP terms can create. And you could even get good folks around the table for advice how best to build for long term success and shareholder value. It should be no surprise that today’s most promising game companies including Supercell, King, Kabam, Rovio and Kixeye are all venture-funded.

What about the case for investors – does it still make sense to invest in games?

The digital pure play market growth has recently been characterized by the rapid rise and occasionally fall of new entrants. Zynga is cited as the key example by both Cutler and Lasky. A thoughtful article by Tadgh Kelly about “Peak Mobile” further highlights the cycles any individual platform tends to go through. In a world of few game acquirers and a troubled IPO market, does the venture model therefore need a re-think?

In my view and that of Initial Capital, which is an investor in Supercell, Brainbow, Supersolid, Space Ape Games and others, the case for continued investment is strong.

Even though some VCs are shying away from games, here are five reasons why I and Initial Capital are doubling down on games:

• A continued virtually unopposed growth opportunity in digital: The next generation consoles are doing a wonderful job at distracting the big publishers away from the fastest growing parts of the game industry. That clears the water for pure digital plays to gradually build up dominance with new IP on new hardware platforms. Activision Blizzard CEO Bobby Kotick’s recent dismissive remarks about mobile, and EA’s strategy of ANDs: consoles and PC and mobile and online (which dilutes their excellent talent across too many opportunities) are cases in point. The innovators’ dilemma confronting the big guys is creating continuing unopposed growth opportunity for new and established digital pure plays alike. That is giving new players time to build up the brand and marketing advantages that big publishers have held for years on what are rapidly becoming legacy platforms.
• There are plenty of “blue water” opportunities on new platforms: Very few game play styles or categories on personal screens, like four- to seven-inch screens across mobile phones and tablets, feel mature at this point. Clash of Clans’ take on the tower defense genre, Candy Crush Saga’s interpretation of Match Three games and Hay Day’s way of approaching farm games are possibly the most mature examples out there. But who is making the category-defining racing game, the best first person shooter, sports game, real-time strategy, monster breeding or puzzle adventure game on these platforms? The console guys are hamstrung by their lack of focus.The starlets who already dominate one or two categories will have similar focus challenges due to successes to date. Seldom have there been such clearly profitable, well-defined opportunities for new startups to re-imagine these experiences for personal touch screens.
• The opportunity has gone global: The traditional gaming “Galapagos Islands” of Japan, Korea and China have been overrun by the great global equalizers of Android and iOS. This creates unprecedented opportunities to go global. Supercell’s Clash of Clans is currently the #1 game on iPad in China and #11 in Japan. For Candy Crush, the same positions are #64 in China and #4 in Japan. This is not to belittle the differences in local tastes, marketing channels and in some cases app stores or distribution mechanisms. But the opportunity to reach the other half of the game industry that these countries represent has never been more tangible.
• Unprecedented margins: Because of the margin structure and low headcount requirements of the industry, companies can become very profitable very quickly. Recent lessons from other companies that have grown too quickly are causing newer companies like Supercell to be more thoughtful. They are banking their profits, stabilizing their mid-double-digit operating margins and re-investing carefully into nurturing and expanding their talent base. This is also great news for top talent as it gets to increasingly share in the financial success both through company perks, private and public share sales and also dividends.
• The M&A and IPO markets will be back. And there’s nothing wrong with dividends either: It will just take time. Large M&A deals in games are unlikely to be on the horizon. The traditional console folks are too busy fighting each other and do not have the resources to acquire an increasingly confident set of digital pure plays. The leading pure plays on the other hand are mostly focused on ensuring their own model scales before embarking on aggressive M&A. M&A is particularly hard an industry in the middle of a disruption where talent and inspiration are more important than scale. While Zynga’s troubles may have damaged the IPO prospects for the next 18 months or so, if the new generation of companies can show sustained profitability, they will be in an incredibly strong position to consider listing later. Some will undoubtedly choose to stay private and pay out dividends in the medium-run, which is fine from a venture investors perspective. But the option will be there.

The next few years for games will be choppy. But the fundamentals for gaming investments are stronger than ever. As Lasky says, you have to be building a game company and not just a game for venture funding to make sense. And for a venture fund to consider gaming investments, you need to understand the sector.

But neither of those mean that venture investments in games aren’t alive an well. In fact, the team at Initial Capital remain as bullish on the sector as we led the seed round into Supercell. We continue to seek out the very best, most inspired design and coding teams who want to define where games will go next and help them get started with capital, advice and structure.

Article courtesy of TechCrunch

Editor’s note: Tadhg Kelly is a veteran game designer, writer of leading game design blog What Games Are and creative director of Jawfish Games. You can follow him on Twitter here.

Between all the press conferences at E3 and the follow-up interviews, there’s been a lot of gaming news to chew on this week. Announcements of consoles and games all came at a terrific pace, along with a lot of he-said/she-said.

There was an amusing gaffe made by one platform chief, essentially saying “let them eat cake” to those who didn’t jive with his next-gen vision. There was a very off-color joke in a press conference. There was a dreadful reaction on Twitter to a question posed by Anita Sarkeesian about a lack of female protagonists in upcoming titles. And a stunt gone slightly wrong when one microconsole maker tried to set up an un-conference in the parking lot outside the main event.

For me, however, the signature moment was a cheer that happened during the Sony press conference. Sony, once kings turned to laughing stocks. Sony, the penitent platform holder who spent half a decade mending fences and yet still got very little respect. Now Sony, champion of used games, lending games and region-free games. Sony, hero of indies and diversity. Sony, the console maker who didn’t make too big of a deal around extra features. Sony, a full $100 cheaper than its rival.

And the crowd roared.

Change Nothing!

While the cheer was certainly a delicious moment, its broader context is significant. It wasn’t an Apple-esque cheer for some new invention, device or bold new product line. It was a cheer for the status quo, for a lack of innovation or disruption. Gamers whooped and hollered because Sony said that it was going to try to keep their world exactly as they already know it, discs and all.

Gamers are an expectant group on the whole. They are highly tribal in their loyalties, and consistently respond to both visual aplomb and brands. They buy into franchises rather than single titles, which means once their loyalty is earned it usually stays earned for long periods of time. With the right trailers and tone, the publisher that seizes the moment can ride it all the way to 100m unit sales over a decade if it gets it right.

Many gamers don’t like some kinds of change. The console war saga is one that they’ve known for a long time, and they are comfortable with. It feels as though the back-and-forth of gaming generations is eternal, and how things should be. It seems evolutionary, right, and disruptions that threaten its core dynamic are viewed very dimly. It’s always been consoles and the PC, that’s where “real games” are.

“Real gamers” don’t like iPads. “Real gamers” don’t like Facebook. “Real gamers” consider figures like Sarkeesian as pushing agendas that will ruin games. “Real gamers” consider games as more than a medium: they are a culture. And that would mostly be fine (not the sexism part) if it weren’t for two issues: (1) The escalating cost of making games driven by gamer expectations, and (2) the size of the gamer population.

The Same Old Problem

There are simply not enough “real gamers” to make the console market function well, and there haven’t been for a long time,  but “real gamers” don’t really get that. They think that “real games” are bigger than movies, and always growing, but the reality is that the market for console games has only grown incrementally over the last decade. All the explosive growth and the most interesting stories have come from “not-real” markets like mobile, social and casual games. For a long time now it’s been smartphones and Wiis that really pushed the medium forward. Core consoles, on the other hand, seem stuck.

While the Wii managed to sell to lots of people outside the gamer fold, the core consoles managed about 75 million to 80 million sales each over a seven-year period. Accounting for dual ownership (people who bought both systems) and replacements, the overall core market’s size is probably about 140 million gamers, much the same as it was in the PlayStation 2 era. Of those, maybe half are active enough to buy three to five games per year, and of that half, maybe a third are active enough to buy one or more games per month.

That means the real market for console games is maybe 70 million (split across two systems). Remembering what I said about gamers buying into franchises, less active gamers tend to make a lot of repeat purchases. They buy into the super-AAA games over multiple years (Grand Theft Auto, Call of Duty, FIFA, Madden, Mario, Zelda, The Sims, Diablo, Pokemon, The Elder Scrolls, Final Fantasy, The Need for Speed, Halo, etc.) and not touch newer would-be franchises unless more active gamers keep telling them to. This means the market for mere AAA games is smaller, closer to 20 million to 25 million players. And below AAA used to what we’d call mid-tier games, but they’re mostly dead now. Why?

Mid-tier games just stopped making sense. At a $1 million typical cost level of original PlayStation games, publishers could field lots of games and rely on a few hits paying for all the others. This meant that many games were mid-tier, a few became AAA and the idea of a super-AAA category didn’t really exist. However with the sixth generation (PlayStation 2, the original Xbox) development costs multiplied by a factor of four, and with the seventh generation (PlayStation 3, Xbox 360) they did so again. Publishers could no longer afford to play the field and had to be very choosy in what they funded, and yet many of their games didn’t pan out. The market did not grow along with the costs, and so the mid-tier game died. So did many publishers.

With the next generation, the same is already starting to happen for AAA games, only the stakes look even higher. Costs will rise once more, but the market is still much the same as it was. We live in an age when a console game can sell 3.4 million copies and still fail to make a financial impact for its publisher. That’s a team of 700-1,000 developers slaving away on a 15 hour experience that people pay $50 to own. And still, at best, it’s breaking even. As costs continue to rise does that mean that the sales target for all big-budget console games become 5 or 6 million copies? Yep.

Enjoy The Exuberance

Sony may feel reborn, and along with its rebirth comes a sense of rejuvenation in the games industry. It may seem as though the forces threatening “real games” have been pushed back, and that these are happy times. Publishers will commission new games, developers smart enough to have gotten an early start gain enormous buzz from the press and inflated sales, and everybody hopes to build a marketing story.

Yet this exuberance is irrational, a temporary respite from the longer problems that the console industry faces. For all the excitement surrounding the eighth generation, not enough has changed about how it operates, and its core market’s unwillingness to be disrupted means that it continues to battle its own stasis. It means that successful publishers are likely to see a big shakeout in the next couple of years. Companies like Ubisoft, Take Two and even mighty Electronic Arts are going to feel extreme pressure to succeed at every instance of going to market. Soon the only viable market for console games will only be super-AAA, and they know it.

E3 may have proved a very exciting week, but the quiet news about iPhones getting game controllers is probably more significant. While the “real gamer” can comfort himself in feeling that games have not been ruined by outside forces, and that because games are bigger than movies that means everything will be fine, the reality is that change is coming to games whether he likes it or not. The only question that remains for the companies involved is which side of that change they want to be on.

Article courtesy of TechCrunch

VigLink is announcing an update to its VigLink Convert product that should help affiliate links stay up-to-date.

The company promises to make publishers more money through affiliate links, i.e., links to online merchants that can earn a commission if they lead to a purchase. With Convert, VigLink turns standard, existing links into affiliate links. (And it works with 30,000 online retailers.)

However, CEO Oliver Roup said that over time, the links can become outdated, in the sense that they’re no longer pointing to the merchant who will earn them the most money. So VigLink’s new optimizer will dynamically change the link. At any given point in time, the links should automatically connect to the affiliate program that will make the most money for the publisher without requiring any extra work.

Roup argued that this should “bring liquidity to a very illiquid market,” because it creates more pressure for merchants to offer commercially appealing terms to publishers. Over time, he said the larger vision is to optimize affiliate links the same way that display ads are optimized: “Where you see links pointing are a function of who you are and the state of the world.”

VigLink says it has been testing the feature with a few customers already, including Huddler, and other customers can join the beta starting today. I’ll be moderating a panel with Roup and Huddler’s Dan Gill later today at ForumCon, where we’ll be talking more about the product.

Article courtesy of TechCrunch

Now that China has surpassed the U.S. as the world’s largest smartphone market, it’s no surprise that many developers are intrigued by the prospect of a country that may have 500 million devices in circulation by the end of next year.

Because of that, plenty of companies like Yodo1, iDreamSky and Punchbox have cropped up to help advise studios on how to navigate the unique complexities of the market. In China, you need to distribute through dozens of app stores and market through different social networks.

Kii Corp, which was created out of a merger three years ago between Servo Software and Synclore Corporation, is also getting into the game with its own publishing service.

With that, they’ll help with all of the standard things like integrating with China’s different in-app payment systems and mobile ad networks.

They’ll also integrate with China’s unique social networks like Sina Weibo and WeChat, because most players don’t access Facebook and Twitter because of the Great Firewall.

They’ll help with distribution to China’s many different Android app stores. There are about four to five leading ones, but beyond that there is a long tail of dozens of other ones.

“Google Play isn’t formally available in the Chinese market so a lot of developers can’t find out how to go there,” said Masanari Arai, who is Kii’s founder and CEO.

Then there are a few more pieces with handling quality assurance, translation and hosting apps through a mobile-backend-as-a-service product called Kii Cloud, which handles in-app analytics, cloud storage, user and data management. It’s a service that resembles Parse, which Facebook bought for at least $85 million excluding retention earlier this year.

Kii competes with many, many other players like iDreamSky, which publishes Halfbrick’s Fruit Ninja and Imangi’s Temple Run in China. Yodo1 is also another emerging player, but they do a lot of hands-on work beyond translation to localize a game, such as changing the graphics and music to make them more appealing to Chinese tastes. Another publisher, Punchbox, which also goes by the name CocoaChina, says that its first-party games are starting to see about $6 million a month, most of which is in China.

The company has a lower revenue share than its competitors, taking a 15 percent cut instead of the typical 50 percent share that we see.

Kii, which is Tokyo-based, has offices in Silicon Valley, Shenzhen and Hong Kong, as well.

Article courtesy of TechCrunch

Buddy.com today announced a mobile analytics service that’s supposed to give publishers and brands a better sense of who’s actually using their apps and how they’re using them.

There’s plenty of competition on this front — Andreessen Horowitz-backed Mixpanel, for example, has increasingly become a mobile analytics company, and it makes a big deal out of not focusing on “bullshit metrics” like downloads. Buddy CEO and co-founder David McLauchlan was similarly dismissive of using downloads as a meaningful way to measure app engagement.

“That’s analogous to figuring out TV ratings by looking at how many TVs they sell in Best Buy,” he said.

McLauchlan argued that Buddy is in a unique position because it sits in the intersection between companies that offer backend tools for building apps and those that offer mobile analytics. Most analytics companies have to “hook” into an already-built app, and then they count whenever the app performs a certain function, which he said is a very limited approach. Buddy, on the other hand, is capable of “prewiring” the app so it provides a fuller picture of user behavior and track the information that’s important to the publisher.

So what can Buddy actually measure? Well, you can get a sense of it in the main analytics dashboard shown above. McLauchlan said it covers things like user demographics and location, as well as data on in-app commerce and conversions. It can also connect those data points in interesting ways, for example showing average time in the app based on age.

McLauchlan argued that this is particularly important for the brands and agencies that have used Buddy to build their apps — he called this a step towards creating an industry-wide “good set of metrics or standardized analytics that you can use to buy and sell” advertising and marketing.

Buddy says that there are 16,500 applications on its platform, and it’s customers include Nokia, A&E Television Networks, and Microsoft (which also invested via its Bing Fund).

Article courtesy of TechCrunch

Chicago-based social gifting service Boomerang, which has been inching away from its consumer-facing product over the course of 2013, is now expanding its B2B platform with today’s launch of Boomerang Rewards. An extension of its previously launched gifts platform for business, the new Rewards service now brings similar gift-card sharing options to publishers, including those on web and mobile.

Boomerang arose from the ashes of Gtrot, a social travel planner later turned local discovery service, and then a consumer-friendly gifting service similar to competitor Wrapp. But while the Boomerang counterpart to Wrapp still lives on iOS, the focus for the business as whole is no longer primarily on being a consumer service.

Instead, explains CEO Zachary Smith, the consumer app is now “just another channel for distributing gift cards. Although, he adds, it helps to show Boomerang’s capabilities to the company’s B2B partners.

But the real movement now is in working with businesses, including as of today, publishers. With the recently launched business platform, brands have been able to send out gifts directly to their established customer bases via email, social media, or both. At launch, the company was working with around twenty businesses, including Ghirardelli, BeautyBridge, Diamond Candles, Vlado, City Winery, Urban Adventures, and others. Today, it’s grown to 60 businesses, adding Seamless, ModCloth, Shutterfly, ProFlowers, One Kings Lane, thredUP, MeUndies, and many more who are participating directly.

Now with Boomerang Rewards, the company wants to put the distribution of those same gift cards not only in the hands of the brands and businesses themselves, but also with publishers.

“We said, ‘if advertisers can use this, why can’t publishers use this as a way to better engage and monetize their audience?’ Instead of Ghirardelli Chocolates sending out a Ghirardelli gift card to their existing customers, why not go to ChocolateBlog.com and Foodie.com and get them to send out the gift cards to their customers?,” explains Smith. (Side note: sadly, ChocolateBlog.com is not a real thing.) 

Publishers who promote Boomerang Rewards – whether it’s in a blog post, a sidebar, or as a tool to get users to compete online surveys, perhaps – get a portion of the revenue share of the purchases made by converting customers. Smith says Boomerang passes back on average 4%-5% of the net sale.

While Boomerang’s business platform has been shown to boost campaign revenue by 80 percent on average, compared with an brand’s previous promotions, the company claims, not as much data was available regarding the new white-labeled Rewards option. Smith cited one case study involving Jebbit.com. where 10.5 percent of the publisher’s user base made a purchase on ModCloth. “On a CPM basis, they made 8 to 10 times the normal CPM,” he says. “That was really powerful.”

The site is now doing a full Rewards integration along with launch partners, Jebbit, Lab42, Squarz, and RIVS.

“Anyone who wants to monetize a user base can find an excuse to give away gift cards as a reward,” says Smith of the product. “It doesn’t feel like an ad – it’s not replacing any of your existing ad space – we’re simply providing you new tools to generate incremental ad revenue.”

Going forward, the focus will be on expanding distribution and improving the APIs for better use on mobile. Currently, the platform is mobile-friendly, but the APIs aren’t quite there yet. But the plan is to make it possible for mobile publishers to distribute gift cards via apps – for example, as rewards in a game for beating a level. That would put Boomerang up against others doing similar things, including Kiip and more recently, Gyft.

More details on Boomerang Rewards are here.

Article courtesy of TechCrunch

Online commerce still isn’t as easy as it should be. That’s because many times, consumers find something they want while browsing a publisher site online, but then have to search for and buy it elsewhere. Well, that’s a process that Los Angeles-based startup Mulu wants to change, with an ad plugin that allows users to buy the products they’re reading about directly on the page.

Mulu enables that kind of shopping experience with a plugin for publishers that works by scanning the content of the page and providing links to related products which can be purchased directly. Clicking on a product that’s displayed within the ad unit will take users directly to the product page on any of a number of third-party sites that Mulu has integrated with.

But beyond just providing a better shopping experience for users, the plugin makes life easier for publishers. While linking to products related to the content on a page is nothing new, the “Shop This Page” feature drastically simplifies the process of enabling commerce on publisher sites.

Previously, publishers would have to keep track of multiple affiliate codes and often create links manually to products that they refer to. Not only does the plugin enable one-click commerce on the site, but it enables publishers to benefit even if they haven’t struck up a direct relationship with an advertiser.

“Online content pages are becoming the new retail store,” Mulu CEO Amaryllis Fox told me. She envisions a world where users no longer have to go through the two-step process of finding an object they want to buy in an article online, and then having to search for it through an e-commerce site or *gasp* by shopping in a brick-and-mortar store.

As for advertisers, the “Shop This Page” feature is driving more clickthroughs — and that, in turn, is driving more sales. Since the products that are shown on any given page are relevant to what end users are reading about, they’re much more likely to buy something.

The plugin works with pretty much any type of content, and on any platform. The “Shop This Page” plugin — which is really just a few lines of code — is optimized to be viewed on various different displays, whether on a traditional desktop web browser, or on a mobile- or tablet-optimized website.

With that sales pitch, Mulu’s gotten a good number of lifestyle and fashion brands on board. Clients include Hearst, Conde Nast, and Food Network, with the plugin being featured on publications such as Cosmopolitan, Vanity Fair, Good Housekeeping, Redbook, Country Living, and others.

And it seems to be working pretty well. A representative from Hearst says that in the publisher’s initial implementation on Seventeen’s site, Hearst Digital Media was seeing click-through rates close to 13 percent. While that is at the high end of the spectrum — Mulu claims click-through rates between 2 percent and 13 percent with its publishing partners — it’s an immense upgrade over the sub-1 percent click-through rate of most standard ad units.

One reason for that might be the social good component of Mulu’s business model. While commerce is at the forefront of its offering, the company also ensures that all publishers give a percentage of the cost-per-click payment to a charity of their choice. Those charities are displayed along with the products, giving consumers an easy way to give back.

Now that it’s gotten a good number of customers on board, it’s looking to accelerate its growth with more tech and sales people and a bit more funding. The Los Angeles-based company currently has 14 employees and is in the midst of raising a Series A round of financing.

Article courtesy of TechCrunch

Last year, author Tim Ferriss turned to BitTorrent to market his newest book, the Four-Hour Chef, when the biggest bookseller in the U.S., Barnes & Noble, refused to stock the Amazon-published title. Ferriss’ campaign proved a success, with the book selling 250,000 copies on the back of some 2 million promotional content bundles — chapters of the book and supplementary materials — downloaded on BitTorrent. Now BitTorrent is banking on that success to try to get more authors on to its site.

Playing on its former reputation as a place to pick up illegally distributed content, BitTorrent today published an informal how-to guide for authors, encouraging them to “hack publishing” and market their books like startups, complete with “iterative release schedule and spreadable, targeted content.”

While BitTorrent does not intend to be a publisher or distributor of books itself, it sees a role in helping authors break down their work to promote their main product in a different way. It suggests that chapters should be thought of as tracks from an album.

“This book-as-album strategy gives authors like Ferriss a significant advantage. Releasing chapters as singles creates a continuous news cycle during pre-launch promotion. It effectively creates radio play; increasing the chances that you’ll get heard with sample content. At the same time, it provides the flexibility to micro-target: using different chapters to reach and activate different readers.”

It’s also a sign of how authors are increasingly taking a bigger role in general in promoting their work in a digital content world.

BitTorrent’s focus on authors is part of a multi-year mission at the company become a go-to place for legit content creators to host and distribute legit work. A good amount of effort has been put into areas like video and music. A deal with DJ Shadow last year pioneered a revenue-sharing model, in which free DJ Shadow music content came bundled with other products inserted by paying marketers, part of a content package the company offers called the BitTorrent Bundle. Along with that, it has launched a file-storage and sending service called SoShare, geared at extra-large, media-rich files, to help those in the creative community better collaborate.

And books have also played a role. Matt Mason, BitTorrent’s VP of marketing, notes that a partnership with the Internet Archive, has “over 1 million legal and licensed books available.”

Most people out there don’t have the profile of Tim Ferriss, who had already made a name for himself with two previous books, Four-Hour Workweek and Four-Hour Body, before moving on to the Four-Hour Chef. BitTorrent notes that Ferriss released the first chapter of his book, along with 680MB of behind-the-scenes content on BitTorrent, using six promotions over 60 days (yes this sounds a little like a fad diet). This content, BitTorrent says, was downloaded over 2 million times. As a result of that, 293,936 clicked on to the book’s trailer YouTube; 327,555 clicked on to the author’s website — making BitTorrent its biggest traffic generator; and 880,009 clicked on to the book’s Amazon page: 880,009, resulting in 250,000 copies of the book itself getting sold.

You can argue that his success on BitTorrent was more due to Ferriss’ earlier fame than the BitTorrent distribution model. But for those willing to rethink how to market their books, it could be an easy enough investment to make anyway: Matt Mason, VP of marketing for BitTorrent, points out to TechCrunch that all of the Bundles that BitTorrent has piloted to take have been a “zero cost” to the content creators.

Indeed, it seems that, for now, the main purpose of growing the population of content creators on the site is to grow BitTorrent’s scale and profile more than direct revenue sources. BitTorrent itself is not necessarily interested in taking on a bigger content producing role for itself in the process. ”BitTorrent is not the publisher or distributor,” says Mason. “[But] the publishing industry has changed. Launching a book today is much like being your own startup. BitTorrent’s role, specifically the role of the BitTorrent Bundle, is to offer a new tool for content creators to engage with a mass audience. The BitTorrent Bundle hands the power of a torrent over to the content creators.”

Article courtesy of TechCrunch

Content discovery startup Trapit is launching a new Publisher Suite today, with tools for publishers to build their own branded, customized versions of the Trapit experience.

Spun out from research institute SRI International, Trapit uses the same artificial intelligence technology as Siri and allows uses to create “traps” that find content that’s relevant to a given topic. Last fall, the company said it was looking to power other content recommendation apps beyond Trapit itself, and it announced Asian TV conglomerate Astro as its first partner (as well as a strategic investor).

With the Publisher Suite, Trapit is making its technology available to a broad swath of partners. A company can build an app that they can easily update with their own content, and then supplement that content with related articles that Trapit has pulled from other sources.

Trapit co-founder and Chief Product Officer Hank Nothhaft contrasted this approach with Flipboard, which allows publishers to build a presence within the Flipboard app itself. By automatically aggregating content from more than 100,000 sources, Trapit can ensure that the app is more than just “a retrospective” of what has already published, he said. Nothhaft also argued that if you’re not a big-name publisher, it can be hard to get discovered in an app like Flipboard, so it’s important to build your own app. And Trapit allows publishers to run their own advertising without taking a cut for itself (instead it charges a fee for the tools).

“[In an app like Flipboard] there’s a mountain of different titles, all contained within their own feed,” Nothhaft said. “It’s not an optimal experience. After talking to all these publishers, we’re hearing that the revenue is not generous and it’s not compelling in any way. But for as low as $1,000 a month, you can get a really professionally designed, sophisticated application.”

Here Media, the publisher of a number of titles for gay audiences, already used the Publisher Suite to create an Advocate Discovery app (pictured above). As the name implies, the app is tied to the magazine The Advocate, but it includes content from all of their properties, and using Trapit technology, it can include the most up-to-date news on breaking stories like the U.S. Supreme Court case on gay marriage.

Article courtesy of TechCrunch

Video ad distribution company Jun Group has launched a new, wholly-owned subsidiary called HyprMX, offering mediation tools for mobile publishers and developers manage video ads from multiple sources.

HyprMX CEO Corey Weiner said that Jun Group runs its ads through hundreds of publishers, and it found that some of those publishers needed more help managing their inventory: “They’re just not in the ad business — they’re in the content business, they’re in the games business.” So HyprMX helps those publishers run ads from multiple sources, including Jun Group.

There are a number of mediation options when it comes to standard display advertising, but Weiner said it’s an unmet need in video. The other challenge on mobile is delivering video ads in a way that doesn’t annoy users. For example, preroll ads are even more annoying on mobile, because you can’t just ignore them — they take over your phone for the duration of the ad. That’s why HyprMX focuses on incentivized ads, namely videos that users are rewarded for watching.

Of course, there’s a potential conflict of interest there. In some situations, HyprMX will be determining whether to run an ad from Jun Group or from one of its competitors. But Weiner said, “We’ve formed a Chinese Wall between the two companies.” The only thing the HyprMX platform cares about is maximizing the amount of money that the publisher makes on each ad view, and if an ad from another source will be more lucrative than an ad from Jun Group, HyprMX will choose the competitor.

At the same time, Weiner said the new company has an advantage in signing up publishers, since they’ve usually heard of or have a relationship with Jun Group already.

Article courtesy of TechCrunch