SxSWi 2010 Wrap

It was an incredible show this past week in Austin at South-by-Southwest (SxSW). 

In addition to the Interactive Festival, which is rich in its diversity of people, companies, and technologies, there is the added dimension of cross-cultural networking with the Film and Music festival artists and attendees.  The members of the music act Gwar checking in at the registration booth for the festival, are just one proof point of the diversity. 

But, my focus was on Interactive, and to that end, I enjoyed the sessions and tradeshow immensely.  In fact, in case you missed it, my Friday twitter stream from last week highlighted some of the websites and companies that caught my attention from the tradeshow floor.  But, to wrap-up impressions from SxSWi 2010, here are some final thoughts from some of the more noteworthy sessions that I attended:

Embracing Virtual Worldskey takeaway: virtual worlds are definitely on a roll and IMVU remains a bellwether to watch. IMVU has been profitable since July 2009 and is at an approximate $3 million monthly revenue run-rate, finishing out at about $30 million in revenues for 2009.

Just to give you a sense of scale, besides advertising and sponsor income, much of revenue comes from member purchases, using IMVU’x currency, for which 1000 credits is roughly $1 USD. Members can purchase from a catalog of over 3 million unique items and hundreds of thousands of music tracks (with over 12 million hours of music listened to in group experiences so far).

Their demographic is approximately 70% female, 60% at age 18 or older, with 60% in the USA. They have a formidable fan base, with over 750,000 Facebook fans (versus approximately 40,000 in the current American Idol Facebook fan base, they cite by comparison). The success of their model has helped them attract high profile music and other creative interest, with a major partnership they announced at SxSWi with Pink Floyd to license their content through IMVU.

I first wrote about IMVU and other companies in the virtual worlds 2.0 phenomenon last year in my post “Talk to the (Digital) Hand.” 

Running a Digital Serieskey takeaway: SAG (screen actors guild) contracts are crucial, with many producers operating under the “industrial” classification. That said, everything is negotiable and it sounds like agencies and talent are both getting smarter with each new production.

The key culture change item for talent is to get them to understand that digital (or web) series are different than commercials or other product endorsement activities. So, they should not expect historical product endorsement contracts or royalties. Instead, it’s wages for the work and, potentially, residuals in other forms of content use.

Brave New World of Book Publishingkey takeaway: the ideal book customer remains a woman, about 35 years old, married with kids, up early in the morning at 5am, not getting to bed until 9pm, lots of activity and responsibility through the day, family and/or work. Ergo, anything that can make reading easier for her during those quiet, free moments during the day, is seen as goodness for the publishing industry. That’s what’s driving ebooks, the introduction of video content into books (so-called “vooks”), and other innovations in publishing.

Merchandise panelkey takeaway: if you use a print on-demand provider, make sure to (a) get access to the customer lists that buy your merchandise through their sites (providers like Cafepress, Zazzle, Spreadshirt, and Printfection) and (b) take advantage of any customer service capabilities (the more full-service, the better) they have to offer, because that can be a huge, costly time-suck.

In addition to these summary notes, I had some fun doing doing 17-word reviews (an adaptation of the 5-7-5 haiku form) after the Interactive sessions I attended.  If you found them a little hard to follow, I offer in apology this haiku from my son Ben, a mechnical engineering sophomore from Case Western (he allows it’s not an original):

                Haikus are easy
But sometimes they don’t make sense
                Refrigerator

In summary, having attended or spoken at the Interactive festival for many years, I’d say this was a triumphant year for the event. Great speakers, fantastic audience, and off-the-charts networking and relationship building opportunities parties and other gatherings made Interactive a smashing success this year. Mark it on your calendar for 2011 – you won’t want to miss it!

Talk to the (Digital) Hand

Take a look through the screen shots below. 

I’ll bet that is a set of companies you’ve never heard of, including:

But, between them, these companies took down $43,500,000 in the first quarter of this year, along a pretty even distribution (the largest was Offerpal, at $15 million).

What do they do? They are among a rapidly growing band of virtual goods companies that are getting some big bets placed on them, in an expectation that they are onto something. CNET blogger Dave Rosenberg provided a nice shout outto these and a handful of others in the sector that is worth a quick read.

Second Lifeis rightly regarded as having pioneered the modern era of virtual goods for grownups at a serious enough level to have attracted substantial corporate interest and experimentation. Close behind, The Simshas added the social,Seinfeld-ian spin to the virtual experience. And while there are clearly many satisfied Sims players and SL corporate success stories, there has been plenty of room to learn and build newer offerings that extend the model.

That’s what these companies like Offerpal Media and Nurien are doing and, when you think about it, it makes perfect sense.

As Don Tapscott often says in his keynotes about his latest book, Grown Up Digital, the under-25 net generation is a generation “bathed in bits.” Certainly they know the difference between the physical and digital worlds – we all do.  But the beauty of well-done virtual experiences is that they provide for an immersive reinvention or amplification of one’s self.

I believe many of these virtual goods companies are just taking the 2-D platforms of Facebook and LinkedIn and extending them the logical next step into 3-D information and commerce platforms.

Already, Hollywood has shown that it thinks 3-D movies are where the public wants to go. With a virtual, 3-D platform, you won’t just exchange information with your friends and colleagues, but your virtual self will interact with them, negotiate, meet, and conduct business.

It will be very interesting indeed, to see where all of this leads, but I urge you to check out some of these technologies.