The Gyft That Keeps On Giving

Yesterday, I posted my exclusive Q&A with CJ MacDonald, founder & COO of virtual gift card company Gyft -- a company backed by Manatt Digital Media Ventures (my company) and Google Ventures, among others.  The company is less than one year old, but already is generating millions of dollars.

In my Q&A, I pointed out that Gyft is donating 100% of its profits in December to a worthy cause -- the Immunity Project -- a team of scientists and entrepreneurs who are offering the HIV vaccine for free to people around the world.  But, this point was buried -- so I raise its visibility here.

Why?  Because it is the holiday season after all -- and, as cliche as it sounds, it is the season of giving.  Gyft does just that.

Yes, that is a smart business move.  But, it is a real commitment nonetheless -- one that is worthy of two consecutive days of visibility.

5 Questions with Gyft’s COO CJ MacDonald -- My Exclusive Q&A

      Gyft is a digital media/e-commerce company I have been watching for some time.  The company takes a unique approach to gift cards, which are a staple of the holiday season.  Gyft offers virtual gift cards -- and enables the transfer of value from physical gift cards already purchased -- to your mobile phone so that you never lose that value.  Gone are the days that your cards are discarded into some drawer and never seen again.  Now, that gift card value is never lost.  And, merchants don’t mind because -- and this is something I previously didn’t know -- they were not able to book gift card revenue anyhow until those gift cards were actually used.  

      My company, Manatt Digital Media, is an investor in Gyft.  So, I believe.  We believe.  So does Google Ventures -- also an investor.  The company -- which is based in the Bay Area -- is less than one year old.  Yet, it already has generated "millions of dollars of revenue,” in the words of co-founder & COO CJ MacDonald.  Even more impressively, CJ expects several millions more in revenues being generated in the Thanksgiving to Xmas period.  And, get this -- in a perfect ode to Thanksgiving (with an emphasis on “giving”) -- CJ and Gyft are donating 100% (yes, 100%!) of all of its profits to a worthy cause for the entire month of December -- to the Immunity Project.  So, Gyft is not your typical e-commerce play.  It is innovative, disruptive (in the most positive of ways where everyone wins), and has a social conscious.  

      With that intro, here is my exclusive Q&A with co-founder & COO CJ MacDonald:

      (1) What is the reason your company exists (and what problem(s) are you looking to solve)?

Over $100B is spent every year on gift cards in the US alone.  90% of these cards are plastic and often end up lost, stolen or forgotten.   At Gyft, our mission is to digitize the Worlds gift cards and make it easier for consumers to transact.  The reality is most people have their phones on them at all times so why not store your gift cards on your phone.  Gift cards are becoming more and more popular and our vision is to streamline the market.

     (2) How are you different from your competitors?

Biggest difference is we are focused 100% on gift cards.  There has been a lot of buzz recently around social gifting and mobile wallets.  Gyft is often thrown into one of these buckets.  We spent a lot of time thinking about the consumer experience and wanted to make sure we built something simple and elegant.  We often get requests to add loyalty cards and coupons but need to tackle and provide the best experience around gift cards before we tackle anything else.

     (3) Why will you succeed (and what is your single most important ingredient for success)?

We have a team full of Rockstars!  We have a great product! We are tackling a massive problem for both retailers and consumers. They key is focus, execution and passion but we are in an excellent position to disrupt a massive market.

     (4) What makes you unique (and what do you enjoy most outside of building your business)?

I never take “no" for an answer or leave any rocks unturned.  There are a lot of ways to make money but I believe you have to be passionate about what you are doing in order to be extremely successful.   Family is #1 and I love sports and the outdoors.  I try to surround myself with people smarter and better looking and I believe you get out of life what you put into it.

(5) What digital media trend is most interesting to you (and what is the least)?

The most fascinating digital media trend is hands down the evolution of Bitcoin.  Watching the Bitcoin price skyrocket over the past 45 days and all the media love/hate relationship is very entertaining.  You have to admit there is something there.  Least favorite:  Lack of mobile adoption from large companies.  So many massive companies and players trying to play catch up these days.

My 1300th Post -- Bullish On Content (& Creators) in This Digital Media World

This post marks a personal milestone -- my 1,300th digital media musing.  That’s a lot of writing.  Much of it fueled by coffee.  But ALL of it fueled by passion.  I love what I do.  I love being part of the bleeding edge where media meets technology -- and all of the opportunity that mash-up creates.

Ahh, yes.  Let’s talk about creation -- creation in the digital media world.  Specifically, let’s talk about the creators of content.  Those who imagine it.  Those who take those ideas and make them tangible.  Those who finance it.  Those who develop it.  Those who direct and act in it.  Those who package it.  That collective expression of “creation” is unique -- one-of-a-kind.  And, so long as it is compelling, that creation has an opportunity ... the potential ... to find, and impact, an audience.  All it needs is the means to do so ....

Now, let’s talk about that audience.  That’s us.  That’s you and me.  And, that’s all those overseas -- rich and poor.  We now live in a connected world where the vast majority of people on this planet can be reached -- 24/7.  The mobile device -- that is the connecting tissue.  It is this technology -- which, unlike the unique creation of content can be replicated (e.g., millions of identical iPhones) -- that gives compelling content the vehicle ... the means ... to find that audience.  To find you and me.  To perhaps even have a global impact.

THAT is power my friends!

That’s why, amidst all of the “disruption” to traditional media business models in this brave new digital media world (in which the long-anticipated convergence is finally happening), I see great opportunity for ALL participants in the media eco-system.  Yes, many current players will adapt too late and will miss this “new golden age” of content fueled by this newly multi-platform and always-connected world.  But, new innovators will take their place and expand the overall media opportunity both for creators and for the consumers who crave engagement with those compelling creations.  We want more, not less.  Just look around you.  We are engaging with content like never before.  Everywhere you look, we are mesmerized.

That’s why I am long on media and entertainment.

I am long on the content creators.

I am bullish.  Very.

Long live content.  Long live the king!

5 Questions with Kiosked’s Founder, Antti Pasila -- My Exclusive Q&A

     Here is my latest exclusive Q&A with a “company to watch” in the digital media world.  This time, meet LA/Silicon Beach-based ad-tech company, Kiosked, and its Founder & Head of International Business, Antti Pasila.  Kiosked is a company born out of deep technology developed out of Finland, which has become a hot-bed of innovation.  Antti, in fact, just recently relocated from Finland to Los Angeles to take the company's technology (and the service on which it is based) global.  The company’s mission is to bring deep online engagement and impact for brands via seamless and non-obtrusive ad insertion as consumers scroll over any video within its fast-growing network of participating sites.  Watch a video of any kind (not just an ad) -- scroll over something you like (let’s say,  a pair  of sneakers worn by an actor) -- and, voila, you see a precise match for those sneakers (and have an opportunity to buy them right then and there).  The company’s mission is bold, but so are its blue chip backers, who include technology legends such as Kaj Hed (majority owner of Rovio -- “Angry Birds”) and Kevin Wall of Craton Equity Partners (and CEO of legendary live event producing company Control Room).  These and other investors have invested over $12 million into the company.  I have followed them closely.  I like what I see.

     On with the questions:

   

     (1) What is the reason your company exists (and what problem(s) are you looking to solve)?

       

When we started Kiosked we saw that there are some fundamental problems with today’s online marketing and in how online publishers are making money with their content.  We created a way to solve both problems by making them help each other. There are some inherent problems we were looking to solve:

--  Online ads are not performing well. Click-through-rates have fallen from 9%to 0.1% in the last 15 years while marketing budgets are growing double digits.  This doesn’t add up since publishers are running out of ad space to generate the required revenue -- and all this leads to a worse end user experience.

 

-- You don’t need to shout and spam if you can deliver your message at the right time to the right person. SEM is a good example of better targeted marketing. It delivers the right kind of marketing message to a consumer at the right time. The drawback with SEM is that, in that case, the consumer already needs to know what they want.

-- Online publishers are in deep trouble and many of them are really struggling to make money with their content. The huge amount of content available for free and the poor performing marketing models are creating myriad problems for many publishers. High quality content creates a high degree of shopping impulses, but publisher are very bad at taking advantage of them -- and monetizing them.

In a nutshell, Kiosked helps brands and merchants to sell and communicate more effectively online and, at the same time, we help online publishers to monetize their content and the impulses they create.

     (2) How are you different from your competitors?

We have competitors on all the different verticals we work on -- but no one else has created an end-to-end platform like we have. Our business is two sided -- on one side we work with brands and merchants, and on the other side we work with online publishers. The platform we built connects these two in a scalable and highly automated way.

We are the only company in our market that is media and platform agnostic, meaning that our technology works on any type of visual content (images, video, broadcasting, apps etc.), on any type of publishing real-estate (blogs, social media, news sites, stores etc.) and adapts an optimal user experience for all connected devices.  Compared to other companies in the various verticals in which we work, we are superior in automating the service and overall value proposition.  Both the content enriching algorithm which makes us an extremely scalable solution for publishers with large amounts of content -- and the real time e-commerce integrations we built to connect with our merchants -- make us very unique in many ways.

     (3) Why will you succeed (and what is your single most important ingredient for success)?

I think we will succeed because we know what we are doing, we understand where the market is going, and we are very consistent in what we do. We’ve been building Kiosked with the original blue print for 3 years, while iterating almost daily. We listen to customers and are very analytical in what we do. I feel like we also have an extremely good balance between creative design and following data we collect.

The market we are in is massive and it is growing double digits every year. In 15 years e-commerce will be 4 times bigger than it is today. Online is becoming the single most important source for content consumption, and the mobile phone will change the way we do shopping in the future. There’s an almost unlimited amount of opportunities for us to close on -- and we are confident that we are addressing the right things now to grow with the market and evolve as consumer behavior changes.   

All this is good, but without the people there’s nothing. Without a doubt the single most important ingredient for our success will be and is our team. Our team consists of 70 immensely talented people with different skill sets and backgrounds. Our investors and advisors are world class, and we’ve been lucky enough to partner with some of the best companies in their respective industries to make sure Kiosked becomes a huge success.    

     (4) What makes you unique (and what do you enjoy most outside of building your business)?

Besides having a great passion for the things I do, I’m genuinely interested in everything and anything, especially if it has to do with technology or business. I fall asleep every night listening to a documentary, and I read a lot (not books -- mostly short articles).

For the last 3 years Kiosked has been my work and hobby. I love to work and I know that people around me can see that as well. The little spare time I have, I love spending it with my friends both in Finland and USA -- and most of it usually with my best friend and wife, Johanna.  

     (5) What digital media trend is most interesting to you (and what is the least)?

There are so many trends to choose from. The whole industry is being turned upside down and inside out. It would be lame to say that in-content commerce and marketing would be the most interesting trend, so I’m not going to pick that.

I think some of the truly interesting trends out there are within content creation, distribution and consumption. It’s changing, a lot and fast. I haven’t seen the obvious winning concept yet, but it’s needless to say that the whole industry, from production to distribution is going to change. When you walk down the streets of Singapore or Hong Kong, you can’t miss the masses of people who are walking to work their eyes glued to their phones, watching the latest episode of gossip girl or the daily news that they started watching at home. We haven’t seen this in Europe and USA yet (at least in the same scale), but many of the other mobile trends also took some time before they prospered in the Western markets -- and I’m curious to see how that will play out.

Creation of content is also changing fast. Today you don’t need a $100 million dollar budget to create a high quality movie -- and crowd-funding is changing the overall entertainment order of things. What will the business of studios like Warner Bros look like in 10 years? I bet Tarantino or Scorsese could raise the capital for creating their next blockbuster by selling pre-ordered tickets or VOD premiers through their social channels, instead of raising money from studios and investors. How these changes will impact overall quality of content is something I’m really interested about.

The least interesting trend for me is the rise of the IM apps (like Snap chat and WhatsApp). Of course I understand why they might be good businesses -- as well as their overall value -- but I just don’t understand why there needs to be so many different channels for communicating when the phone itself has calling and texting capabilities. It might be that I was just born in the wrong decade.           

“What Is Digital Media?” IN VIDEO

I Moderate, Therefore I Am (Going to Streaming Media West)

The annual Streaming Media West takes place next week - for the first time in Huntington Beach.  On day 2 -- Tuesday, November 19 at 10:30 am -- I will moderate a panel titled, “Online Distribution and Monetization Strategies for the TV Industry.”  My panel of experts includes representatives from different stakeholders in the online TV eco-system, including content creators, content distributors, and content “packagers” -- i.e., Jessica Sutherland (VP Content Development, USA Network), Paul Cochrane (Head of Entertainment & Lifestyles, Yahoo! Studios), David Tochterman (Head of Digital Media, Innovative Artists), and Mara Winokur (SVP, Starz Digital Media).

My goal is to keep introductions short, and insights long.  Should be a good one.

Jason Mraz & Rob Machado - A Benefit Concert That Only “Works” in San Diego

Two nights back, my wife, Luisa, and I attended yet another concert.  But, this one was quintessential San Diego -- and only could have “worked” in San Diego.  LA could try, but would fail.  New York?  No way.  Luisa and I said that over and over again as we watched the show with hundreds of others, most of whom had strapped on their flip-flops, perhaps the most San Diego of fashion accessories.

The event?  The Rob Machado 2nd Annual Benefit Concert -- a “cause” that is ocean/water-focused.  A cause that is simply ingrained in the San Diego surf culture.  Machado, in fact, is a surfing legend.

The headliner?  Jason Mraz.  A local San Diego boy.  We stumbled into him as we walked into the venue -- and Luisa gave him a hug.  That’s the San Diego spirit/vibe -- and what San Diego is all about.  No pretension whatsoever.  (The photo shows Jason on the far right in the red beanie -- another staple of San Diego fashion -- and Rob Machado to his left, of course grasping a surf board).

The venue?  The famous Belly Up.  Classic San Diego bar.  A “must play” 600-person venue for rock and roll and reggae.  Many of the “greats” have played here.  Check it out.  For any music lover, this is a place you must experience.  We joined friends Steve and Georgia Goldberg, fellow Minnesotans who also escaped down to San Diego and who own the Belly Up -- as well as the Belly Up in Aspen, as well as the Pacific Coast Grill on the Ocean up the 101 in Cardiff (one of the few “on the ocean” restaurants worth checking out when you head down this way ... wearing your flip-flops of course).

5 Questions with MediaHound’s Founder & CEO, Addison McCaleb

 

 

     Here is my latest exclusive Q&A with an executive and company you should know in the digital media and technology space but -- for now -- flies under the radar. Meet Addison McCaleb, Co-Founder & CEO of LA-based MediaHound.  I have come to know MediaHound and Addison over the past several months.  MediaHound is a new way to find relevant content of all stripes -- music, movies, TV shows, and books -- and, accordingly, gives you a comprehensive view of what may “matter” to you.  That is a holistic approach that is different from anything else I have seen.MediaHound comes from the University of Southern California (USC) Viterbi School of Engineering's new accelerator, Viterbi StartUp Garage, which has a compelling pedigree.  The accelerator is backed by blue chip VC Kleiner Perkins and digital media savvy talent agency UTA.  And, Addison and his team are young, smart, and passionate.  They have assembled a strong team of advisors -- and soon will officially launch.

     On with the questions:  

     (1) What is the reason your company exists (and what problem(s) are you looking to solve?

     MediaHound exists to simplify the discovery and sharing of great entertainment. There are so many ways you can consume content – digital rentals, streaming subscriptions, ebooks, and traditional hard copies – so we connect and consolidate all of that, letting you search, share, and discover across a comprehensive catalog of everything out there. We are both a toolset and a destination in that way.  One simple example: You might have the world’s best playlist of songs and want to share it with me, but if I subscribe to a different source than you, I’m are out of luck! By establishing universal links for all content, MediaHound makes it possible for people and brands to reach share or interact with their entire audience, regardless of source or platform.

    (2)  How are you different from your competitors?

     MediaHound is the only comprehensive, source-neutral platform out there. Various sources or services offer features or products that overlap with a portion of MediaHound, but nobody has our comprehensive and unbiased perspective, which is perfect for making entertainment social and providing incredible recommendations across sources and media types. On the B2B side, we provide a spectrum of unique tools that help businesses engage with their entire audience, not just the fraction of their users on one particular source.

    (3)  Why will you succeed (and what is your single most important ingredient for success)?

         Entertainment is the most talked about topic online, but the way we talk about it through blogs, ads, and social media is broken. We provide an elegant solution that is easy to integrate into the conversations people are already having, making them more meaningful, accessible, and social, without adding steps to the process. We believe we will succeed because of the inherent need people have to share, discover, curate, and collect the things they care about.

    (4)  What makes you unique (and what do you enjoy most outside of building your business)?

  

     We are a really nerdy company. A couple of us went to film school and all of us are big, geeky fans of different movies, books, shows and games. That unabashed love for the content itself informs what we do. (It also makes for some interesting debates).

    (5)  What digital media trend is most interesting to you (and what is the least)?

        We are super interested in the ongoing digitization of content and the fracturing of the digital distribution system. There have never been more options out there, but those options can be very confusing for the audience, and they can create barriers between people. I wouldn’t say that I’m not interested in a particular trend, but I think that the ongoing battle between Android and Apple gets quite a bit of coverage. I like both for different reasons, and when you focus too much on one particular product or feature, especially in media, you can lose sight of the big picture ways devices and users are moving forward. Behaviors are changing, but at the end of the day people just want to be entertained.

Netflix’s Ted Sarandos -- Distribution Windows Will Shut (& More Responses to My Direct Questions)

Yesterday morning, I attended a small event hosted by Bloomberg and featuring Netflix’s Chief Content Officer Ted Sarandos (who has been with Netflix since 2000), who was surprisingly forthright about the company’s thoughts about disruption and new business models in the over-the-top (OTT) premium video distribution world.  Here are some choice sound-bites from his interview (including from my after-the-event direct conversation with him):

-- regarding distribution windows, he started by saying he is not calling for "day-and-date" distribution (which means concurrent same-day motion picture release in theaters and online); BUT, after the event, I asked him some direct questions -- most particularly, whether he felt that “day-and-date” was inevitable.  In response, he indicated that he does expect these windows to essentially shut and feels strongly that that reality is best for all players in the video eco-system.  But, interestingly, he does not feel that it may make too much of a difference to consumers if the motion picture is released online precisely on the same date as theatrical release (in his words, “not sure if consumers will care if it is one week later ...”);

-- I asked him what that reality means for theatrical owners and their business model.  He indicated that theater owners will be fine if they focus on their unique customer experience.  As an example, he pointed out that a full 3-D “Gravity” experience cannot be achieved at home;

-- when asked how Netflix uses -- and will use -- its massive trove of data, he said “I’m not a believer of reverse-engineering content”; he said efforts to do so would “lead to a Frankenstein monster” of content; so, “don’t use data to guide good story-telling”, rather use it to determine how many fans a director like David Fincher has;

-- speaking of Fincher, Sarandos emphasized that NO one outside the company has access to its data to understand how well their motion pictures and shows are performing; that confidentiality is bound in its contracts;

-- he underscored that live sports are “not a priority”;

-- when asked about Amazon’s new strategy of releasing 3 episodes of its shows at one time, in clumps (as opposed to Netflix releasing all of them at once), Sarandos indicated that he/Netflix believe in more choice for consumers, not less; “why try to out-guess consumers” about what they want?

-- he also emphasized that Netflix’s economics are very different than the major television networks, because Netflix is not saddled by the scarcity of time-slots and making those slots and shows work; Netflix can have a very successful business with many “singles and doubles”, whereas all network shows must be major hits to succeed.