This is Monday’s blog post, but it posted 2 days late… Oops 🙂
Facebook just announced that they acquired Branch – a conversation platform – today.
This would have put the heat on amplifize had I been pursuing it, and I’ll tell you why. Between Google Reader, the websites that already have epic conversation modes (reddit, digg, etc), and the untracked, but still relevant flow, of link passing through email, the demand for sharing and discussing relevant, and targeted, content is clear. The business model is not.
The challenges in that arena are the following:
- CPA per my testing is about $8-$10 when buying users off Facebook
- LTV is incredibly low
- Alternatives are readily available
- Defensibility is low
- And here’s the doozy… The content you’re trying to monetize on top of is already available for free on the web setting the value of content very close to $0.
The solutions to 1, 3, & 4 are very well linked. Create an amazing product that compels folks to invite their friends simultaneously decreasing CPA while making the switching cost that much more expensive through network effects.
I know amplifize could have achieved that goal given time and resource. (Aside: what Branch did that was much smarter was not try to be a reader AND a conversation platform. They are inherently separate audiences, and by addressing both we (at least) doubled the work we had to do to succeed.)
And I’m sure that by using social login, sharing and discovery of Branch was much easier. I didn’t get there, and so I can’t speak to its effects on CPA, but those guys did a great job of helping a user broadcast content to their existing networks while building a compelling reason to come to Branch thereafter.
But there’s just no quick and dirty way around issues 2 & 5. And that’s where the problem lies for Flipboard, reddit, digg, amplifize, and, ultimately it seems, Branch.
My vision to solve this problem for amplifize was that user-powered curation was the future of monetizing content. A modern newspaper should only deliver the content I want and it should know how much I can consume and when I consume it. If I only read 3 long form articles per week, and only on Sunday, then have my Sunday edition be that. If I always read the top sports news Monday morning, then, bam, there’s my Monday edition. All of this can be built by watching my patterns of consuming, sharing, engaging, and dropping off. Simultaneously, by tagging content, or describing it in certain ways, I implicitly build an ontology that creates the sections of my own personal newspaper. It may not be A1, Local, Sports, but Comics, Technology, and Page Six. All implicitly observed and explicitly packaged for me, by me.
And my vision involved finding a way to do so at 50¢ per day with a $1.50 Sunday edition – using pricing nostalgia to connect old and new.
The modern editor is everyone. However, if the signals disappeared because the conversations moved to everyone’s existing social network, then creating the daily digest would become impossible. That’s why this acquisition would have created sleepless nights.
I don’t know where Branch was going to take their vision, and I’m now really excited to see what Facebook does with it. But I think that ultimately they too fell victim to the allure of a huge demand without cracking the CPA/LTV nut that had the goodies inside.
And this is why content 2.0 is hard.
