I wanted to know more aboutBabelgum, the new venture from Silvio Scaglia and Erik Lumer. They call it “The global internet TV network”. Scaglia is chairman of FastWeb, the second largest wireline telecommunication company in Italy. Previously, he was CEO of Omnitel, now Vodaphone Italy. He is known to be the 746th richest man in the world according to Forbes. Erik spent several years in strategy consulting for IT firms and Telcos, and has a strong IT background. So I interviewed Erik (herunder, not easy to hear, but I kept it). I also attended their launch party at the MIP TV in Cannes, France last tuesday. I estimate they spent 250 000$ on it : minimum guarantee for Spike Lee, venue and decoration, food, PR and technology. They have the financial backing.
What is Babelgum?
Babelgum provides “the immersive viewing and high resolution of traditional TV with the interactive capabilities of the internet”. They use peer-to-peer technology . They will offer professional video material from professional authors, producers, confirmed talents and “a broad range of topics from lifestyle to sports, niche or mainstream”. They are not about Users Generated Content. Viewers can build their own channels. It’s community TV of copyrighted material produced by professionals.
The business model
It will be free to view. Babelgum will monetize traffic. The idea is that if they can profile the audience, through a better understanding of what the audience is viewing, then Babelgum can sell targeted advertising. Potentially, it’s TV advertising combined to Direct Marketing techniques.Doing so, they bypass the massive, non qualitative and less attractive YouTube like environment.
Although Erik does not want to compare to Joost, I would say that they are targeting the same type of authors and audience, and work around the same business models. Eric would not discuss traffic but confirms that he will build advertising revenues only when they have the audience and a compelling product. In the meantime, they will pay Minimum Guarantees to authors. How much? Erik mentioned 5€ per 1000 clic but would not say more. If they can spend 250 000$ on one single event, they most likely budgeted a significant amount to start with. They are targeting 10 000 hours of programs for 2007. My own experience says that this is far from making a service longlasting and successful.
.I interviewed Erik : lot’s of noise in the background. Stick around.
What did Spike Lee brought to the show?
Babelgum brought Spike Lee on for the evening. He will also use Babelgum to showcase footage originally commissioned to support Unicef. It’s agreat marketing coup, got people in and coverage. Spike Lee discusses his relationship with internet, his beginnings as a film maker. The challenge, in his opinion, is distribution. Coming out of film school does not give you a job nowdays. One needs to get one’s work seen. As he says, he was born when he was born. And Babelgum was not around then!