I love comedy, and I thought I got it until I spent some time at funnyordie.com.
The site is just as godawful as the content on it. If this some random site I was recommended I'd understand, but this is Will Ferrell's site.
Let's digress. I've been an SNL fan for as long as I can remember, and Will Ferrell ruled SNL when he was on. I lived in Chicago and regularly was at Second City and Improv. I even did stand up improv at Improv once. I think I know funny when I see it. I loved almost any character Will Ferrell played (and how did they come up with such brilliant characters with brilliant names like Jacob Silj). I am right now boycotting SNL, ever since Ratchel Dratch and Amy Poehler joined. I knew both of them from Chicago, and they are not funny. They are an insult to the power trio of women who were at SNL before them. I am talking about Cheri Oteri, Ana Gasteyer and Molly Shannon. Now they were funny.
Back to funnyordie. I am looking at Will Ferrell's picks (posted on October 9th...update your site man!). The comedy idol is picking his top funny videos from thousands. They've got to be good, right? His top pick is called High Five. I watched it a few times, at different days just to make sure it's not me. It's not me. The video is not funny, it's a joke. His second pick Weng Weng Rap, is so so at best. I still ask; why bother, putting your name next to this crap? One of Adam McKay's favorites is a guy getting hit by a truck while filming a commercial. Adam McKay who I also knew from Second City at the time Dratch was there and thought he was a genius. But the videos they are endorsing are horrible. Are these guys really serious about this site?
Here is where it gets worse. I went to the various tabs (most viewed, most recent, most buzz etc) they've borrowed from YouTube. The numbe one video in three categories, most buzz, most favorited and most viewed is a UGC piece from Will Ferrell and Adam McKay themselves. It's called The Landlord, and it's gotten 50M views. It's horrible...there is nothing funny about it whatsoever...why is a 2 year old girl calling Will Ferrell a bitc...funny? Somebody please tell me why it is funny. Because it ain't.
Here is what I think is going on. While some comedy sites are regurgitating all sorts of old stuff (funnyordie has the fake Tom Cruise videos from 10 years ago), the world of comedy has moved on.
And there is one man, who has taken comedy to a whole new level, and I doubt anything else can really be funny unless it is at his style and standard.
That man's name is Sasha Baron Cohen...aka Ali G aka Bruno and most famously aka Borat.
People got sick of prepared shows and preferred real people in reality shows (I still belive it all started with 'When Animals Attack' btw). Same is happening in comedy. People went from prepared skits to reality comedy like Ali G does it. It is far more unusual, far more revealing, far more offensive, and as a result far far more funny. When Ali G pitches the Ice Cream Glove to VCs, that's funny, because what makes you laugh is how real his counterpart is. When Bruno goes on the catwalk as the "Chrysler Muse" that's funny for the sheer guts of pulling it off, and probably above all when Borat gets on stage at that rodeo...that is immortal stuff.
So frankly, I am done with the other kind of comedy. The new kind is far more powerful because you are just not used to where it will come to hit you. The sooner the other guys realize this the better it is for them so we don't end up watching crap like the stuff on funnyordie.
By now everybody has heard that Microsoft is investing $240M into facebook to own 1.6% of the company valuing facebook at $15B.
I don't know if that valuation is too much or too little, but somebody thought so and paid it. $15B definitely sounds too high, and as I wrote before, clearly the highest valued venture backed company to raise a private round.
But for those who think it is too highly valued, compare Facebook to Yahoo valued at $42B. Look at the chart below.
There is Yahoo at $42B on the decline, and there is facebook at half of Yahoo's pageviews on the rise.
Last week, I was fortunate enough to be a panelist at the Virtual Worlds 2007 Conference. One of the benefits of being a speaker is getting a pass to see other panels, and in one particular panel, Blake Lewin, VP of Product Development of Turnet Broadcasting was speaking. One of the questions asked was the content viewing habits of the speakers. About half of the people on the panel, including Blake, said they don't watch cable or broadcast TV. You may think a VP at Turner Broadcasting, not subscribing to cable or satellite is ludicrous, but Blake had a very good answer to his content consumption: He said "Netflix + iTunes + video games". Why on earth those three? The answer may give a glimpse of what the future of content will look like.
Why Netflix? Because it's one of the most convenient ways to watch premium content, i.e. movies. You order it online and it shows up at your door, the selections are endless, and the price is affordable. Once we have wireless HDMI, (or long enough VGA cables) it will be seamless to connect a laptop to a LCD TV and with the downloadable version of Netflix you will watch high quality movies instantly. Companies like Azureus, are already bringing high definition content to your PC.
Why iTunes? Because that's where you get all the other premium content, namely, TV shows & music. Today you can watch Desperate Housewives, Grey's anatomy, Mad Money all on iTunes. Again it's convenient, instant, and affordable. Between Netflix & iTunes you are almost 100% there.
Why video games? Because that's the endgame. Video games are content that you interact with. Now that's a big deal. It is high quality content, it is immersive (try the Wii), and it is highly satisfying because of its interactivity. One sometimes wonders why anybody would watch an action movie, instead of playing a video game where you are in the action. There will be a day, when most entertainment can and will come through videogames, simply because people will prefer being involved in action instead of just watching it. I've written about Hollywood vs. video games before here.
So Blake may be a Broadcasting executive who doesn't watch broadcast TV, but he sure understands where the future of content and entertainment is going.
Tim O'Reilly has a very intersting article about facebook apps. The data he's found is that even though there are 5000+ facebook apps, 87% of the usage comes from 84 apps. This makes anybody looking at the data question how monetizable these apps are. Techcrunch lists the top 20 apps below:
1. Top Friends (Slide) 2. FunWall (Slide) 3. Super Wall (RockYou!) 4. SuperPoke! (Slide) 5. Video (Facebook) 6. X Me (RockYou!) 7. iLike 8. Movies 9. Graffiti 10. Likeness (RockYou!) 11. My Questions (Slide) 12. Quizzes 13. Mobile (Facebook) 14. Free Gifts 15. Booze Mail 16. Compare People 17. Honesty Box 18. (fluff)Friends 19. Vampires 20. Scrabulous
I know the developer of one of these top twenty apps. It's not important which one it is, but it generates about 500k pageviews a day, and each pageview monetizes at $0.10 to $0.25 CPM. If I take $0.20 as the average, it comes down to $100/day. Tha's $3000/mo, or $36K/year. Not bad if you are a sole programmer, but a far cry from making you rich beyond your wildest dreams.
The #1 app, Top Friends has 2.8M active daily users. Can't easily tell how many monetizable pageviews they get per user per day, but even at this massive usage, it's hard to see them making more than $1000/day. That's $360K/year, again not bad, but not a slam dunk.
When you look at how little these apps are monetized it's easy to dismiss how much money one can make from it, but I think O'Reilly hits the nail on the head with this comment:
"While the report focuses on the market for current Facebook applications, it seems to me that the future opportunity is less in Facebook applications per se, and more in the development of applications that use the social graph embodied in Facebook for entirely new purposes. "
I can't agree with this more. We are seeing the first wave of apps, and I can safely say, that I know of a few other apps being developed that use the platform in a completely different way. These apps take longer to build, distribute slower, but have much longer lasting value. It's those kinds of apps that can possibly make a lot of money, and it won't be limited to advertising. More to come on this.
One of the interesting dilemmas of life in America is that we are all pro economic growth and progress, but we are not necessarily in favor of what that progress requires, which in short is, consumption. The world economy grows if Americans consumers keep consuming and that's exactly what they do. After all, if you are a "consumer' then by definition you consume. And consumption is turning energy from a useful form into a less useful form, creating entropy. Not very nice.
Well, the family in this picture has solved this dilemma, and that's why they are smiling. They are also smiling because I told them to do so when I took this picture last August in Cesme, Turkey. Alacati to be exact, one of the most popular vacation resorts in Turkey.
Popular vacations resorts mean traffic and parking problems, and that's the genesis of this story. Every night, when we went out my brother and sister-in-law, in their infinite kindness dropped us off in Alacati and when looking for parking. That means we had to wait right next to the numerous stands where local merchants sell corn. This picture is of one of those stands, and my latest friend in Cesme, M for short, is the father in the background (his real name is unpronouncable for most of my readers).
Since I had 15 minutes every day to kill waiting for my brother to park, I talked to M about life in general, not unlike Kramer and the soup Nazi. But perhaps I've been a VC for too long, inevitably the conversation got to: "soo what's your cost of goods on the corn?" and "how many ears do you sell per day?". So it turns out the retail boiled corn business is interesting. M sells each corn for $4 to tourists, and $2.5 to locals which is a more than fair ripoff rate (assume for arguments sake one US Dollar equals one Turkish Lira. It is actually 1.2 right now, but given the way the dollar is going, by the time you read this, it will be 1). Let's assume all corn goes for $2.5 just to be conservative. He buys his corn every morning from Urla which costs him $0.8 to $1 per ear depending on quality. Let's again assume M uses nothing but the best for his customers. It costs him slightly less than $0.5 per corn on transportation, heating, lighting and other variable costs.
This results in $1 of contribution margin per ear of corn. His extended family operates five such stands. They are all in strategic places because M's day job is at the local municipality where he's been working for 27 years. That's his sustainable competitive advantage. The five stand sell 100 ears of corn per day and as a result he makes $500/day on corn. There is no other costs because all members are family and they don't draw salary, they all work for equity. Taxes are immaterial in his case, what the government asks from these merchants is $70/year. They don't need their taxes, a booming touristic place more than makes up in taxes from tourism.
The season in Cesme is longer than most other vacation results starting from the 1st of June going well into September. M, has a good 100 days where he hits 500 ears a day. Long story short, during his summer vacation M, family makes a clean $50,000 that they put straight into savings. His day job covers living expenses.
So the family you see in this picture saves at least $50,000 per year. That's $4000/mo in a location where expenses are much much lower than in America. The average savings rate in America is nearly zero dollars per family. When you read the news about the subprime turmoil and overall "credit card debt" culture in America, you can probably now see why this family is smiling.
The secret to freedom is not making a lot of money but spending little. M and his family have gotten that, and that is the solution of the very first dilemma I talked about. First stop consuming and save, then think about how much progress you can do with that. That's the way out.
Next time you buy corn in Cesme, you think about that.