20,000th subscriber today!

November has been a great month for World Vital Records. Today we reached a significant milestone by adding our 20,000th paying customer. We’ll highlight her in an upcoming newsletter. She is a genealogist from Delta, Colorado.

In August we issued a press release when we reached our 10,000 subscriber milestone, and here we are just three months later at the 20,000 subscriber mark.

Our entire company appreciates each customer who signs up for our premium databases and also those who try our free services such as FamilyLink.com. We also appreciate our wonderful content partners who have helped us grow our collection of genealogical information. We’re approaching 1 billion names in our databases. And we appreciate our affiliates and business partners for helping us share our services with their customers.

The 20,000 mark is also significant because that’s how many paying subscribers Ancestry.com got in its first year, from April 1997 to April 1998.

Of course Ancestry.com is the pace-setter in the genealogical industry and one of the greatest successes in the world of online subscription content. To be where they were after their first year is a great accomplishment. We look forward to many years of serving families around the world. And we appreciate everyone who is making it possible for us to grow and prosper: investors, partners, customers, affiliates.

Thanks to all!

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Skype revenue: $50 million last quarter

From NY Times article on Skype’s new unlimited calling plan:

Over all, the Internet calling business is booming. Mr. Halpern said that by the end of the third quarter, there were around 8 million subscribers to Internet calling plans in the United States, up from 6.5 million in the previous quarter. That figure did not include users of Skype.

* * *

In the third quarter . . . Skype generated $50 million in revenue, a mere 3 percent of eBay

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MyFamily.com in the spotlight; genealogy industry validated

This isn’t new news–it happened on November 1st. Investors Business Daily published a nice article on MyFamily.com, and revealed that according to CEO Tim Sullivan, 2006 revenues will hit $150 million with an EBIDTA of $28 million. After being under the radar for several years, it’s nice to see MyFamily getting some decent media attention recently. I think the CEO is doing a good job at telling the story.

Here’s another impressive excerpt from the article:

Founded in 1997, MyFamily.com has grown organically and through acquisitions. It cornered the market by acquiring Genealogy.com in 2003 and RootsWeb.com in 2000.

Of the top 10 genealogy Web sites, properties owned by MyFamily had 74% of the audience in September. More than 8.4 million people in the U.S. surfed genealogy Web sites that month, according to comScore Networks.

The genealogy industry is in need of a serious #2 player in the space. While I co-founded Ancestry.com/MyFamily.com with Dan Taggart and our small launched the first site back in June 1996, the original founding team hasn’t been involved at MyFamily.com for many years now.

Several of us have gotten back together to work on an international genealogy company called WorldVitalRecords.com (we may eventually change the name to something else, but it’s a domain that works for now). We have partnered with Everton Publishers in Logan, Small Town Papers, and are in discussions with many other partners.

It is fun to be back in the genealogy business. Like Ancestry.com, World Vital Records publishes new databases to our web site every business day. Our email database is approaching 100,000 names and we are going to be launching some significant user generated content features soon.

It may take some time to become the #2 genealogy site on the web; but we think we have the team that can do it. And we think the industry is large enough so that there is room for us, and many others.

Only 5% of the world population is in the United States; so there will likely be dozens of successful genealogy companies around the world. We certainly hope to be one of them.

Contact me if you are interested in getting involved with WorldVitalRecords. We expect to grow next year and we are interested in genealogical expertise as well as international marketing experience.

(Note: MyFamily.com has asked me to mention when I blog about the company that I am no longer involved in the company, as a director, officer or employee. I am a small stakeholder in the company.)

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Self Publishing: First Books, Now Videos

Bob Young, the founder of Red Hat formed lulu.com a few years ago to enable authors to self publish books. The site has an Alexa ranking of 3,386. It has a nice 3-year Alexa chart.

Last week Lulu Enterprises launched lulu.tv, an online video sharing site where 80% of the revenue from subscribers will be shared with those who have uploaded video content. This revenue share is extremely generous. It will be interesting to see how many content providers will take the time to upload content here. There might be a catch-22 here: until there are enough paying subscribers, content providers might not want to make the effort to upload. But why would anyone pay $14.95 per month to subscribe when there is so much free video content on Google Video and YouTube, and dozens of other sites.

But content providers should be really happy that Lulu is pushing the envelope in terms of generous revenue sharing.

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Steve Jobs Was Right; I Was Wrong — I Wanna Own My Music

Because I was highly involved in the online content subscription business of Ancestry.com in the late 90s and early 00s, I thought I was pretty smart. When Apple jumped into the music industry with its iPod and iTunes service, I thought they were pretty smart, but I also thought that everyone else ganging up on Apple would cause a big dent in its music business, and that eventually the iPod would go the way of the Mac, and end up with a relatively small market share. I especially thought Steve Jobs was wrong when he said customers wanted to own their own music and not rent it. How could a pay-per-download model ever compete with an all-you-can-eat subscription model that would give me everything I ever wanted for a low monthly fee?

I had a Rio mp3 player back in 1999 or 2000, so I had a little experience with mobile music. But I had a lot of experience with online genealogy where basically every customer wanted unlimited access to everything. The subscription model worked great with genealogy. Every day we added new data. Every day customers had more content to search through to find their ancestors. I believed all-you-could-eat subscriptions were the way to go. I assumed this would be true in the music industry as well.

So I bought my first iPod, a 20GB version about 3 years ago, and I had lots of trouble with it. The battery went bad pretty soon. I had trouble with synchronization. And many of the audio books I bought on Audible were downloaded in a format that didn’t seem Apple friendly. I was pretty unhappy.

Later, I bought a Creative Zen, a 30GB, I think, and decided to try Yahoo Music, an unlimited music subscription service that launched with a great introductory offer of $6.95 per month. I was sure that a non-Apple player combined with an all-you-can-eat non-Apple music service would be much better than the Apple approach.

But the Yahoo Music service was not compatible with my Zen. I think I paid Yahoo for 3-4 months before getting around to cancelling the service. So then I turned to Buy.com, with its BuyMusic.com web site, and I started buying tunes there. But a lot of songs I wanted I couldn’t find there. And I had some difficulties getting the music onto my Zen. The music management software I was using was actually not that great.

Finally, a month or so ago, I decided it was time to try an iPod again, and this time it would be a video iPod. I needed to get some of the 10Speed Media video productions on a video iPod so I could show the work to potential customers. I also wanted to get tons of LDSAudio.com and mp3books.com content onto an iPod and start demonstrating the power of LDS audio and video clips to employees and customers of our LDS Media company.

So I bought a 60GB video iPod. I started using iTunes, which now has excellent synchronization, a way bigger supply of music than anyone else, a great podcast directory, and it’s easy to get videos onto my iPod as well.

More than anything, I have come to believe that Steve Jobs was absolutely right. People want to own their music. They don’t want to rent it. There are probably only a few hundred songs that I’ll ever want on my iPod. I have my running music, my easy listening music, and I want to listen to tons of podcasts and audio books. But music? Just my favorites. And I’d love to own them, thank you very much.

I have decided that the concept of an all-you-can-eat music subscription is really not that great of an idea for most people. We have the songs we love and we might occasionally start liking a new one. But paying $14.95 per month to try out lots of new songs? No thanks. I just want my favorite music, mainly songs from the 80s. I like to listen to the same stuff over and over and over again. Give me Earth, Wind and Fire’s “In the Stone” and Gloria Estefan’s “Turn the Beat Around” every time I run. I need those songs. I don’t want to sample new music when I exercise.

But with other types of content, like audio books and video, anything educational, I want variety. I almost never want to see the same movie twice. So I would want an all-you-can-eat subscription model there. With audio, I want to hear lectures from new conferences or from universities every month–different ones every time. So I want an unlimited subscription there, with new content being added regularly.

But Steve Jobs was absolutely right about the music. I do want to own it.

And now he owns me.

I am now an Apple iPod and iTunes fanatic. Apple has nailed it. From the awesome out of the box experience in opening the iPod to the feel of it in your hand, to the amazing video display, and the simple earphones that don’t have ear buds that keep falling off, to the incredible iTunes selection for music, podcasts, and video — the whole experience is phenomenal.

So it’s no wonder that consumer surveys show that Jobs was right and that consumers want to own their music..

Here are some interesting stats: 20% of Americans now own an mp3 player, up from 15% last year. 54% of teens do. But only 25% of mp3 users buy songs from a download service. Mostly they rip tunes from their own CD collection (since they already bought the music once.)

So Jobs wins round one handily in the digital music wars. But he still has challengers on all sides, and the biggest potential challenges (based on all the hype and investment and TV ads) might be the mobile phone companies. A few months back I read that more than 950 million devices capable of playing mp3 music would be shipped in 2009 alone, and that most of those devices would be cell phones.

So how will Apple handle the challenge from mobile phones? Many people are speculating that an Apple iPhone is in the works.

Wikipedia has an amazingly comprehensive article on iPod (compare it to Britannica’s content on iPod in case you are skeptical of Wikipedia. Okay, to be fair, we can’t access Britannica’s premium content, but can you imagine them having a better article on iPod than Wikipedia? No way. Wikipedia gets updated regularly, whenever Apple makes a new announcement or has new sales figures or new models. Wikipedia rocks.)

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Netflix: subscription marketing machine

A nice article by Motley
Fool talks about how Netflix lowered prices in the past year to stave
off competition from Walmart and Blockbuster. They will reach 4 million
subs by the end of this year and project more than 5.5 million by the
end of next year. Next year they will generate almost $1 billion in
revenue. Impressive.

Netflix has one of the best online marketing machines out there. They
are everywhere. Entrepreneurs and students of internet marketing would
do well to study all the ways Netflix markets their services.

The one month free trial offered on their home page is great.

They promote that offer everywhere.

  • Natural Search. They have almost 600,000 pages indexed by Google. Blockbuster has only 55,000.
  • Search Rankings. They rank #1 on Google for “dvd rental” and which gets more than 1,000,000 searches per month in the U.S. They are also #1 on Yahoo for “dvd rental”. They are #2 on Google for “movie rentals” just behind Blockbuster.
  • Affiliate Marketing. Last year they switched from BeFree to LinkShare, a high end affiliate marketing network. They pay quite well and have many affiliates.
  • Pay Per Click. They are outbidding Blockbuster (as of right now)
    on “movie rentals” and many other terms on both Google and Yahoo. Googspy shows them bidding on many keywords (although the Googspy list only shows a tiny fraction of what people are really bidding on.)
  • Social Networking. Last year they introduced Netflix Friends. Haven’t heard how well it is working.
  • Online advertising (banners and rich media). Netflix had the 4th largest budget for online advertising in both August and July.
  • Email list size. I haven’t found this yet, but I’m guessing that
    millions have signed up for their free trial offer and that their list
    is probably much, much larger than their subscriber base.

Here is the management discussion of their business from a recent 10-Q.
And here is an interesting block called Hacking Netflix that contains tons of news and info about the company.

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MobiTV Hits 500,000 Subscribers

USA Today profiles MobiTV, the company that provides dozens of TV
channels to cell phone subscribers. More than 500,000 customers are paying $10
per month to watch TV on a 1-2 inch screen.

Does anyone know how MobiTV markets their service? I’ve never really seen
it advertised. Do the carriers themselves promote it? And if so, how?

The company also announced MobiRadio (50 satellite radio channels) as a
separate subscription at a conference in San Francisco this week.

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Wall Street Journal Online Subscribers

WSJ Online ended 2004 with 712,000 subscribers up only 3.3% from the 689,000 in 2003. (Paidcontent.org) Here is the full press release. I’ve been a subscriber for several years. I think the subscriptions would increase several times faster if they would allow customers to search archives–not just the last 30 days of articles.

They lock up their archive content and charge extra fees for each article. I bet they could get millions of subscribers if they opened up their archives–but then they would be cannabilizing their royalties from the high end data services like LexisNexis…. so they are unlikely to do this.

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Yahoo Buys Music Match: Adds 225,000 Subscribers

Yahoo is paying $160 million for San Diego-based Music Match. With it, Yahoo gets 225,000 subscribers who pay $8 per month for the all-you-can-eat subscription service that offers 700,000 songs to computer users. This is similar to RealNetworks Rhapsody service, which has more than 550,000 subscribers. Napster is the first to offer an all-you-can eat portable service, which utilizes DRM technology from Microsoft to allow you to “rent” all this music and play it on your portable device–but it will expire if you discontinue your subscription. This model is far superior to the pay-per-download model–a better value for consumers and an annuity for the provider.

With Yahoo buying into the subscription model, and with Microsoft aggressively promoting its Janus DRM service, I think the demise of pay-per-download services (like iTunes) is accelerating.

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