Ovitz's Web Firm Retools to Add Entertainment Info.A harsh truth has come home at CheckOut.com, the online venture funded by Yucaipa Cos. and super-agent Michael Ovitz Michael S. Ovitz (b. December 14 1946, Los Angeles, California) is a former talent agent and Hollywood powerhouse who served as the head of the Creative Artists Agency from 1975 to 1995. : Being a pure e-commerce play doesn't have much potential to bring in the bucks. At the same time, pure content sites, unless they have a huge corporate parent, can't subsist sub·sist v. sub·sist·ed, sub·sist·ing, sub·sists v.intr. 1. a. To exist; be. b. To remain or continue in existence. 2. on ads alone. So CheckOut.com is undergoing a redesign that tries to be a bit of both -- a place where users can buy things, as well as get the latest scoop on Hollywood, music and gaming. CheckOut.com is private and officials refuse to divulge financial results. They insist the company is doing fine, but admit that profit margins for e-commerce are so slim that it makes sense to diversify. "All these people who are selling new music (online) are just barely squeaking squeak v. squeaked, squeak·ing, squeaks v.intr. 1. To give forth a short, shrill cry or sound. 2. Slang To turn informer. v.tr. by," said Chief Executive Richard Wolpert. "The margin on used (compact discs) is about 50 percent. The margin on new music in stores is about 20 percent. The margin on new music online is like 5 percent. And all the companies out there buy CDs from the same two or three people -- there's no advantage. It's a big price war." Content vs. commerce With a combination of e-commerce and content, CheckOut.com can generate revenue from online sales, banner ads A graphic image used on Web sites to advertise a product or service. Banner ads come in numerous sizes, but are often rectangles 460 pixels wide by 60 pixels high. Also 460 x 55 and 392 x 72 sizes are commonly used. and corporate sponsorships, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Wolpert. Wherehouse Music made a $20 million investment as part of CheckOut.com's deal to act as the company's online store. The Web site, which leans heavily toward e-commerce by selling CDs as part of the Wherehouse deal, will divide into four online segments: the store and three distinct content categories. "Before, we didn't do a good job (differentiating) between content and commerce," Wolpert said. "We'll now have a section labeled as the Wherehouse store, then three others: CheckOut Music, CheckOut Movies and CheckOut Games for the content side." Joe Butt, an analyst with Forrester Research Forrester Research is an independent technology and market research company that provides its clients with advice about technology's impact on business and consumers. Corporate facts
"The trend right now is that companies are doing anything they can just to stay afloat," Butt said. "Choices that are being made now in the configuration of the sites and the architecture of what is presented will have severe repercussions repercussions npl → répercussions fpl repercussions npl → Auswirkungen pl in determining whether they are still playing in six months." Besides trying to merge content and commerce, Butt said it's essential for companies to become a part of a "killer clique (mathematics) clique - A maximal totally connected subgraph. Given a graph with nodes N, a clique C is a subset of N where every node in C is directly connected to every other node in C (i.e. C is totally connected), and C contains all such nodes (C is maximal). " -- part of a group of aligned Web sites providing services for each other. Last year, CheckOut.com entered a "co-marketing" agreement with Talk City, a company that supports online chat rooms and bulletin board services. As part of this agreement, the two companies co-host live events, including celebrity chats and 24-hour chat rooms on topics ranging from "Oscar Snubs" to "Celebrity Dream Date" to "Alien Babes Babes is an American situation comedy series that ran for one season on the Fox Television Network from September 13, 1990 to August 10, 1991. It was produced by Dolly Parton and Sandy Gallin's Sandollar Productions for Twentieth Century Fox Television. ." CheckOut.com also has content agreements with several entertainment news organizations, including Billboard, Variety and Reuters. Crowded field Even with these moves, Butt believes CheckOut.com is running a risk. By entering an increasingly crowded entertainment information sector on the Web, the company will have to go up against E! Online, Mr. Showbiz, Hollywood.com and the online versions of entertainment magazines. "I don't want to be the absolute prophet of doom, but it's pretty bleak," he said. "There's lots of sites out there that have been around longer and already have got a claim." Others disagree, and say the base CheckOut.com has laid as an e-commerce site already serves to get the company's name known to the public -- and that expanding its content is a natural next step. "Basically, being a retailer of entertainment products distinguished them from the others," said Cameron Meierhoefer, an analyst at PC Data. "But retailing is a tough world -- it's very expensive and not very rewarding. Since (CheckOut.com) is selling movies and DVDs, they're going up against the real heavy hitters heavy hitter n. One that is predominant, as in influence or power: "Especially when a candidate is a challenger, appearances with heavy hitters from the party lend an air of credibility" like Amazon and Barnes & Noble." Meierhoefer said there is enough interest in online entertainment to support three major information providers -- and that CheckOut.com could very well parlay An open programming interface (API) to a service provider's network (the network operator), developed by the Parlay Group (www.parlay.org). By enabling the customer's application to talk directly to the network, it allows the end user to have greater access to network information as well its new content emphasis into one of the top spots. E! Online, which attracts more than 3 million unique visitors A count of how many different people access a Web site. For example, if a user leaves and comes back to the site five times during the measurement period, that person is counted as one unique visitor, but would count as five "user sessions. a month, is pretty much the top dog, he said. CheckOut.com, which had 784,000 unique users in January, is in the running for the remaining positions alongside Mr. Showbiz and Hollywood.com. Meierhofer agrees that mixing sales and content is a good strategy, but warns that several Web sites have tried a similar ploy ploy n. An action calculated to frustrate an opponent or gain an advantage indirectly or deviously; a maneuver: "A typical ploy is to feign illness, procure medicine, then sell it on the black market" and failed. "There are other people who've tried to be two types of things by double-dipping into commerce and content," he said. "Boo.com is about fashion and promotes the entire culture, and also tries to fold in the retail aspects of it. No one would point to them as a success." The redesign should go live within the next month, Wolpert said. |
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