Can this .COM succeed?

Discussion in 'Web Design and Development' started by sigamy, Nov 3, 2006.

  1. sigamy macrumors 65816

    Joined:
    Mar 7, 2003
    Location:
    NJ USA
    #1
    I'm looking for some advice. I have the opportunity to purchase a failed .COM. The .com put indie films online in iPod format for people to purchase. The profits were split 60/40 with the creator of the content. The site included short films, how to video, animation, full length documentaires. Basically take all the great indie content out there (the content that iTunes wont' take) and make it avaialbe for people to purchase for a buck or two.

    The founder of the site says that he just didn't devote enough time to make it work.

    The problem with this business is the high bandwidth costs. It looks like you would basically need a dedicated server with at least 1500GB bandwidth. That is going to run about $200/month. I have no money so I'd beg, borrow and steal to get some seed money to purchase the site and then pay for hosting for a year to try to grow the site.

    So...what do MacRumors readers think? You all would be a big piece of the target market for this site. Most of you own newer iPods, most of you surf the web and are open to downloading content. Would you pay for indie content? Or do you feel you get enough from free podcasts, vidcasts and YouTube?

    Do you think it is worth it to take a chance on this, put 10k into the business in hopes of selling the .com down the line?

    And on the technical side--would it be possible to use a shared hosting service for this site? Some of the videos could be 30 minutes long-150mb in size.

    Thanks for any advice.
     
  2. Swarmlord macrumors 6502a

    Swarmlord

    Joined:
    Sep 18, 2006
    #2
    Did you review the business plan the guy wrote when he started the business? Did he hit any of his numbers in visitations and purchases? Sounds like a tire kicker magnet to me.
     
  3. Knox Administrator

    Knox

    Staff Member

    Joined:
    Jul 1, 2002
    Location:
    UK
    #3
    I think it comes down to the content - if there's compelling and unique content then people will come, and I'm sure people would be willing to pay if it's reasonable. Personally I never watch video on my iPod, but do on my Mac.

    Depends on volumes of purchasers and the number of videos. You'll run out of disk space on most shared plans fairly quickly with video, and if you get a fair number of people buying then the bandwidth comes into play.

    Would there be previews or free clips? They'll have a completely different bandwidth profile from the full videos - it's quite likely a 30 second free clip could use more bandwidth than the 30 minute purchased full version.

    Do you know how authentication is handed on the purchased videos? i.e. how the downloads are restricted to only those who purchased it. It may be possible to split the site into the web pages and the video content, with the video content being hosted on a specialised service.
     
  4. nightelf macrumors 6502

    Joined:
    Mar 25, 2003
    #4
    - Does it have traffic? Have you checked yourself the numbers?

    There are sites like URLtrends.com, and Alexa.com that will tell you how many visitors per month, etc. Do not trust what the seller tell you. Things like hits are misleading because there are several hits per visitor depending how many images, css, etc a single page has.

    - Are you a web developer or know how to maintain a site?

    If not, you are not only dependent on the guy that does the content, but also in the person that will code the site. If you decide to buy the site, try to learn HTML, PHP, etc so you can know what things can be done and what they are worth, or do it yourself.

    - I do not think is a good idea to start or buy a business hoping to sell it later. Is no the same as doing something you like.

    - Shared hosting will probably not be enough. You could start with a shared hosting for the site, and host the videos with a company like ASmallOrange.com that offer packages with no PHP & control panel, but more storage and bandwidth.
     
  5. NoNameBrand macrumors 6502

    Joined:
    Nov 17, 2005
    Location:
    Halifax, Canada
    #5
  6. Makosuke macrumors 603

    Joined:
    Aug 15, 2001
    Location:
    The Cool Part of CA, USA
    #6
    I'm with NoNameBrand--this business plan screams "Dreamhost Files Forever". it's exactly the sort of thing that service was created for--with the only "gotcha" being you have to be willing to have the content without DRM.

    If there are no previews/trailers, then the "shopping" end could easily be hosted on a shared plan--no issues. If you've got to handle the bandwidth of trailers, then you're still looking at a significant expense and probably a dedicated server, and it's a more risky proposition.

    The advantage of File Forever, of course, is that you only pay for the content that sells--the long-term storage and download costs are free and entirely dependent on actually selling stuff, respectively. Beats paying a lot for bandwidth that you won't need unless stuff sells.

    Amazon's S3 service is another to consider, since you're paying for "as you go" bandwidth and storage rather than upfront.

    Personally, I probably wouldn't take the risk on something like this--the internet is littered with corpses of businesses of the sort that have failed, and if it's going to work it's going to take a whole hell of a lot of work so it'd better be something you REALLY want to do. Unless it's "dump it on Files Forever and ignore it unless it starts making money"--no previews and minimal hosting costs for the frontend, so you're only making money. In that case, I suppose if it's cheap to buy the business it might be worth a shot.
     

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