How Elmo and weed can make you wealthy
Marc Anthony Rosa | Monday, January 30, 2012
Since the birth of the Internet, many a person has sought to capitalize upon the web’s infinite potential. Many have succeeded, but countless more have failed, succumbing to the economic difficulties that arise from an Internet that changes ‘business as usual’ in every single respect.
Even up to this day, the Internet is still an extremely difficult place to make money. Sure, there are quite successful businesses, the likes of Googles, Facebooks and, as I just discovered from a short list of dot-com bubble survivors, Stamps.com. But the fact is that banner advertisement revenues only sustain companies so far, freemium models have a notoriously low revenue conversion rate and despite Average Joe’s wallet stacked next to his computer, it’s dental surgery to generate a sale from him. On any given day, we’ll take a trip to our friendly Wal-mart and smack down $18 on a NERF dart gun (a gloriously true story for me) impulsively, but we’ll be concrete resistant to spending more than a dollar on a smartphone app that we’ll use forever. We treat spending money on the Internet in the same manner that we treat talking to telemarketers.
Despite the difficulties that businesses have experienced from making money on the Internet, there is one smidgen of hope that I’d love to share. And, most impressively, the face of this beautiful financial machine that I’m about to share was represented by a picture of Elmo smoking weed.
Backstory. Remember last summer when our favorite online DVD company, Netflix, made a very real decision about how it will handle its movie streaming and DVD shipment businesses? CEO Reed Hastings took a step to separate the streaming and DVD services from each other, navigating the company toward what he perceives as the future (online streaming) and prevent DVD shipments from slowing him down. For a while, Netflix carried forward with the streaming arm and the newly-created company Qwikster would provide DVDs via mail to users.
Less than a month later, the company completely reversed its decisions. That’s not the important part. What is important is that Netflix made another terrible decision, unrelated to the business model.
One of the most important things for companies to consider is how social media will affect their brand. And one of the most important things for companies to do before announcing branding decisions is to snag social media assets ahead of time, before some clever person comes along, picks up the Twitter user name (for example) and demands a boatload of cash for it. Or even worse, if some random kid had it all along.
But that’s exactly what happened. Jason Castillo, the owner of the Twitter handle “@Qwikster,” went to bed one night with a handful of friends, and woke up in the morning with thousands of followers and messages in his Twitter inbox. Here’s an ordinary guy who live-tweets his mundane soccer practices and thought a picture of Elmo smoking weed would be the funniest picture to put as his Twitter avatar. But, little did he know mega-corp Netflix decided to spin off a brand new company and give it the name of his beloved Twitter account. I saw this when it happened and followed Jason on Twitter, because his posts are hilarious and against everything Netflix would want to stand for.
Before Netflix reversed its decision, this dude stood to make a ton of money from owning his Twitter account, even if valuable translates to just $10,000. Qwikster wanted to own the Twitter handle @Qwikster instead of something untaken like @Qwiks592838zz, for the same exact reasons someone would want to buy www.toast.com instead ofwww.ILikeBreadHeatedByRedHotIronRods.com. Brand is everything, especially to goliath companies like Netflix or Qwikster. With tens of millions of customers, having that domain name or, yes, the exact name of your brand on Twitter translates to professionalism and competency to consumers; not having these assets, or worse, confusing customers with a soccer-playing kid named Jason represented by a picture of Elmo smoking a blunt translates to some serious negative effects.
The signs showed that the planets were aligning for this to happen, too: Twitter has a clear policy against selling Twitter handles and will shut down anyone who shows signs of doing so. Quite coincidentally, Jason Castillo quietly removed every single Tweet about selling his account, replaced his profile picture, and had resorted to less-outrageous posts about making tacos.
Innovative and promising companies have lost billions of dollars from the Internet. But, there are people like Jason all over the world who stand to make tens of thousands — if not hundreds of thousands of dollars — from the very same Internet. In this case, Netflix made a premature press release decision, and Jason at one point stood to benefit tremendously because the company’s new name was then aired publically. While the venturing Internet entrepreneur you are may one day completely fail at generating a dime for a reasonably useful service, rest assured that a man with a picture of Elmo smoking weed may have gotten paid hundreds of thousands of dollars from Netflix for a Twitter account that took him 3 minutes to set up.
Marc Anthony Rosa is a senior management entrepreneurship major. He can be reached at firstname.lastname@example.org
The views expressed in this column are those of the author and not necessarily those of The Observer.