ANALYSIS: Convergence dealt blow by Alive's untimely death - The demise of Alive has stunned internet players and broadcasters alike, but what really caused it to collapse? Sharon Desker Shaw invest

Alive Networks' death certificate will probably list a funding crunch as

the cause of its sudden demise, but there is a strong belief that the

company's new economy build-it-big-and-fast mentality hastened its

downfall.

It was just seven months ago at its launch that key executives spoke of

Alive's grand ambition to become Asia's first 24-hour satellite

television channel on Asia-Sat3, offering travel and learning content to

viewers across Asia.

If the vision was grandiose, it was no doubt fuelled by the zeroes in

the region's travel spend.

A USdollars 500 billion industry at the moment, the regional travel

market is forecast to double in size by 2010.

What had also been bandied about were figures on government and capital

investment in the industry. These had been tipped to hit dollars 56.5

billion and dollars 461 billion respectively by 2010.

As far as Alive was concerned, the increased frequency and spend on

travel by regional consumers would make traditional methods of meeting

their demands for travel obsolete in the new century.It bullishly banked

on increased capital investment translating into buoyant adspend for its

multimedia platforms.

Alive's plan was to deliver high-quality television programming for its

travel and learning market niche. Almost simultaneously, the company

also intended to roll out its internet, mobile and print services,

creating much hyped convergence across its various media platforms to

sell travel.

Television content would be sourced from programme suppliers around the

world. It was also looking to produce local shows such as The Alive

Travel Show, which was envisaged as its signature show with a mix of

features and news.

"Our mission is to inspire and guide our customers to new and more

rewarding travel experiences," said Alive's chief brand officer James

Stuart, just after its launch.

On the nuts and bolts side of the business, Alive had also established a

travel retail and toll-free sales operation in Hong Kong. A retail

presence was deemed necessary given consumer reluctance to book online.

Travel consultants had been hired, an operating licence procured and a

travel distribution service, Galileo, installed before the plug was

pulled. Had Alive secured funding, the travel centre would have operated

from as early as 8am to as late as 11pm daily.

An executive at Alive said the company envisioned itself as "a

higher-end version of the UK's cheap and cheesy TV Travel Shop".

To breathe life to his grand convergence vision, Alive founder and chief

executive, Ian Henry, assembled a team of heavy hitters. But the depth

of experience Henry brought on board came at a heavy price. Sources

believe attractive remuneration packages contributed to the higher than

expected burn rate. The start-up was said to have haemorrhaged about

USdollars 1 million a month.

Among the heavy hitters on the team were the former deputy executive

director of the Hong Kong Tourist Association, Douglas Gautier, as chief

operating officer; Ann Tsang, who had worked with several broadcasters,

as director of marketing; and Ian Stewart, the ex-general manager of

global travel trade distribution system Amadeus, as director of travel

services.

Henry himself had been one of Hong Kong's internet pioneers, helping to

launch chinadotcom and steer it towards its Nasdaq listing in New

York.

That was the plan. The reality was starkly different. Within three

months of its launch, speculation surfaced that Alive was facing a

serious funding crunch, although staff had been assured at the time of

their hire that the start-up had a cash stockpile to last three

years.

Former Alive executives said the company was a "month away from

realising the business model of converging its TV and online

offering".

Financing wasn't its only problem. Alive also faced huge marketing and

positioning issues; not to mention the immense challenge of entering the

competitive regional television arena as a start-up. As media observers

have noted, start-ups are for the internet, while the television

business is for established media companies that are expanding into the

medium or which have the cash and strengths already acquired from

another medium.

Like most start-ups, distribution deals initially proved elusive. At the

time of its demise, the company had just three deals in place in

Indonesia, the Philippines and Taiwan.

But in competing for eyeballs, it faced stiff competition from

established contenders like Discovery and National Geographic.

Despite its multimedia platform, Alive insisted it was first and

foremost a travel company. But the retail travel business is already

hyper competitive and margins are being squeezed thinner by the day as

travel suppliers move to cap commissions.

Being a middle man at a time when the internet has threatened to drive

such roles on the endangered list may have been Alive's first and - as

it turned out - fatal miscalaculation.