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.

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