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.
