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

<p>Alive Networks' death certificate will probably list a funding crunch as </p><p>the cause of its sudden demise, but there is a strong belief that the </p><p>company's new economy build-it-big-and-fast mentality hastened its </p><p>downfall. </p><p><BR><BR> </p><p>It was just seven months ago at its launch that key executives spoke of </p><p>Alive's grand ambition to become Asia's first 24-hour satellite </p><p>television channel on Asia-Sat3, offering travel and learning content to </p><p>viewers across Asia. </p><p><BR><BR> </p><p>If the vision was grandiose, it was no doubt fuelled by the zeroes in </p><p>the region's travel spend. </p><p><BR><BR> </p><p>A USdollars 500 billion industry at the moment, the regional travel </p><p>market is forecast to double in size by 2010. </p><p><BR><BR> </p><p>What had also been bandied about were figures on government and capital </p><p>investment in the industry. These had been tipped to hit dollars 56.5 </p><p>billion and dollars 461 billion respectively by 2010. </p><p><BR><BR> </p><p>As far as Alive was concerned, the increased frequency and spend on </p><p>travel by regional consumers would make traditional methods of meeting </p><p>their demands for travel obsolete in the new century.It bullishly banked </p><p>on increased capital investment translating into buoyant adspend for its </p><p>multimedia platforms. </p><p><BR><BR> </p><p>Alive's plan was to deliver high-quality television programming for its </p><p>travel and learning market niche. Almost simultaneously, the company </p><p>also intended to roll out its internet, mobile and print services, </p><p>creating much hyped convergence across its various media platforms to </p><p>sell travel. </p><p><BR><BR> </p><p>Television content would be sourced from programme suppliers around the </p><p>world. It was also looking to produce local shows such as The Alive </p><p>Travel Show, which was envisaged as its signature show with a mix of </p><p>features and news. </p><p><BR><BR> </p><p>"Our mission is to inspire and guide our customers to new and more </p><p>rewarding travel experiences," said Alive's chief brand officer James </p><p>Stuart, just after its launch. </p><p><BR><BR> </p><p>On the nuts and bolts side of the business, Alive had also established a </p><p>travel retail and toll-free sales operation in Hong Kong. A retail </p><p>presence was deemed necessary given consumer reluctance to book online. </p><p>Travel consultants had been hired, an operating licence procured and a </p><p>travel distribution service, Galileo, installed before the plug was </p><p>pulled. Had Alive secured funding, the travel centre would have operated </p><p>from as early as 8am to as late as 11pm daily. </p><p><BR><BR> </p><p>An executive at Alive said the company envisioned itself as "a </p><p>higher-end version of the UK's cheap and cheesy TV Travel Shop". </p><p><BR><BR> </p><p>To breathe life to his grand convergence vision, Alive founder and chief </p><p>executive, Ian Henry, assembled a team of heavy hitters. But the depth </p><p>of experience Henry brought on board came at a heavy price. Sources </p><p>believe attractive remuneration packages contributed to the higher than </p><p>expected burn rate. The start-up was said to have haemorrhaged about </p><p>USdollars 1 million a month. </p><p><BR><BR> </p><p>Among the heavy hitters on the team were the former deputy executive </p><p>director of the Hong Kong Tourist Association, Douglas Gautier, as chief </p><p>operating officer; Ann Tsang, who had worked with several broadcasters, </p><p>as director of marketing; and Ian Stewart, the ex-general manager of </p><p>global travel trade distribution system Amadeus, as director of travel </p><p>services. </p><p><BR><BR> </p><p>Henry himself had been one of Hong Kong's internet pioneers, helping to </p><p>launch chinadotcom and steer it towards its Nasdaq listing in New </p><p>York. </p><p><BR><BR> </p><p>That was the plan. The reality was starkly different. Within three </p><p>months of its launch, speculation surfaced that Alive was facing a </p><p>serious funding crunch, although staff had been assured at the time of </p><p>their hire that the start-up had a cash stockpile to last three </p><p>years. </p><p><BR><BR> </p><p>Former Alive executives said the company was a "month away from </p><p>realising the business model of converging its TV and online </p><p>offering". </p><p><BR><BR> </p><p>Financing wasn't its only problem. Alive also faced huge marketing and </p><p>positioning issues; not to mention the immense challenge of entering the </p><p>competitive regional television arena as a start-up. As media observers </p><p>have noted, start-ups are for the internet, while the television </p><p>business is for established media companies that are expanding into the </p><p>medium or which have the cash and strengths already acquired from </p><p>another medium. </p><p><BR><BR> </p><p>Like most start-ups, distribution deals initially proved elusive. At the </p><p>time of its demise, the company had just three deals in place in </p><p>Indonesia, the Philippines and Taiwan. </p><p><BR><BR> </p><p>But in competing for eyeballs, it faced stiff competition from </p><p>established contenders like Discovery and National Geographic. </p><p><BR><BR> </p><p>Despite its multimedia platform, Alive insisted it was first and </p><p>foremost a travel company. But the retail travel business is already </p><p>hyper competitive and margins are being squeezed thinner by the day as </p><p>travel suppliers move to cap commissions. </p><p><BR><BR> </p><p>Being a middle man at a time when the internet has threatened to drive </p><p>such roles on the endangered list may have been Alive's first and - as </p><p>it turned out - fatal miscalaculation. </p><p><BR><BR> </p>