The masses of gamblers hunched in front of slot machines provided Pixelon.com, which hopes to hit the jackpot by bringing television-quality video to the Net, with a potent reminder: Las Vegas is where suckers go to strike it big.
That didn't stop the 3-year-old startup from coming to town to throw itself a grand-opening party Oct. 29 that featured performances by such glittering acts as the Who, Kiss, Brian Setzer, Tony Bennett and the Dixie Chicks. The San Juan Capistrano, Calif., firm, which has raised $23 million, insisted the $10 million launch party made perfect sense.
"This space is a horse race," Michael Fenne, the company's founder and chairman, says. "You're either fast and big or you're dead." Fenne, a 31-year-old former concert roadie turned computer programmer, won't get any arguments there. With no leaders in the market for online broadcasting, it is still up for grabs. And there are some pretty heavy hitters vying with Pixelon, including Yahoo (YHOO)/Broadcast.com, Viacom (VIA)/CBS (dossier) and Walt Disney/ ABC (dossier). There's also a lot at stake: The difference in revenues between being No. 1 and No. 2 could be enormous.
Pixelon plans to become an online content factory, serving up 50,000 channels. "Since we're not a Time Warner (TWTC) with a content library a mile long, we had to be skilled ... in our execution," Fenne says. For the fortune it has paid, the company has secured exclusive rights to the performances - do we see Kiss, Who and Dixie Chicks channels in the offing?
Parties like Pixelon's iBash are meant to generate enormous buzz because, in the Internet Economy, "there is a close relationship between market buzz and market valuation," notes Anthony Tjan, executive VP of Zefer, which helps Net companies build brand identities. He points to HotJobs.com, which last winter spent $2 million, or half its annual revenues, to advertise during the Super Bowl broadcast. Widely criticized as excessive at the time, the move is credited with allowing HotJobs to successfully build brand identity.
By spending nearly half its war chest on a single event, Pixelon has taken a big gamble. With dot-coms regularly spending $100 million on ad campaigns, it's unclear how a single party can rise above the noise.
But for one night, Pixelon was the center of attention - at least for tens of thousands of Net types, tourists and teenagers who gathered at the MGM Grand (MGG). But on the Web simulcast, where arguably the event really mattered, the evening didn't go entirely smoothly. Pete Townsend's trademark windmill riffs and Kiss' dazzling pyrotechnics were hardly in evidence; the site frequently served up cryptic error messages and broken links. The site also failed to live up to its promise to begin making the video archives available by Nov. 4.
The concert may demonstrate that Pixelon is serious about broadcasting content with mass appeal on the Net. But it'll take more than a star-studded event to raise the company above the competition. Nowhere in the tech world have there been more unfulfilled promises than in the realm of next-generation television. Buzz is nice, but Pixelon not only has to fight off the heavyweight competition, it has to deliver superior technology.
