New Age entrepreneur
Shelly Palmer's Sweet16.com plans to start with a Web site and end up everywhere else
By Don West -- Broadcasting & Cable, 8/27/2000 8:00:00 PM
Founder and CEO Shelly Palmer named his new venture Sweet16.com Intermedia for a reason. Its Internet Web site is job one, but TV, radio, magazine, broadband, wireless, retail, e-commerce and special events are not far behind. All in pursuit of a demographic he considers widely underserved: 12- to 17-year-old girls.
"They've grown up when the whole world is digital," Palmer says, adding that-with their male counterparts-the age group now numbers 20 million, with 32 million in sight by 2010. Sweet16.com hopes to have 11% of them in year one and 16% to 18% by year three. "The goal is to reach them where they are," he says. "They're empowered to talk to us on the Internet; we're empowered to talk to them through radio, television and print and then to speak with them in preference-based broadband or wireless." He anticipates it will be a business with annual revenues of $50 million to $60 million, and says it will break into the black-if modestly-in the first year.
The star of the venture is teen idol Britney Spears, who's also a major investor. She is featured on the site and on the first issue of Sweet16.com magazine, a joint venture with Fans Inc. that broke into print this month with 500,000 newsstand copies. Spears will also appear on Sweet16.com Dance Party, a 24/7 TV version timed for fall 2001-"an American Bandstand" for the next millennium, according to Palmer-and a two-hour-weekly radio series titled Sweet16.com Dance Mix.
"There are all kinds of demographics, but there's no such thing as a 12- to 17-year-old," says Palmer. "We joke at Sweet16.com that the only things 12-year-olds and 17-year-olds have in common are music and shoes. A 12-year-old girl is just entering puberty. A 17-year-old girl has other issues that have to do with young adulthood. What the Internet empowers us to do is to divide them up appropriately, to program for them specifically and serve them in a way that's never been possible before. They can talk to us, we can talk to them. And they can be brutal or dispassionate about their likes and dislikes, and we can know about them instantly."
Date-of-birth registrations determine the level of program maturity a Sweet16 consumer receives-preteen, 13-16, 16 plus or general. "The top of our bell curve is about 171/2," Palmer says. "We pick them up as early as 9; you see a hockey stick at about 14, then it trends upward. There's a cliff at 24, and they're gone." At last count, page views were 5 million a month, with as many as 200,000 visitors an hour.
The hardest part, in Palmer's view, is dividing up content in a way that makes it true to each of the media individually, so that each leaves you saying, "I am emotionally satisfied by reading the magazine," "I'm emotionally satisfied by listening to the radio show," "I'm emotionally satisfied by going through the Web site." At the same time, the Sweet16.com audience "doesn't want to just be promo'd," he says. "This generation of children hates to be sold. There's a huge requirement to value-add. They need something of value, but not the talking about it."
The retail initiative will establish Sweet16 "outpost" shops inside department stores or mass-merchandise retailers, all joint ventures. There is also an e-commerce model on the Web site. "We sell two ways, and one way beats the heck out of the other," says Palmer. "One is our gift registry and shopping mall, and that is traditional, with the top-16 or Sweet 16 items in a couple of dozen categories. That works because kids from 12 to 17 actually believe there is a best of something: There's a best car, a best shirt, a best pair of shoes. And the kids tend to believe us because they see their friends, their cool friends, wearing that stuff.
"What really works is when you're perusing our site and you see Britney Spears in a twin set and it's got a little 'add to wish list' button, and they decide, 'Oh, my gosh, if Britney Spears has it, I've got to wear it, too.' The contextual selling always outsells the pure mall selling, probably three to one. It's astounding. If they're involved in the story, they'll be involved in the sale."
Sweet16.com has four revenue streams: traditional first-impression advertising, e-commerce, transactional revenue from taking small pieces of deals between specific vendors and foreign-rights distribution. The site and magazine are currently being translated into German, and Palmer has identified nine languages in 18 countries in which to do business and says, "We are way down the path in half of those."
The Sweet16.com intermedia venture is an Internet-generation phenomenon, says Palmer. "Back 15 or 20 years ago, it wouldn't have been empowered by the technology. But more importantly, it was generationally out of vogue. We're living in a time with abject prosperity, and this is an affluent group. More importantly, this is the smartest group of 12- to 17-year-olds ever born on planet Earth. You get 9-year-olds typing 35 words a minute with 104 people on their AOL Buddy List and another 104 on their IM Buddy List.
As much as he wants to cross-ruff his media, Palmer means for each to stand alone. "We are trying as hard as we can to use the Internet as the Internet, to use radio as radio, print as print, and tie them all together. Where I think broadband is going to become very powerful for us is in modular applications: the ability to create preference-based television shows that you watch when you want to watch. So you might say on a pick list that you're interested in farming, gardening,' NSync and a funny-colored hair dye, and it will create a television show for you based on those segments. We're too much in the infancy of broadband to make a huge thing out of that right now."
While Palmer is enthusiastic about change, he's realistic about its pace. "Technological change is not broad and vastly sweeping," he says. "The bleeding edge of technology is just that-the bleeding edge. You can't solve an acoustic problem with an electronic solution-that's an old sound guy's phrase [Palmer spent 21 years producing musical commercials]. Your speakers have to be in the right place. It doesn't matter how powerful they are, you've got to put them in the right place. It's true here. I think we're a long way from everybody having this technology. Everybody has a TV set, everybody has a telephone. Everybody does not have a wireless phone, everybody does not have a PDA, everybody does not really have a fast broadband connection. I think that's really important.
"The people that do have them are our audience right now," Palmer says. "If you want to reach 20 million people a week, there's Sweet 16.com."
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