Hi5 Adds Another Revenue Stream—Downloadable Games From RealNetworks

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Hi5 Adds Another Revenue Stream—Downloadable Games From RealNetworks

Struggling social network Hi5 has launched a downloadable games portal in conjunction with RealNetworks, adding over 1,500 new titles to the games section it built out earlier this year. These aren’t just casual games; the roster includes best-sellers like GTA: IV and Gears of War, the majority of which will be for purchase only.

This fits right in line with Hi5’s recent push to bulk up its virtual goods platform through a deal with Mochi Media—as the social network is trying to generate a greater proportion of its revenue from members, as opposed to advertisers. Two months ago it brought in Bill Gossman—formerly executive in residence at its biggest investor, Mohr Davidow Ventures—to help lead the shift in business models as CEO. Release.

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Tameka Kee

@GeekyChic Jul 14, 2009 4:38 PM ET

Posted In: Entertainment, Gaming, Social Media, Companies, RealNetworks, hi5

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Shane Lundy

Social media is in need of finding a sustainable business model. Though providing entertainment to its community of users that leverages a proven business model is interesting, it does not ultimately move the needle. Social media will forever be free to the consumer, making the advertiser the most important constituent in the ecosystem. The question that the social media giants should be asking is, why can't we be profitable with an ad supported model? The answer is simple, however quite painful to hear. The current advertising model for social media does not work well enough for the advertiser, therefore it does not warrant high enough CPM's to achieve profitability.

You must address the root cause of the issue. Consumers simply ignore display advertising that is alongside content. the higher the engagement the site is, the worse the ads perform. TV ads work better because they occupy the entire screen at tolerable intervals. With that said, there is still too much media waste because of poor targeting. We know that much is being done around behavioral targeting however the privacy concerns have not yet been resolved.

Ok…this may seem self serving, but I am really talking about disrupting this flawed model and my company, SponsorSelect has a solution. We know that a self targeted advertising will ultimately be a significant percentage of the advertising dollars spent online and via TV and as the pioneer in this space we hope to maintain our position as the category leader. We call it On-Demand advertising.

SponsorSelect is a premium ad network that is reinventing behavioral targeting. Built atop a robust ad server that has already been deployed with numerous publishers, SponsorSelect allows Internet users to choose the advertising they wish to see. By allowing users to self-select advertising, SponsorSelect delivers performance without privacy concerns. When advertising is more relevant and performs better for advertisers, publishers make more money and can provide better content and services to users for free. SponsorSelect targets nine verticals: casual games, multimedia, social networking, ISP, humor, news, music, email and lifestyles.

We would love to add another revenue stream for Hi5 and all the social media giants. Progress is being made and I hope this helps push the bolder further up the hill.

Regards,
Shane Lundy
President & CEO
SponsorSelect Inc.