Business Model Focus: Finding the Right Path to Profitability

Culture Shock

Indeed, not everyone will survive. Inherent challenges remain with an ever-changing business model, and not just in the chase for profitability. Company culture, once established, is an important tool for employee retention and motivation. The transformation of a company culture from B2C to B2B can be hard on employees – and even harder on management.

"It’s been very, very tough," admits Spike Radio’s Farr, of keeping his employees motivated. "We’ve all grayed a bit premature. But this is an entrepreneurial environment and we need to maintain a high morale." Farr says the foosball table and unlimited soda are gone, but the greatest motivation for his employees is "to be a part of something successful and … to have a job." Oh, that.

When Myplay, a music services provider, announced it was concentrating solely on the B2B market in February, it also simultaneously announced the layoff of 41 percent of its staff. It closed the ad sales and consumer marketing divisions, and reduced its public relations staff in an effort to reduce its cash burn rate and conserve funding.Clearly, maintaining cash in the bank is paramount for survival, as is the ability to be flexible, says Steve Vonder Haar, senior analyst with The Yankee Group. "We’re in the early stages of a fast-moving market that rewards companies that are nimble – that recognize new opportunities – and will penalize those that don’t."

From Consumer to the Enterprise

Heeding such warnings are a new set of streaming media players formerly dedicated to the consumer market and newly enamored of the business side of things – specifically, the corporate enterprise level. Companies such as TheFeedRoom, Audible, AudioBasket and MeTV have started new enterprise campaigns, offering various technology and content solutions for streaming within corporate networks.

Launched last August with a hefty $30 million, TheFeedRoom has partnered with some 35 local television stations to rebroadcast its news feeds online. Jon Klein, chief executive officer and former executive for CBS’ 60 Minutes, sees the race for domination of the narrowband market as being long over ("Yahoo! won," he says). But broadband is just at the starting gates and the future looks promising. "Everything that is currently done on the Web, will eventually be done in multimedia," says Klein.

Because Klein believes that corporate customers will be the first adopters, TheFeedRoom is offering its turnkey streaming video services to the enterprise market. While he points to "talks underway with a number of Fortune 500 customers," Klein is unable to name a specific customer just yet. Still, Klein is hedging his bets, expecting enterprise customers to comprise 40 percent of TheFeedRoom’s revenue stream by the end of the year.

Audible, on the other hand, does have enterprise customers lined up but, at press time, was unable to mention them by name. Audible provides spoken audio for download or playback on personal computers or other portable devices. It has over 28,000 hours of programming from 160 content partners. And it should be noted that in February, Microsoft pumped $10 million into the company.

For Audible, the mobile delivery of streaming audio to field reps, sales teams, and executives on-the-go is an intriguing and potentially viable enterprise business model. "When a company evaluates the mobility patterns of their employees and adds audio messaging, it’s a very new idea that fundamentally makes sense," says Matt Fine, senior vice president of enterprise sales with Audible. Fine plans to market Audible’s wireless communication capabilities to tech-savvy, multi-tiered companies in the financial and healthcare sectors.

Another aurally oriented streaming company, AudioBasket, has also made waves in the enterprise realm. With some 20 partners, including Office.com and Homestead.com, AudioBasket has expanded on its offerings by providing customized versions of its services to client affiliates. When a user goes to an affiliate Web site, AudioBasket bundles personalized news feeds for the user.