FAQs - Answers to Questions Some Have Asked

Q. You do have a fine e-zine, but I have some questions and concerns. All of your writers submit their stories voluntarily and without pay. Iacta has gathered the information to sell about WebTV subscribers for free from the WebTV firewalled newsgroups. You have several pay per click advertisers. It just seems strange with all the free input you use for the publication and very low operating costs due to the volunteer articles you recieve, that why now are you having trouble? Have the volunteer writers of Net4TV began charging for their articles? Has WebTV tried to find out the problem with the pay per click ads that aen't working? That is something they and you should be concentrating on. When and if WebTV answers as to why the pay per clicks don't work, it would be something that very many other website owners would be interested in, especially those of us with pay per click ads on our web pages. You mention several times that even after you recieve the money, you may still close down. To me, that is a prerquisite for saying you'll take the money but are free and clear to use it however you see fit should it not be used for the matter in which it was donated. In case that you do not use the funds for it's intended purpose, will there be refunds forthcoming to your benefactors? Afterall, this is a bid to save an e-zine, not to enrich the owners personally. Until these questions are answered, myself and many others must act on the side of caution at sending you funds.

Dudette's Answer

1. Why We Said "We Still May Not Make It." We have been offered donations from time to time in the past. While the offers meant a lot to us, we have never accepted them until now. When some of our writers understood that we were probably going to close, they told other people who flooded us with email telling us that we couldn't leave, and offering donations. The messages made us feel that we meant a lot to some people, and the offer of donations made us realize that it might be possible to keep Net4TV live, even though we would not be able to maintain a weekly publishing schedule. So we decided to give it a try.

But despite the best wishes of our friends, we simply don't know if it will be enough because we don't know how many people want to make a donation, or how many can, or how much they'll be able to spare. If enough people want us to be here, we will. If they don't, we won't. It's that simple. When we tell you we still may not make it, it's not because we're not going to try. It's because it's the truth -- we don't know.

We are applying all of the donations that we receive to the basic costs of keeping Net4TV live on the Net: the bandwidth connections and server maintenance, the power bill, and the office rent. We are dropping one of our T-1 lines and half of our office space, but our contract and lease aren't up until the end of June. We have laid off all of our staff... some of them are still working on Net4TV and Net4TV Voice, but all on a volunteer basis while they look for paying jobs. If we don't make it, there won't be any money to refund because we will have spent it making it as long as we can and trying to set up something so that the "evergreen" portions that a lot of people enjoy remain available online.

All of the people here were Net4TV -- not Iacta -- employees. When Iacta sold a professional job, if it required work other than my own, Iacta would contract with Net4TV to do it. All of the money that came into Iacta for any purpose went to pay for Net4TV.

Net4TV truly has been a labor of love -- and certainly not a labor for money, although we hoped to make money on it some day. In terms of the work that we've done as Iacta, probably 85-90% of it could have been done just as well (and with a lot fewer people) if we had never even started Net4TV, and we would have been a lot better off financially. If we were looking for personal enrichment from this, we would take what we have left and use it for our Iacta business alone, and get our nights and weekends back in the process.

We sell a major report called Lessons Learned From WebTV to the cable industry. It contains the same information that you see in my writing and analyses in Net4TV Voice: what WebTV has done correctly, where they have failed, where the market is, and what WebTV users say they want. It also includes analyses of polls like the WebTV Report Card that we have run now for three years, but we always publish them first in Net4TV Voice.

The report also contains in-depth discussions of technical issues related to thin-client browsers and service designs. We haven't published those in Net4TV Voice because, frankly, it wouldn't tell any WebTV subscriber what they don't already know about how the service is designed, how it operates, the successful areas, and the current problems. What the cable companies buy the report for is the presentation of this in an organized, useful handbook, and our analysis of how to design their own iTV services to deliver an experience that their users will find pleasing and will want to use. By the way, "collecting for free" does not make products like this report free to us. Each report takes over 3 months to write and publish -- after we know what we're going to say -- and they run well over 100 pages.

Reports are not our primary business, and we only issue them every couple of years. Our primary work is service design. We have created the community design for a well-known e-commerce site, designed the electronic program guide for a cable service, and have licensed games and proprietary server software to other companies in the iTV industry. We also have provided focus groups facilitation and moderating for market research companies (their panelists, not our users), evaluated browsers for set-top box companies, and produced the interactive version of a TV documentary. ITV has been my career for more than 16 years -- it did not begin with Net4TV or with WebTV.

3. The Costs of Net4TV. First, Net4TV Voice may be the only part of Net4TV with which you are familiar, but it is not all that we do. Our games actually get much more traffic than our magazine. Image Magick is a server-based image editing program that we have hosted for three years. We host a WebTV friendly chat with a proxy server that allows nick changing, and provide RealAudio audio chat shows in both WebTV 2.5 and prior formats. To do all of this, we have been running 11 servers and two T-1 connections. We could run Iacta's entire business on two servers, one of which would be a co-located web/mail server, and the other our file server with a DSL connection, with a total connection cost of less than $400 per month -- rather than the $2,500 a month in connectivity (plus power bills, plus office to house the servers) that we incur because of Net4TV. Bandwidth ISN'T free -- especially when you're serving out over 50 Gigabytes a month and serving 130,000+ unique people with 1-million-plus page views.

The Community section and some of the Features of Net4TV Voice are written by volunteer writers, and VoxPop is general submissions and email from our users. All of the news, many of the features, and all of the graphics, editing, and programming necessary to publish the magazine have been done by paid staff. Until recently, there were three full-time paid staff members who were assigned to exclusively to Net4TV Voice and a number of others working part-time.

As a webmaster, I am sure that you realize that quality ezines meeting a regular publishing schedule do not publish themselves, no matter how many volunteers you have submitting content. In fact, one person was full time as a programmer, creating the infrastructure that had allowed us to publish over 3,700 articles with such a tiny staff over 3 years, while another spent a good portion of his time (when he wasn't running Chat4TV) keeping the servers and computers functioning. The biggest cost, always, has been people. As much as they may have loved their work, they had to pay their rent and feed their families.

4. Advertising. We do not have any clickthrough advertising, and there isn't much of that around anymore, anyway -- I'm not sure where you're getting yours. Even when it was, it wouldn't have worked for us to simply use ads like DoubleClick -- many of the sites they led to don't work on WebTV, and WebTV users aren't a good market for Cisco routers or Compaq servers, anyway.

Instead, all of the advertising is "pay for performance" -- that is, we are supposed to receive a commission if someone clicks through and either makes a purchase, or signs up for a service the ad offers. These are called "affilate programs." We select each program carefully to make sure that it is a reliable outfit offering a service that some of our users will find valuable, that it is WebTV-compatible, that it has an adequate privacy policy, and that it is legal. We will not run casino ads because gambling for real money across state lines is a Federal crime. We will not run ads for porn. We will not run ads for multi-level marketing programs because they are mostly scams.

The two of the major affiliate brokers, plus some others, do not properly track purchases and signups made with a WebTV. We have been dealing on this issue for more than a year, have extensive documentation including a number of test shops, and neither WebTV nor the affiliate brokers have been willing to address the issue at all. We have determined that, in at least the case of one merchant that we have verified, the merchant has been paying the broker but, because the referring site information is disconnected, the broker keeps the entire amount. We suspect that we have just seen the tip of the iceberg, and are asking the FTC to open an investigation in affiliate programs.

WebTV has been aware of its cookie problems for years -- if you read the WebTV developer boards, complaints and problems in WebTV cookie handling of third-party domains go back almost to the boards' beginning in 1998. Expecting WebTV to suddenly care about this today is not dealing in reality. It would be nice if they did, but at present, their cookies are failing across the board and they do not even seem to be able to fix the basic handling that lets people into sites where they have registered. Fixing problems that don't directly affect them is not high on their priority list.

5. Why the Advertising Failure was the Killer. About two years ago, we realized that there was potential for Net4TV to become a "property" in its own right. We could not afford to continue it out of Iacta as it was. We were paying staff from our work at Iacta but they weren't bringing in any money -- all they were working on was Net4TV. We developed a business plan to make Net4TV the site that would provide set-top box users with all kinds of services that we knew we could provide, and that their service providers (or boxes) wouldn't, and we set up Net4TV as its own company.

We did not expect the advertising to pay the bills for Net4TV -- yet. But we did expect it to do it some day, along with some of the other services that were in development. Our business model called for us to grow to the point that, by 2004, we would be receiving an average of $1.75 every 90 days per unique user based on the combination of advertising, transactions, and value-added services. Since we have always planned to serve all set-top box users, we saw the coming of cable-based iTV, AOLTV, and other TV-based browsers as a growing market, even though it wasn't much now. Based on this business plan, we were able to raise some small amount from individual investors, and turned all of our work and assigned our staff to Net4TV. We didn't raise traditional VC because we weren't interested in a "get funded, go public, cash out" strategy; our big market for iTV was still some years away, and we wanted to create something valuable beyond just a fast IPO. In retrospect, that was the right thing to do: we would have already been dead had we raised money from VCs, even if (especially if) we had raised millions.

The failure of the system to work with the transaction tracking to give us revenue that we had earned -- especially when it dropped virtually to zero as WebTV's cookies failed totally -- was the final killer because it totally invalidated a key part of our business model. Our last investor pulled out. We faced reality and recognized that we would not be able to continue devoting most of our efforts to Net4TV. We had begin the work to take it down and go back to consulting as Iacta.

It was the flood of emails from our users that made us decide to try to keep Net4TV live. If enough people want us here, then we will be.

I hope that answers your questions.