{"id":17,"date":"2005-05-24T21:37:47","date_gmt":"2005-05-25T01:37:47","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/cesarbreadev\/2005\/05\/24\/party-on\/"},"modified":"2005-05-24T21:37:47","modified_gmt":"2005-05-25T01:37:47","slug":"party-on","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/2005\/05\/24\/party-on\/","title":{"rendered":"Party On"},"content":{"rendered":"

<\/a><\/p>\n

You’d have to live under a rock not to have noticed that poker fever
\nhas swept the country in the last couple of years.  Last week I
\ngot an interesting glimpse into the business end, and it prompted me to
\nthink a little bit about where online marketing might be headed.<\/p>\n

First, my friend Mike Contrada, co-founder and EVP of the Balanced Scorecard Collaborative<\/a> (now part of Palladium Group), invited me to a conference last Thursday in Cambridge where I met Jonathan Halkyard, VP and Treasurer of Harrah’s Entertainment<\/a>. 
\nOver drinks after his talk (he is a polished and articulate speaker) I
\nasked him about online gaming and its impact on the industry. Among
\nother interesting observations, Jonathan related that the PartyPoker.com business<\/a>
\nis now clicking along at more than $400 million in annual profits on
\n~$600 million in revenue, based on a $4\/pot “rake” from an average of
\n60,000 players online 24\/7.  I nearly choked on my wine. 
\n(Jonathan explained that Harrah’s, which runs the World Series of Poker
\ntournaments, and its US-based peers cannot get into online gaming under
\ncurrent laws.)<\/p>\n

Coincidentally,  I was at my business school reunion this past weekend and had a chance to catch up with my classmate Audrey Kania<\/a>, who is one of the founders and a senior executive at WPT Enterprises, producers of World Poker Tour<\/a>. 
\nAudrey, who successfully extended the Winnie The Pooh brand at Disney
\nearlier in her career, has been leading a whirlwind existence these
\npast few years (and become a pretty fair — no, intimidating — poker
\nplayer in the process).  WPT started by developing television programming
\nbased on poker tournaments (they invented the hole cards spycam) for
\nthe Travel Channel.  They’ve certainly popularized the game, and
\nin the process have built a $15M business based on the programming, as
\nwell as tournaments, books, and other extensions.  WPT went
\npublic last year and sports a $330 million market cap, too, placing
\nAudrey in the current pantheon of our class’s heroes.  How can
\nthat P\/S multiple be?  Investors peeking at PartyGaming’s projected $6 billion
\nmarket cap are betting <\/a>that WPT Online can also get at least a sliver of the same market as it continues to boom.<\/p>\n

While I haven’t yet tried out PartyPoker, I did visit
\nhttp:\/\/games.yahoo.com and downloaded Poker Superstars, for research
\npurposes of course.  Interestingly, while it’s an extremely
\npopular download, I didn’t see any product “placements”, or ads in the
\ngame (they are supposedly free of spyware).  I’m thinking this
\nwon’t last.  My guess is that advertisers won’t miss the chances
\nfor “this playing tip brought to you by GM”, or more subtly to have TJ
\nor Phil or Johnny sip a Coke, or bet with Harrah’s branded chips, or
\n“the Fedex river card” (it’s not clear though who might sponsor the
\nflop).<\/p>\n

Just as Google and Yahoo have made major inroads into traditional
\nmedia’s share of ad dollars, it’s conceivable that with computer game
\nrevenues now eclipsing those of the global movie business we will see
\nads show up here as well, following the eyeballs\/ share of mind now invested in this medium. 
\nWhat’s interesting is that ads in this medium have the potential to be
\neven more effective.  Rather than annoying me, anyone whose
\nsponsorship pays for tips that help me improve my game gets my
\ngratitude.  Hmmm.  E-commerce meets e-learning?  A sure
\nsign of the apocalypse!<\/p>\n

This story also is a powerful reminder of the notion that ultimately
\ncollaboration is the source of the Web’s greatest value.  Playing
\npoker online is just another highly structured form of collaboration<\/a>, meeting
\nall of the requirements for its success (something valuable to
\nexchange, tight group affinity, ease of participation).  Compare
\nfor proof the economics described above with Amazon’s recent results
\n(~$200M net income on ~$8B in revenue annually).<\/p>\n

(Side note:  Jonathan described some very creative uses of RFID at
\nHarrah’s, including putting them into servers’ nametags to be able to
\ntrack, for example, turnaround times at drink stations.  Jonathan
\nalso taught me new term:  “bevertainment”.  This is when
\nwaiters and waitresses are also actors and singers who will
\nspontaneously break out into song or dance while serving the
\npatrons.  Rather than separating their jobs as food service
\nworkers from their vocations as performers, bevertainment allows them
\nto earn tips while they audition for the passing producer or
\nagent.  Genius!  Who knew?)<\/p>\n","protected":false},"excerpt":{"rendered":"

You’d have to live under a rock not to have noticed that poker fever has swept the country in the last couple of years.  Last week I got an interesting glimpse into the business end, and it prompted me to think a little bit about where online marketing might be headed. First, my friend Mike […]<\/p>\n","protected":false},"author":298,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[589],"tags":[],"class_list":["post-17","post","type-post","status-publish","format-standard","hentry","category-cesarbreastories"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/posts\/17","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/users\/298"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/comments?post=17"}],"version-history":[{"count":0,"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/posts\/17\/revisions"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/media?parent=17"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/categories?post=17"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/cesarbreadev\/wp-json\/wp\/v2\/tags?post=17"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}