Macromedia didn't realize it had created a business-to-business marketing tool that could also generate revenue.
"This is clearly a showcase, since we've yet to show a profit on the site, but there's tremendous potential here," says Steve King, VP-general manager of Macromedia's ShockRave.
While the site hasn't broken even yet, Mr. King says the business plan of the $140 million company calls for ShockRave to generate a "bit of revenue" when its fiscal year ends March 30, 1999.
`Bring the Web alive'
The site, with its online entertainment offerings, is aimed at consumers. But it was designed to create an outlet for Macromedia technology, so "people can see what is possible on the Web and how you can bring the Web alive," says Mr. King.
" `Bringing life to the Web' is our corporate ad theme, and we show that through the animation, content and interactivity that's available even at a 28.8 baud rate," he adds.
For business-to-business purposes, the site now serves as a one-stop shopping mall for potential high-end customers, including Web professionals and graphic designers.
Because having a cool site counts for a lot in the world of Hollywood and the Web, ShockRave has not only generated considerable buzz for San Francisco-based Macromedia, but has also helped position the company as, well, cool.
"Our customers now see us as being leading edge, of taking multimedia to the next level," says Mr. King. "And it's broadened the awareness of our products beyond even the immediate customer base to people who might see it and say, `I want that for my company's Web site.' "
Outside developers created all the material on ShockRave, which features exclusive content from well-known TV shows and cartoons, including "Peanuts," "Dilbert" and "South Park," as well as the first interactive dance club, with the hot club band Big Bad Voodoo Daddy, Mr. King says.
"Our customers are the developers, so this is their work, but they've used our tools to get it done," he says.
Many of the best Web designers and developers don't get the recognition they deserve.
"A lot of the major studio and corporate sites have work done by many of these smaller designers, but they don't get any credit for doing so," Mr. King says. "We are giving them a way to put up on our site a way to advertise their skills. We describe how it was built, who built it and provide links to their Web site, their address and phone numbers to contact them."
It's a circular way of building business, Mr. King says, because as these Web designers become more successful, they'll buy more Macromedia tools.
Macromedia markets Web tools such as Flash 3, a standard for vector graphics and animation; Freehand 8, a design tool for print and Internet graphics; Director 6.5 multimedia studio, tools for multimedia and the Web; and Dreamweaver, a visual tool for professional Web site design.
So far, companies connected to ShockRave are enthusiastic about the payoff of being associated with the hot entertainment site.
"Traffic to our Web site increased by a factor of four since we launched it about six months ago," says Simon Edis, president, Ezone Corp., a San Francisco-based developer of Internet games and featured animations. Its clients include Universal Online, Fox HomeVideo, GameSpot and US Web.
Mr. Edis projects Ezone sales of $200,000 to $300,000 this year, with about one-fourth, or up to $75,000, generated through association with the ShockRave site.
Another company that uses Macromedia tools is Jig Interactive, Oakland, Calif., which focuses on designing "dynamic Web media."
This includes games, animation and interactive advertising and promotions for such clients as Sprint PCS, Hewlett-Packard, Dreyfus Service Corp. and Microsoft Corp.
"More than 90% of our multimedia works are driven by ShockRave," says Jig President Gabriel Jensen. "ShockRave lets me differentiate my services and content, and without it, I would be just another HTML Web designer."
One benefit to ShockRave participants: Macromedia shares online advertising revenue from the banners, animated GIFs, pop-ups, interstitials and sponsorships with its Web developers.
Mr. King says the $400 to $2,000 a month developers might receive "won't make them rich," but it's certainly an added bonus.
"What this has done on a business-to-business level is change our relationships with our customers," says Mr. King. "Before, we were just a tools vendor. Now we're also a marketing partner."
But Mr. King adds that ShockRave is not trying to compete with its customers. The site will quickly change its content if a customer objects. Rather, ShockRave is viewed more as an in-house testing place.
"Since we operate a large Web site, we are living and breathing a lot of the same business and content issues as our customers," Mr. King says. "We look at it as a wonderful test lab to better understand the issues that our customers face, like bandwidth, capacity, download times.
"In our industry it's known as eating our own dog food, because we face the issues they do every day."
At the same time recognizing that its customers are Web savvy, Micromedia is shifting about one-third of the $56 million it spends on advertising and marketing toward the Web.
"We're cutting our expenses in the print media, including direct mail, and putting more of that budget into our online Web efforts," says Mr. King.
"The whole point of all of the advertising is to drive people to the Web site," he says. "That's what our customer wants anyway. If we put a phone number on the ad, they don't call; they go online."