Drew Curtis of Fark.com fame is our Simon Cowell for this episode of Vator Box - our version of Siskel & Ebert meets American Idol. This time we look at predictive market company, Hubdub – which appears to compete with companies like Spigit, Inkling markets, NewsFutures.com as well as Younoodle, Pollection or Vizu. We also look at CrushTV and ask whether this social video site grows up to be YouTube or Girls Gone Wild.
We started with Hubdub, which calls itself "The World's News Forecaster." Essentially, the site lets members bet on the outcomes of real news stories. People post news columns and raise questions or make predictions. Questions range from “Will Mark Zuckerberg still be CEO of Facebook by end of 2008?” or “Will oil close below $100 before the end of March 2008?” to “Who will win the Pennsylvania Democratic Primary?”
The site uses a method of online research that harnesses the wisdom of the crowds.
Not one to hold back, Curtis said he’s not a big fan of the collective wisdom of crowds. “They’re (the crowd) pretty dumb,” he stated. Ezra Roizen, our regular Vator Box host, said it’s unclear what the real incentive is to get people to continually participate. “Is the incentive of being on a leaderboard enough to get you engaged?” he asked. Probably not, he surmised. Drew said that on Fark, the leaderboard incentive isn’t a driver of participation on Fark. Rather, his contributors submit humorous content for the mere enjoyment of walking away “with a gut laugh.” Fark.com is a site that lets people submit news items. It’s similar to Digg and Reddit, but is focused more on strange and funny news. If Hubdub can't offer the incentive of laughter, it may have to offer a monetary incentive. At NewsFutures, another predictive markets site, participants with high scores win several thousand dollars annually, NewsFutures CEO Emile Servan-Schreiber tells me.
Yours truly wasn’t sure if a site for predictions or a site to watch the results of crowd predictions was enough of a draw to be a destination. All three of us agreed that polling is a good way for news outlets to create news fodder or engage their audience.
As for the business model, the three of us said it appeared the site was either going to license the polling system or take advertising. We failed to point out, however, that Hubdub could actually charge people to get involved. In fact, this is apparently a model CEO and founder Nigel Eccles is considering. The company “may adopt a business model like that of a fantasy sports league, where participants pay a fee to join and win rewards at the end of a certain period of time based on overall performance in the league," said Eccles, in an ABC News story. Whether that’s enough of an incentive, however, is also unclear.
CrushTV - the video social network
After discussing Hubdub, Vator Box looked at CrushTV, a college site that connects university students with their campus life. Los Angeles-based CrushTV signs up college students to be correspondents on topics like music, dating and sports. Perhaps I’m mistaken, but from the looks of the video pitch they submitted, the content looks a lot like MTV’s Real World meets Girls Gone Wild. Ezra said he fears the site “devolves into some really crazy content” or grows up to be “quite a frightening derivative of MTV.”
Drew pointed out that it’s interesting that people would post their videos onto CrushTV rather than YouTube. I pointed out that unlike YouTube, CrushTV is far more narrowly focused, and thus can add a community element that YouTube can’t. I also like the “campus correspondent” aspect of CrushTV. It’s a great way to get students involved. That is, of course, if they keep it up, which is a point that Ezra raised.
Drew’s observation was pretty accurate. “If they’re lucky, they grow up to be YouTube. If not, they turn into Girls Gone Wild.” Ezra's was more probable. As he puts it: "Every person who will be on this TV station will regret 10 years later for being on this TV station. Yet at the same time for the immediately following three months, they'll be really cool."
Final thoughts
We're not experts on these sites. I invite Eccles or those familiar with Hubdub and predictive markets in general, as well as CrushTV's founder Mike Yepp to offer up any comments that might shed better light on their companies or their respective market opportunities.
Curtis is clueless. The wisdom of crowds is a well documented fact, as long as you draw enough diversity of opinion and provide a well thought-out opinion aggregation mechanism, like a prediction market.
Roizen is clueless too. Prediction markets have been around for years (in NewsFutures' case, over 7 years) and the demand for them just keeps accelerating. If well designed, people get deeply and durably engaged. These are the 4Rs of why people keep coming back:
1) Rewards: Cash, prizes, etc. Get paid for being right before everybody else.
2) Relevance: If you care about an issue, if you have an opinion about it, prediction markets let you in on what others think and let you measure exactly how right or wrong you are.
3) Recognition: Dominating the leaderboard is a social reward par excellence.
4) Relationships: When you're betting directly against other people who care deeply about the same issues, you can't help build rich relationships.
As for the business model, it's part advertising, part sponsored market research, and part implementing the system inside companies to make better business-relevant forecasts.
In conclusion, allow me to share a basic principle all of us in this "wisdom of crowds" industry adhere to: "Don't trust the opinions of a couple of talking-heads on TV who are just trying to look smart - who could blame them? - even while talking about things they don't know anything about." That's not even crowd wisdom, that's just common sense.
Cheers!