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Monetizing a niche social network

Ken Davenport
Monetizing a niche social network Ken Davenport

When I was a kid, my mom sold Tupperware. She spent most of her time trying to arrange these get-togethers, where one of Mom's friends would invite all of her friends into her living room for a "party" -- and then Mom would sell burping sandwich holders to all of them by the station-wagon load.

And that's the exact theory of creating a niche social network for a product: Gather similar-minded people in a central location for social purposes, and let the selling take care of itself.

As a Broadway producer, I have two very different problems -- one short term and one long term -- that I obsess about every day.

1. The short term: How do I speak to my customers?

Broadway tickets are sold through third-party ticketing agencies, which means we don't have the ability to communicate directly with our customers. In fact, we don't even know who our customers are.

2. The long term: How do I develop the audience of tomorrow?

For better or for worse, I'm married to Broadway, which means I need to make sure that my livelihood is nurtured and protected not only tomorrow but 10 years from now. With the National Endowment for the Arts reporting a 10 percent decline in attendance for musicals and a 21 percent decline in attendance for plays over the last 25 years, what can I do to make sure today's youth grow up with a passion for attending live theater?

Two birds, one stone
Incredibly, developing a niche social network for Broadway theater lovers was the solution to both of these seemingly different issues.

While message boards and chat sites existed for some of Broadway's passionate fans (the "Trekkies of Broadway"), nowhere on the web was there a Tupperware party atmosphere where fans could identify themselves, share what they loved about Broadway, and be proud of being a fan.

By building BroadwaySpace.com, a social network developed on the Ning platform, I was able to provide all of these fans a place where they can share their passions with other people just like them.

In 18 months, we had 15,000 of Broadway's best and most talkative fans on our site (13 percent see more than 13 shows per year). We now have permission to speak to our most passionate customers, or our "missionaries" as I call them, anytime we want, which enables us to address problem  No. 1.

At the same time, whenever you gather a group of people in the same room, the volume of the chatter increases. Mom's Tupperware parties used to keep me up way past my bedtime, thanks to the volume of those 14 ladies and one guy. By creating a social network, the sheer volume of the conversation about Broadway and Broadway shows is amplified electronically. The louder the conversation, the more top-of-mind the subject, and the more it becomes part of the fabric of one's everyday thought process. Many of the members on BroadwaySpace are now engaging in multiple conversations about Broadway every day, whereas a year ago, they may not even have had one. And Broadway, as a brand, benefits, helping address my second problem related to developing tomorrow's audience.

The monetization question
So great, BroadwaySpace.com was a terrific solution to my two plaguing concerns -- but in solving those two problems, I had created a third.

Now that I had created BroadwaySpace.com, how was I supposed to pay for it? Could I find a way or ways to monetize this niche social networking site?

The answer was yes, but frankly, we didn't spend one minute developing a sales strategy on the site until more than a year into the life of the site. Why did we wait so long? Social networks are like nightclubs. It's not about where they are, or what they look like, or what they're called. It's all about who goes. They don't even have to be big. They just have to have the right type of people.

Instead of trying to sell BroadwaySpace.com, we spent the majority of our time and resources on building our members so that our site consisted of highly qualified leads that convert at a much higher rate than other more generic sites.

Simply put, we put faith in the Tupperware theory. If we could assemble a group of similar-minded and passionate people in a room, the money would follow.

On the following page, we'll take a look at three initiatives we used to build our membership.

Next page >>

1. Advertised on other social networks
In our experience, advertising products on social networks has not been very successful. People don't want to be pitched to while they're being social. Do you want someone selling to you at a nightclub? The same goes for a social network -- except when you're selling another social network. We found targeted advertising on Facebook and other social networking sites to be very successful. If people were in a social networking frame of mind to begin with and admitted their passion for Broadway on their profile, they were easily converted to our niche network.

2. Established BroadwaySpace as an approved authority
Everyone from JetBlue to Procter & Gamble is on social networks these days, and most of them link from their main sites to Facebook, MySpace, etc., legitimizing the site to the consumer.

The same is true for Broadway shows. Most of them were linking to their pages on the other social networking sites. We contacted all of the shows and offered them free advertising in exchange for a link on the site next to their links for Facebook, etc. In addition to legitimizing our site, it also provided us with a steady stream of the most qualified traffic imaginable. In addition, the shows were sending people to a boutique (a niche network) instead of a department store (a non-niche). The show benefits from sending their user to a site where their product is more likely to be discussed, and therefore where their user is more likely to receive multiple impressions (and also where they can actually purchase the product).

3. Let them rub shoulders with the elite
When Justin Timberlake goes to a nightclub, there's a line around the block at the club for months. We extended the nightclub analogy again with a concerted effort to convince the JTs of the Broadway world to join our site and become active members. For the first time, fans could e-meet, friend, and message some of their favorite Broadway stars. Many of these individuals didn't even have central fan sites. On BroadwaySpace, we were able to provide a common meeting place for all of their fans from the distant corners of the web. BroadwaySpace has more than 20 of Broadway's biggest stars, including Adam Pascal, Kristin Chenoweth, and Idina Menzel, as its members, and thousands of their fans have followed.

By building this network of the taste-makers and taste-talkers of Broadway, we have been able to sell media to advertisers looking to reach the core Broadway audience. Thanks to the low overhead costs of running a Ning network and because so much of the content on the site is user generated, we are able to keep the costs of the media down, which is very attractive in these difficult times.

What we would have done differently
There's nothing more important than the name of a product. In the case of BroadwaySpace, we chose the less-confident route of selecting a derivative of a popular network at the time. Obviously the brand of that network has changed significantly since our birth, and we will be forever tethered to that brand. When choosing a social network name, we now encourage creators to develop a name that is as unique as your network. No two niches are alike, and no two names should be alike either.

It is amazing to think that social networking is less than five years old, as it is now such a major part of so many people's lives. There is no doubt that social networking will be around for the next five years and beyond. However, if there is one thing that we have learned from the past five years and the Friendsters and MySpaces that the web has left behind, it is that there is always something new. It is my prediction that the next network will not be one network -- it will be niches.

In fact, I'm sure someone will create a Tupperware social network soon enough.

Ken Davenport is founder of Davenport Theatrical Enterprises.

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