Does Stardock "need" WinCustomize?

There are some people who think that the moment someone starts a business that they instantly become greedy, money grubbing corporate robots.  But the reality is, most companies are privately held and those companies do things based on what motivated the stockholders.  In a private company wealth may only be a secondary motivator.

I can say as the principle shareholder in Stardock that accumulating wealth has never been my motivator. I want to do cool stuff. And I consider it my "talent" to be able to generally take things I enjoy doing and be able to do them as part of my "job".  Some things are done strictly because we think they're neat to do even though there's no remote business justification for it (JoeUser.com for instance).  We recently started doing PowerUser.tv too. There's no money to be made in podcasting (unless you're a mega player). But it's fun.

WinCustomize falls into a middle category.  Stardock makes software such as WindowBlinds, IconPackager, DesktopX, and so forth.  People who buy that software or are thinking of buying that software will want to see what can be done with it.  So in that sense, having some sort of gallery of content is necessary.  Statistically, most people hear about the software somewhere else or see a screenshot, download the trial version, and THEN start downloading skins after they've purchased it. It's not the other way around -- as a percent, few people discover our software through the skins first.

WinCustomize is a lot more than a skin gallery though.  It's a whole web community.  It's the largest - by far - site dedicated to downloading content to enhance your Windows desktop experience.  With over 22 million monthly visitors, it's one of the largest sites on the net period.  And it's safe to say that of the 22 million visitors, only a tiny tiny % actually have purchased (or will purchase) a Stardock product.

The growth of WinCustomize has been steady.  In December 2004, the site was getting around 14 million visitors per month. In September 2005, it got just about 22 million.  That's a very significant increase for such a short period of time.  Yet subscriptions to the site have declined.  That is, people who pay $20 to support the continued existence of the site and receive a number of (I think) pretty cool services. 

Some people have argued that WinCustomize has no business even trying to get people to buy subscriptions. Since Stardock "owns" it then Stardock should pay for everything because it's a "marketing" expense.  Running a site that gets 22+ million visitors per month is not like running some home page.  It takes rooms of servers and hundreds of megabits PER SECOND.  It also requires an IT staff, database developers and web developers.  You're talking hundreds of thousands of dollars a year in expenses.

As a marketing expense, WinCustomize's value is pretty limited.  After all, DesktopX has been on WinCustomize since its founding and yet the wider world seems completely unaware of its existence.  You hear a lot about Konfabulator.  But little about DesktopX.  Why is that?  There's lots of reasons. But one of the root reasons is a lack of marketing.  A lack of ability to get the word out on DesktopX to get users and developers to try it out.  More developers doing things with it would mean more and better content which in turn would encourage more users to use it.  But in the end, Konfabulator ended up as the program people think of for adding mini-applets to their desktop.  And those who have heard of DesktopX are often unaware that it does a lot more such as build entire desktops and allow for desktop objects.  So how valuable is WC for marketing? Not much.  To be generous, I'd say $50k.  And that's just one example.

But WinCustomize currently costs over $300k per year to exist.  And in a year, it'll likely cost closer to $400k.  Advertising and subscriptions bring the cost down by around $100k. That leaves $200k left.  It WC worth $200k in marketing? Not on your life.  If Stardock had $200k in extra marketing dollars to spend each year, think of all the advertisements, high end PR firms, and community outreach programs it could have invested in?  

The point being, while WinCustomize has some value as a marketing resource, its value is pretty limited. The simple fact is that WinCustomize exists because of what I mentioned at the start -- Stardock, as a private company, can do things simply because it thinks it would be cool.  It cares about the skinning community and it thinks having a site like this is neat and worthwhile -- to a point.  Individuals have hobbies. Private companies have hobbies too (that's a big difference between private companies and publicly held companies).  But just as with personal hobbies, at some point they get too expensive to keep going.

To try to change things, Stardock has brought in two new people right away to help create more incentives for people to subscribe to WinCustomize -- more content for subscribers.  But odds are, things are going to start getting tighter for those who simply visit the site month after month who haven't contributed anything (on WC, skinners, even if they've not subscribed or bought anything are given access so that they are treated as subscribers).

Some things that come to mind:

• People with no accounts will only be able to download things that have been uploaded in the past 48 hours and only 5 megabytes of content.
• People without account will likely see a lot more ads. See www.gamespot.com for a good model.
• People with accounts will be able to download up to 50 megabytes. After that they must become an SD customer or a subscriber.
• People who have purchased a SD product (Object Desktop, CursorXP, etc.) will have unlimited downloads but there will be some skins that will only be available to subscribers.
• SD customers will see fewer ads but they will see some ads.

These are just a few ideas floating around -- ideas submitted by users incidentally -- that we're seriously considering.  Since WC isn't paid for by ads, the # of monthly visitors is not as much of a goal as one might think.  If we could cut our traffic in half, we could probably save around $50k per year in expenses.  Another $50k would likely result from increase SD product purchases and/or subscriptions.  That would be a net difference of $100k.

There are plenty of other good skin sites out there people can visit. Here are a few: http://www.skinbase.org, http://lotsofskins.com, http://skins.deviantart.com/, http://www.skinz.org, http://www.customize.org.

Stardock - the company - needs sites for people to be able to download skins and themes for its software.  But it doesn't have to be WinCustomize.com. Ultimately, if the wider userbase doesn't or can't support WinCustomize as it exists today, then WinCustomize will evolve to be a site that caters more to those who can support it.  The current model for it is unsustainable.