Is the niche profitable?

By Ben Starr, OnlineBingo.co.uk

With the industry becoming more and more monopolistic, can a niche online bingo site survive?

Everyone reading this has been part of the online bingo boom over the last few years and it is interesting to see the industry evolve in a similar way to other industries.  The sector is perhaps in consolidation, albeit however slow consolidation because of the size of the acquisitions that need to take place.

Arguably dominated by Foxy Bingo, Cheeky Bingo, Tombola, Gala Bingo and Wink Bingo, can the marketplace support a mid level site?  Everyone is looking for a point of difference but how different can bingo be?  Software, charity, customer service, promotions…once inside the room you are playing bingo.  Why go to a skin when the monsters of the industry are bigger than an entire network of skins?

Online bingo has proven to be very profitable.  With hard work, head count can remain low and media spends targeted.  There are big brand sites knocking on Foxy’s front door but I wonder if sites outside even the top 15 are sustainable.  If the customer service of Perfect Bingo was markedly and publicly better than Foxy’s, I would be inclined to try it out.  However if the promotions, redeposit bonuses and cashier were permanently stronger at Foxy Bingo, they would win my long term business.

Despite being in consolidation, the number of high quality sites in the market, in my opinion, remains lower than 20, perhaps even lower than 10.  Would a reasonable market outlook second that there is space for an Olympic finalist but not necessarily a new Olympic champion (still quite a feat for an athlete!)?  Perhaps a site with a marketable niche or perhaps simply a well run sole website that knows its players inside out.  The site would struggle with SEO in the short run and would have to rely on other sources of traffic, but as revenues increase down the road, this could be addressed.  As TV spends in 2010 look to set new records for the sector, will the big boys merely mop up all the players/small sites out there?

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