By Ben Starr
Consolidation is the buzz word in the industry nowadays. Gone are the guys in small teams who work hard and are all committed to driving revenue 12 months each year. We now see a culture where year-end profit is more important as it increases the attraction of a sale.
I wrote an article 5 months ago questioning whether the niche could be profitable and today the question is still at the forefront of my thoughts. After all, how many times can one reinvent the wheel? In any case, it’s just online bingo, isn’t it?
Twiddling your thumbs throughout October, November and December does not breed a committed and involved work force but might drum up the interest of a bigger player in the pool of gaming companies.
With consolidation comes power. Such large companies have ultimate say over how they treat partners. The slide in control becomes more and more weighted as the company gets larger. How much do Amazon pay their affiliates? The answer is next to zero. eBay? The same…
It’s only a matter of time before this happens in gaming and it has actually already started with the likes of Cashcade cutting their affiliates down to a flat rate of 25% – gone are the days of 35% and even 40% affiliates. Some operators have countered this with even more aggressive affiliate promotions and it took no more than 10 minutes from Cashcade’s news breaking to the industry than for Costa Bingo to announce a month long flurry of 50% revenue share. I wonder though that if Costa Bingo were the size of Foxy Bingo, how likely we would have been to see this reaction as opposed to one of a me-too reply.
So, how can the small guy survive? From an affiliate point of view, it is certainly difficult. Perhaps too from an operator stand point…
…as the offline marketing budgets just can’t even be remotely comparable to those of the mammoth Cashcade or Wink Bingo. This is not industry specific though as copycat brands will always struggle in an established marketplace.
My worry though is that even niche brands who try something different will still be swallowed up because they struggle to communicate their point of difference to the masses. Niche or no niche, it’s difficult to grow organically because of the powerhouses of an industry. For an affiliate, is it just about ranking 2nd in Google for every brand term? For an operator, is it just about spending more than the rest on television advertising? For the sake of this young industry, I hope the answer is ‘no’ for both. I hope there are new, fresh and exciting ideas that can be born on both sides of the fence that are rewarded with growth and market share.