Sen Ze’s Business In Your Pajamas! Blog

So the grey-haired Taylor “Soul Patrol” Hicks became the new American Idol in the just-concluded contest, beating out the sultry Katharine McPhee.

(My favorite contestant for the 5 American Idol contests so far is Clay Aiken, by the way.)

Make no mistake about it - American Idol is a business in and of itself - and it’s a HUGE one.

Here’s the bottomline for the organizers of this Talent Show juggernaut.

Over 63.4 MILLION SMS votes were casted in 4 hours to help determine the winner in just the finale alone!

With each SMS costing say 50 cents, the organizers grossed over 30 million dollars in just 4 hours! (I don’t remember how much each vote costs, and I’ve missed most of the episodes this season except for the final, but you can easily do the math.)

(Click on link to see my previous post on SMS Marketing and how you can use SMS to help market your business.)

And that’s not counting all the other millions of SMS votes and the advertising slots that were sold throughout the duration of the series.

Advertisers paid a whopping $700,000 for a 30-second ad on an episode of American Idol this season, week after week. This same 30-second spot cost $1.3 million in the finale just 2 days ago!

American Idol gets up to 35 million+ people tuning in each week - the highest audience ever for any TV show in the history of American television. See some figures here:

American Idol Statistics I

American Idol Statistics II

American Idol is BIG money - there’s no doubt about it.

While it looks deceptively like a simple talent show - it’s a whole lot more than that in reality.

It skillfully incorporates:

1. The background to each contestant’s desire for be the an American Idol

Everybody loves stories and there are plenty of stories to be told behind each contestant’s desire to make it big in the music industry.

This is the extra value on top of the contestants’ own singing and dancing abilities that we get to enjoy watching each week.

2. The hurdles each contestant needs to go through to be heard

The hurdles include brief auditions and nasty, honest remarks by one judge called Simon. Every stinging remark is felt not just by the contestants, but us as well.

For some reason, some of us tend to symphatize with the contestants and some of us love to see them go through it all. This makes every Idol episode a very watchable one for viewers - in addition to the actual talent (or lack of it) of the contestants.

3. The emotional involvement of the audience

We get to determine who becomes the winner with our cellphone. Just a few keystrokes to be sent to a number for our favorite contestant, and we may have determined the future American Idol. It’ll cost us some, but not so much that we feel it’s a waste of money.

4. The results announcement

We all look forward to the results episode to see if our votes made a difference. This increases the program’s mind share in our heads, for the entire duration of the series and in the future.

5. The elimination of the contestants, one by one

Our votes do not only determine the winners. Contestants who don’t get enough votes get booted out. Seeing the elimination happen as a direct result of who we voted for or who we didn’t vote for makes for enthralling viewing.

It’s a wonderful mix that connected with a big number of people looking to be entertained.

Thus TV is no longer just a passive affair. With American Idol, the involvement of the audience is taken way beyond just watching it, to actually being given a chance to determine its outcome in the simplest possible way (through their cellphones), in real time.

This was never made possible on TV before, but just look at what a little bit of creativity can do to enhance the enjoyment of an audience AND make LOTS of extra money at the same time.

This interactivity brings to mind another medium that is naturally so. I’m talking about the Internet and the World Wide Web, of course.

We’ve got instant polls on web sites for as long as I can remember - but not the killer concept that makes it work like American Idol.

There’s also the other problem of tuning in - because unlike TV, there are millions of channels on the Internet for any user to tune into.

Those channels are called web pages.

Each web page is like a channel in that you can only read a single web page at any point in time.

Most web pages are accessible all the time, thus even if everybody is tuned into the same web page, they’re not doing it at the same time.

Some could be reading it right now, and others could be reading it 2 months from now.

There is no “event” for web pages on a regular basis, unlike an American Idol episode which is broadcasted at the same time each week, every week until it ends.

There’s also no real involvement by the Internet user when he’s at a web page apart from getting the information that he wants.

Nor is there a very compelling reason, apart from getting the information or in being entertained, why anybody would want to be at a specific web page all the time, or vote for something, even if it benefits him because doing so will benefit him in the usual way.

There’s simply nothing “extra” that is worth his effort for him to do so.

Even the Idol concept in a modified form found on the web at the Idol Underground web site is not the answer.

So what is?

Stay tuned - I may just provide you with some clues in my next post.

Warm Regards,
Sen Ze
Click Here To Join The Pajamas Revolution Right Now

Here’s how the Private Label web site operators in my earlier posts (Private Label Concept I and Private Label Concept II) managed to realize their profits (calculated in my last post on Business Profitability of one of them) in the quickest possible time.

Use them as the basis for your own similar web site:

1. Make sure your product is something your Prospects WANT to buy
You can easily do this by thinking of the problems your Prospects face every day. What can you provide them with that will solve those problems for them?

Private Label Articles is another name for CONTENT for web sites, newsletters and Blogs.

They’re attractive  to a Prospect because they’re already written for the Prospect for him to do whatever he wishes with it.  There’s no need for him to spend hours every time thinking of things to write about.

Some Prospects don’t have good writing skills and Private Label Articles will solve his problem instantly. Other Prospects don’t have the time or the patience or the ideas to even attempt to do it - so Private Label Articles is the solution for them.

Hiring writers to write for them may be too costly for an invidivual to bear, but for an operator of a Private Label web site where the same articles are being re-sold to other members, those articles are now instantly affordable to a big number of Prospects since they’re only paying a fraction of what it would cost them to hire writers to create those articles for them.

Now instead of paying $5 - $30 per article, they’re paying only a few cents for it!

2. Ensure that you limit the number of memberships
So when something that is wanted is also affordable to most of your Prospects, you’ll have lots of potential Customers.

However, if too many Customers were to use the same articles on their web sites, the value of your Private Label Articles will be diminished.

The solution to this is of course to LIMIT the number of people who are able to get your Private Label Articles.

When you do this, 2 things happen:

1. You maintain the value in the Articles which is what your Prospects want;

2. At the same time, you’ll be able to sell out your limited stock QUICKLY as your Prospects scramble to become your Customers to ensure they’re not going to miss out.

By limiting access to those Articles - you create SCARCITY.  And scarcity is a great motivator to get someone to act NOW.

Now from your remaining Customers, each of them will not mind sharing those Private Label Articles for the simple fact that they can be used in many different ways.

They can be changed in a minor or major way so that there can be no resemblance between one article and another even if they’re both modified from the same Article.

3. Set up your Membership Site
There are programs available for you to set up on your server to help you limit access to your Private Label Articles only to members with the right usernames and passwords.

These programs will help you to automatically create usernames and passwords to your paying Customers, inform them of the login details, and otherwise help you to easily maintain your list of members with the minimum of manual work.

You can, of course, do away with a membership site altogether and merely e-mail the Articles to your Customers every month - but e-mail has its limitations and a membership site allows you put up many more items for your Customers to download.

4. Make Your Offer
You’ll need to write a Killer Sales Letter selling membership to your Private Label site. However, with the above in place, your Killer Sales Letter almost writes itself.

Having said that - writing a Killer Sales Letter is an acquired skill. You’ll need to ensure that it’s written properly or you’ll get fewer sales than you deserve.

Get my book for some of the basics on writing a good Killer Sales Letter. Or you can discover some of the most advanced Killer Sales Letter writing techniques with this Copywriting For Selling On The Web course. You’ll need to know exactly what to write and put on your web site if you sell a single unique product on the Internet.

5. Set Up An Affiliate Program
To get the most number of sales in the shortest possible time, you’ll need help from others in promoting your membership site for you.

Setting up an Affiliate Program will enable you to get the help of Affiliates to help you promote your site in return for a commission on every sale made through their efforts.

You don’t have to pay Affiliates any money to market for you - only when they make a sale for you. This is an excellent way to reach out to more people without any risk (you pay only when a sale is made) by leveraging on other people’s efforts.

You’ll need to provide your Affiliates with the marketing materials in the form of sample endorsement letters, unique Affiliate Links, sample ads, banners and all the things necessary for them to easily promote your web site without having to do too much work.

You’ll also need an Affiliate Program Software to help you manage your Affiliates, automatically provide them with their own unique Affiliate Links when they’ve signed up and provide sales statistics to them so that they can check how well they’ve done with promoting your web site.

Get this very affordable Affiliate Program software that does more than the above.

6. Choose Your First Affiliates
To ensure that you sell out fast - you’ll need to look for Affiliates with existing mailing lists that are responsive to the Affiliates’ recommendations.

There are many Internet Entrepreneurs out there with mailing lists they’ve built up over months or years. Their lists continue to generate them money over time. Those on the list respect the Internet Entrepreneurs’ recommendations - thus a good endorsement of the Private Label web site by them will result in very quick sales, provided the offer is attractive enough.

These are the first Affiliates you would want to have to help you launch your web site with a bang.  And if you limit your memberships with a Killer Offer with the initial marketing done by well-selected Affiliates, you’ll be able to sell out your memberships in no time.

Warm Regards,
Sen Ze

Let’s talk about the Private Label sites that were so successful in selling their memberships, and their profit potential to see why they’re doing it.

If you’ve missed my Posts on those web sites, click below now:

The Private Label Concept

The Private Label Concept Part II

Imagine - the first Private Label site sells membership at $67/month and they’ve capped it at 1,000 members. Since it’s now sold out, the web site operators are making $67/month x 1,000 members which is $67,000 - each and every month!

Now they do give away 50% to their Affiliates who refer Customers to them. Assuming every single sale they get is through their Affiliates, this leaves them with $33,500/month. Which is a cool $402,000 a year!

Out of this amount, they’ll need to pay their team of writers to write those Private Label articles for their members to use.

Now I don’t know how much this costs them, but the operators can either pay them for each article produced, or hire them and pay them on a monthly basis irrespective of how many articles are being created by them every month.

Good writers can be hired or sourced pretty cheaply all over the world. If their writers are being paid for each article produced, those 500-word articles can be written from as low as $5 each.

Now if you calculate the operators’ costs using this figure - 1,000 articles will only cost them $5,000.

If it’s $10 per article, their cost is $10,000.

If it’s $20 per article, their cost is $20,000.

If it’s $30 per article, their cost is $30,000.

If you deduct $30,000 (the highest figure from the above example) from $402,000 - the operators are left with about $372,000/year.

If you deduct $5,000 (the lowest figure) - they’re left with about $397,000/year.

Now that’s not a bad chunk of change after all is said and done!

Of course, there are other overheads like hosting, equipment, premises, etc - but the operators can easily do this in their homes using their computers and their time, with inexpensive server hosting plans - which, all added up together, will likely cost only a few thousand dollars a year.

And the operators haven’t really fully realized their profits yet because they now have 1,000 paying subscribers - who can be sold other things to again and again in the future!

(Paying subscribers are much better Prospects for their other products than free subscribers, because the former have already demonstrated their willingness to pull out their wallets to pay for their membership.)

You don’t want to miss my next post on how the operators can easily realize their profits that you now see on paper - with some Business In Your Pajamas principles.

Sen Ze