Reading through the slides from Reeltime's Analyst Briefing (warning: 8MB PDF) yesterday I had to wonder where they pull their figures from.
Slide 9 contains a table with possible conversion rates from their deal with Yahoo!7. I hold a small parcel of RMA shares and I have to call shenanigans on this. There are several things which are IMHO grossly misleading for investors:
- 5.6MM visitors -- whilst I don't doubt the magnitude of this number, keep in mind that that's any user who's visited the Yahoo!7 network in a month, even if that user only visits one page in the entire month. Those 5.6MM eyeballs are spread across ALL of the Yahoo!7 properties, and there's no way Reeltime will get anywhere close to 100% exposure.
- 1.5% conversion rate -- the lowest conversion rate provided -- is ridiculously high. As indicated here for a typical banner ad you'd expect sub 1% click through, and 1% of those users would typically end up transacting. So you're talking about a realistic 0.01% conversion rate ... that's a 150x difference.
Disregarding the real number of eyeballs Reeltime hits we're talking about 0.01% of 5.6MM users which is 560 rentals in a month. At $5 a pop we're looking a $2800 revenue -- a far cry from $420,000.
Disclaimer: I work for Yahoo!7 but have no involvement in the Reeltime deal. I also own RMA shares as I liked the original STB idea. So its stupid for me to pan their business, and indeed its very much in my interest for this deal to work for both parties but I think its plain dishonest, or at least irresponsible, for Reeltime to be putting out figures which are so blatantly misguided.
