Though it’s easy to confuse the name UGO with IGN, a closer look reveals some notable differences between the two male-oriented portals. Among them, while IGN takes shelter under the massive News Corp umbrella, UGO has remained independent, staking its claim first by reaching the gaming audience in the company’s original incarnation before expanding into a broad 18-34 male lifestyle/entertainment destination.
Of course, much credit can be given to co-founder/CEO J Moses (pictured), a media stalwart who has traversed the globe in his career, from his television days at ABC Sports and launching MTV Russia in the 80s, to spearheading the Games division of BMG Interactive (and subsequently green-lighting “Grand Theft Auto”) in the 90s. But it was the Internet revolution that fanned the flames for UGO, which Moses has turned from a gaming fan’s paradise into what he calls a full-fledged “digital playground.”
In part 1 of our chat with Moses, the exec explains his impetus for starting UGO, recalls his hallowed history in media, and reveals the hurdles he faced—from some unlikely sources no less—in starting his content-heavy, advertising-friendly network.
Hi J. Tell me about the origins of UGO.
When we started the company, I told the board that this would be a 3-5 year breakeven, and it would probably require up to $100 million of investment. Since that was ’97, and the world wasn’t behaving like that, I’m not sure they believed me. The reality is, if you look back over that period of time—for the most part, not the blitz—it really was this 3-5 year breakeven. We didn’t need to raise $100 million, but we had to raise a considerable amount of cash to get there.
As I mentioned, I was at ABC Sports in the early 80s when networks dominated and sports was absolutely dominated by ABC Sports, I watched the transition to cable. The world starting changing in ’84, and then in ’86, cable really started to change the landscape pretty significantly. The lesson I learned then was that when new technologies are introduced to the media business, it just pumps so much oxygen into the room.
When there’s new oxygen in the room, it allows other people to be able to grow. Before ’84, there was very little oxygen out there. Then in ’84, when cable companies started getting some traction, bandwidth grew and more and more cable channels got distribution. The world started changing. So I thought in ’96-97 that this was happening again. There was new media being introduced that would put oxygen in a room that up that point had become somewhat stagnant. That was the opportunity to create a new business base in this new technology.
The principles were very simple. I spent my entire life in the media business, and just really took the pillars of wisdom from the past media businesses, which is take a demographic, focus on it, create great content which drives the audience, and then you can leverage that audience into revenue with advertisers. It’s a pretty simple model with just a new technology.
The big difference between this business and the cable, and the other media businesses was the distribution paradigm. That was the shift. Otherwise, it was all a media business.
UGO’s initial model was a gaming network, correct?
UGO originally was Unified Gamers Online. There were a few reasons we started there. One is I was familiar with the gaming business because I had just run the gaming business at BMG. I believed the early adopters on the consumer side would be 22-year old guy gamers because they were familiar with the technology and they were embracing it. 18-34-year-old guys also was obviously a very valuable demographic for advertisers.
On the other side, I believed that the game companies would be the early adopters on the marketing side. In the end, I was proven correct by the audience. But in the end, the gaming companies did not embrace the technology from a marketing standpoint.
It’s ironic that gaming companies of all people were hesitant.
Yeah, it was very interesting. They just were skeptical for the first 4 years truthfully. They were slow to get in. Because of that, about two years into the business, we made the decision to broaden into different marketers, and really go after men’s lifestyles…what we call “gamers with personality.” That has worked out extremely well for us from both an audience standpoint and an advertising standpoint. It broadened the appeal for both the audience coming to UGO with lots more diverse content, and also attracted advertisers who were interested in more than just gamers.
You guys do have broad coverage in the entertainment realm now.
We look at ourselves as a digital playground. There are lots of things to do at UGO. You can play, you could read serious things, you could look at videos or pictures of girls. There are a variety of things to do.
Was your initial inclination to change the model pre or post-bust?
It was pre-bust. I think we switched to Underground Online in ’99. Then the bust came, then 9/11 happened, and that’s when we changed our logo. Our logo up until then was [a black fist]. Howard Stern stole it. But it was a very similar fist, but we had to go to a friendlier brand. Again, we were trying no to recreate the wheel, but a meatball with three letters in it is a very successful way for media companies to brand themselves. So that’s where all that came from. ABC has lived and has created a lot of value, as has CBS. So that was the motivation for UGO, just to make it more of a mainstream entertainment brand.
(TO BE CONTINUED…)