Updated: UK's largest indie blog network Shiny Media goes into administration

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Is the UK’s experiment with large blog networks over? It is now.

It’s yet to be officially confirmed with anyone at the company, but co-founder Katie Lee – who effectively left in February but stayed on as a freelance – has been Tweeting today that the UK’s well known blog network Shiny Media has gone into administration. There are also rumours flying around that the company was immediately bought up by a new owner, though there is no confirmation of this as yet and no news on who the new owner is. I’ve emailed remaining co-founder Chris Price and will update this story if/when he responds.

[Update at 5pm: I’ve now heard from the company and there may be a further statement in the next few days]

Andy Merrett, an ex- Shiny Media writer who broke the story at The Blog Herald, wrote: “Access to Movable Type, on which most of Shiny Media’s blogs run, was lost/removed yesterday”.

This will come as a huge blow to the new editors it recently hired in June.

The latest blog post on any of Shiny Media’s blogs is dated July 19. I’m surprised no-one noticed sooner, but that does indicate how low the network had sunk since the heady days when it landed $4.5 million in 2007 from Brightstation Ventures, which acts closer to an incubator that a VC.

But it must also be said that $4.5m since 2007 is a huge burn for a small company and questions need to be asked about why Brightstation let one of its key investments fall into this trap.

Brightstation – owns Koodos and OSOYOU – is reportedly raising a second fund from high net worth individuals which to roll out new websites by the end of the year. OSOYOU entered administration at the end of last year but Brightstation bought all the company’s assets in January. A relaunch is planned. Brightstation CEO Dan Wagner is also founder and chairman at Venda, the full service e-commerce platform that grew out of Boo.com’s ecommerce technology.

However, it’s also highly likely that Shiny is simply a victim of the current media recession. Though it is also worth pointing out that while many US blog networks survived mostly because they had a huge single market to address, Shiny concentrated on the UK, a much smaller market. US blog networks also tended to take tiny, cheap, offices – if at all. Shiny sited themselves in London’s mega-expensive Covent Garden in order to be close to London’s advertising and media sales house.

The most successful blog networks from the UK have resolutely targeted the massive US market. Mashable is still run from Aberdeen and PaidContent – run from London for a year in 2004/5 but always aiming at the large US market, which resulted in its acquisition by The Guardian.

Shiny launched in 2004 and was one of the first wave of blog networks, and was one of the first in the UK. Few others survived. However, last year the company began to show cracks as former co-founder Ashley Norris departed and subsequently penned a controversial bare-all guest post on TechCrunch Europe which attracted 120 comments.

Updates: Reading comments below it’s interesting to see some smaller blog networks still going like Epic Win Media.

  • Richard John

    Former founder? So she didn’t found it any more?

  • http://www.skimlinks.com Alicia Navarro

    I’m really sorry to hear this, the team at Shiny were superb, passionate, smart, and hard-working. They made a success of something that others have tried to do, and I don’t think this announcement is at all indicative of the value of what they achieved.
    And Mike, not sure your initial statement is a fair one. Companies fail for many reasons other than whether their business was a good one, this recession is testament to that. Before we consider them a failure, lets find out what was behind them going into liquidation?

    • http://uk.techcrunch.com Mike Butcher

      READ THE STORY. The only use of the word failure is in your comment. Perhaps they weren’t using Skimlinks?

      • snowmonkey

        shiny media used skimlinks, i think they were one of the first clients but as editorial sites they were probably not at the right end of the customer journey to benefit from sales commission

  • http://twitter.com/JonathanDeamer Jonathan Deamer

    I think it was clear this was going to happen when they laid off a large number (majority?) of their staff a few months ago. Very sad.

    I know a couple of the staff vaguely online, and it’s good to see that they’ve moved on to cool new stuff. I hope the remaining ones can do the same.

  • http://www.nextwidgets.com Alex

    It’s sad to hear this, but I have to wonder why they couldn’t make any money considering they had “over four million people each month either reading or viewing its content”.

    Could the answer be that they didn’t move away from a CPM model with “advertisers paying between 50p-£20 depending on the campaign per thousand people who see their ad” ? What would have happened had they used transactional widgets such as ours and actually sold products and collected real sales comission ?

    Maybe this is a good learning for all other content sites out there not to rely too much on traditional banner ads and to try out some new revenue models instead.

    • http://jackthorogood.com Jack

      Note the point above Alex: They did try and get away from CPM through affiliate revenue

  • Willy Wonker

    Hey mini-mike instead of crowing over the demise of shiny media, why don’t you – in this age of transparency – publish the revenues/losses of TC Europe because we all know it doesn’t generate enough cash to justify your hotel/flight/party lifestyle.

    As Alicia says many companies are going to suffer in this downturn and they are not all bad businesses. Must be nice having a sugar daddy to bail you out when the cash runs low. Not every business is as lucky.

    • http://uk.techcrunch.com Mike Butcher

      As it happens the events we’ve been running around Europe and in London have been very successful. But then we don’t have an office in Covent Garden, or any office at all. Why do bloggers need offices anyway? Read it again. I didn’t say it was a bad business – am just reporting what’s happened.

  • http://epicwinmedia.com Tom

    It’s a shame Shiny went down. The content was always top notch, but the sites! Yikes. Looked like they were thrown together by a 10 year old ( was great when http://www.mychemicaltoilet.com went indie as it was much easier to read.)

    And the ‘UK’s experiment with blog networks’ is NOT over. Modculture and Epic Win Media are still churning out high qulaity content day after day. Not as big as Shiny – but still around.

  • http://thenextweb.com/2009/07/21/shiny-media-uks-answer-gawker-dead/ Shiny Media, The UK’s answer to Gawker, is Dead. – The Next Web

    […] Europe reports that co-founder Katie Lee who left the company in February has tweeted about the news today. The […]

  • http://www.miramus.com Katie Lee

    Just to clarify, I did not continue on as a freelancer at Shiny.

    And while it’s not really my place to say, the traffic on Shiny was actually the least of our problems, so suggesting that no one noticed because it had sunk so low, seems a bit wrong. I’m sure many people noticed if you ask the editors.

    Somehow everyone failed to notice that Ashley was back on board as well, despite the fact that he had been blogging for Tech Digest and the Shiny Media blog for quite some time. So TC and similar sites just missed the story.

    • http://uk.techcrunch.com Mike Butcher

      Thanks for the clarification I’ve updated the post to reflect that. So what were the problems then if traffic wasn’t it?

      • VC appreciation society

        From what I understand from a Shiny founder (and from what I know of OSOYOU) the problem begins with a ‘B’ and ends in ‘rightstation Ventures’.

        I know that TC loves to report on new venture funding, but in many cases taking VC cash shouldn’t be congratulated with a pat on the back. In Shiny’s case commiseration would have been a better response.

        VC involvement can f**k up good businesses, and I think this saga might be an example of just such an instance.

      • favicon fan

        frikkin’ favicon caching. so much for incognito.

  • http://www.sportsjournalists.co.uk/blog/?p=1966 Sports Journalists’ Association newsblog » Blog Archive » Shiny Media ‘in administration’ says founder

    […] Chelsea, Manchester United, Arsenal and Spurs blogs – have been inactive for almost a year. According to reports today, the last entries on the company’s other blogs are dated July 19. Last September, Lee and her […]

  • notdanwagner

    I’d be keen to hear the founder’s reflections on the deal they struck with Brightstation.

    We were approached by them on spec and given the terms they offered us, I’d be fascinated to hear about the Shiny deal.

  • Emma

    By the way, there have been posts on Catwalkqueen.tv since the 16th….a couple today even!

  • http://www.hecklerspray.com Hecklerspray.com

    Sorry to see that Shiny Media didn’t make it through a very tough market.

    Like Mashable and paidcontent, Hecklerspray also targets US as well as UK readers (800,000 unique users last month), but the ad market has fallen on its arse and it is more difficult than ever to make good money from blogging.

    The problem with lots of US traffic is that it can be tricky for a London-based blog to get on the radars of media buyers in the US. The mainstream media is struggling with this problem too.

    I personally think that the ad market itself is broken, and that publishers have largely commoditised their inventory.

    • http://www.unrealitytv.co.uk Gerard McGarry

      Can I just reiterate what Hecklerspray are saying here – the folks at Shiny Media were great, and really passionate about their blogs.

      I agree that the ad market is suffering, meaning that the publisher is getting a really bad deal at the moment. The lack of decent ad inventory at the moment is worrying.

  • http://www.facebook.com/people/Ian_Richard_Hendry/536260194 Ian Richard Hendry

    Brightstation Foundation (subtly different name, same people) is also behind Smarta which, after the launch hype, has been struggling to maintain the same traffic levels.

    http://siteanalytics.compete.com/smarta.com/

    Ian Hendry
    CEO, WeCanDo.BIZ
    http://www.wecando.biz

    • http://www.smarta.com @smartamatt

      Er, thanks for dragging Smarta into this one, Ian!

      To clarify, Smarta is not part of Bright Station Ventures (or Foundation) and never has been.

      Smarta is an independent Ltd founded by Shaa Wasmund (CEO of Brightstation). Dan Wagner is a non-executive director along with several other directors and investors completely unconnected to Bright Station.

      I’m inclined to suggest you check your facts before taking pops at other companies in a vain bid to promote your own.

      Then again, instead, how about we try and work collaboratively to support each other? At least that’s what we believe in…

      • http://www.facebook.com/people/Ian_Richard_Hendry/536260194 Ian Richard Hendry

        I was going on this Matt:

        http://www.brightstation.com/bsf/projects.html

        I’m left a little confused as to BrightStation’s involvement, as you say none — other than the same CEO and a director — but that website lists Smarta as a BrightStation Foundation “project”.

        Ian Hendry
        CEO, WeCanDo.BIZ
        http://www.wecando.biz

      • http://www.smarta.com @smartamatt

        Ian, please see my reply below to notdanwagner

  • http://www.reallypractical.com Mark Nagurski

    I don’t know enough about Shiny to comment on their business in particular but the idea that media properties can sustain large overheads based on advertising alone is surely the issue here.

    Yes blog networks and other online media can make money through ad revenues but with the CPM rates as they are, it has to be run on a very low cost base.

    Blended and diversified revenue models – including offline revenue streams like events – would tend to make a lot more sense.

  • http://www.stradbrokeadvisors.com Inmaculada Martinez

    An investment of $4.5m points to me a quite high valuation, if the founders managed to still retain a decent portion of their equity. If the financial expectations on the business began to fail, aka no sight of potential acquisition of the company, this would have been seen a while long ago. What is worrying is the Brightstation Ventures and the company’s management were too slow to adopt new business models that could have (a) save the business (b) attract the bridge-financing of new investors who would have seen the excellent value that ShinyMedia had where it comes to its content and number of readers.
    Some businesses do start off with a semi-delusory idea of how they are to make revenue and then, when markets turn against them, are savvy enough to turn things around to survive.

    Shame for ShinyMedia’s management and shame for their investors as well. Lessons should be learned (and be made public) for others to learn.

  • http://www.haimediagroup.com Lisa Devaney

    Having worked for/gone through previous content experiments, I think this might not be the last of Shiny Shiny and its team, who can go on to emerge something even more shiny and exciting, with the learnings they’ve achieved.

    While many US blogs/content sites are showing success now (like DailyCandy.com, Epicurious.com, BoingBoing.net) the trail of great ideas, first trys and early stage start-up bankruptcy filings is thick with lessons learned. Having worked with CondéNet web properties and watched the closing of Swoon.com & Phys.com (and so so many others) during the dot bust era, the experience of demise is only the beginning of new successes.

    Those involved with Shiny Shiny just might go on to crack the content model for UK audiences. VCs would be smart to rally toward investing in the former Shiny Shiny team’s next big idea, whatever it may be.

    Good luck to them, may they keep on sparkling like the world’s most humongous glitter ball.

  • Iain McDowd

    It was obvious from day one that a few ugly blogs plastered in Adsense ads earning $.02 per click were never going to generate enough money to pay the staff AND the rent on a huge office in Covent Garden.

    The directors ought to be thoroughly ashamed of burning through so much cash so quickly, even if they didn’t receive anything near the $4.5m previously quoted.

    I did enjoy reading some of the Shiny sites, that is, when I could be bothered waiting for the abysmal templates and horrific flash ads to load.

    • Stefanio

      Iain, you are absolutely 100% right. Had they gotten a proper sales team together and sold some actual ads, they’d at least have hung in a while longer.

      The muppet above you pushing his fresh and exciting ‘widget’ concept is exactly what’s wrong with monetising blogs. No Alex, taking a ‘widget’ to ad buyers is a fucking stupid thing to do. What Shiny needed to do was to get a team together, get a rate card and a media pack and sell in the sites.

  • Mark Witter

    I’ve never heard of Epic Win before – how new are they? I also don’t see their business model. Some interesting ideas there though. SM were all smoke and mirrors. They came into present to us once and it was a bit of a joke…

    • http://epicwinmedia.com Tom

      Very new. (3 months since our first site launched)

      As for a business model – we’re working that out as we go!

      We are completely bootstrapped, no investment, no offices, so we have no risk of going the way of Shiny. We just want to write cracking content and grow the network. If you want to know more about our monitisation strategy, – mail me! And anyone looking to perhaps hook up fome former shiny siter – Stefanio – get in touch!

  • Stefanio

    Mark, where do you work?

    I am working with a couple of former shiny sites that have huge potential and cracking demos.

    They are the good sites that were bought by Shiny, then sold as Shiny didn’t pay its bills to the former owners.

  • Mark Witter

    At the BBC for my sins

  • notdanwagner

    @smartamatt

    So apart from the Director, the Founder, the appearance on the Brightstation website, the apparent claim to funding and the fact that Brightstation owned the Smarta name before Smarta was launched we can be assured that they have nothing to with each other.

    Thanks for clearing that up.

    Why would an organisation organise itself like that?

    • http://www.smarta.com @smartamatt

      Ian Hendey, notdanwagner

      Smarta is referenced on the Brightstation site because at the time she started working on it, Shaa Wasmund was still CEO of Brightstation and just wanted to get the word out there. Admit it’s now confusing, which is why I was keen to clear up the truth, which is:

      Smarta is not and never has been a Bright Station company and has never received any funding from it.

      As such, it’s fairly irrelevant to the conversations about BSV’s investment in Shiny.

      Matt

  • Matt

    Shiny had good writers and some excellent content, but the design was too rough and ready for the casual browser. US readerships are easy enough to attract with decent writing, but bloggers do need to know that the US represents a broader spectrum of interest, I agree with the Epic Win Media comments, there’s room for niche, but not to the point of geekery, smaller networks are flexible enough to make this work-it’s not over, and it’s no longer an experiment, it’s a workable, profitable business model, but one that requires a lot of audience research and interaction.

  • http://koodos.com Miriam Lahage

    Just want to clarify the Brightstation does not have an investment in koodos. Dan Wagner is a koodos non-exec director, but koodos has no involvement with Brightstation and never has.

    I agree with Alicia–this was a smart, passionate, and hard-working team that created something special.

    Miriam Lahage
    CEO
    koodos.com

  • waltermitty

    Bit of a spartacus moment here. “I am NOT FUNDED BY BRIGHTSTATION”.

    So @smartamatt, it’ll be coming off the brightstation website, then? It’s not the flagship project of brightstation ventures?

    Anyone want to admit that they are? After all, it’s a £100m fund, according to “reports”. Unless they want to clarify that.

    Smarta is only relevant to the Shiny story in that it illustrates how brightstation works.

  • http://www.stuartdredge.com Stuart Dredge

    It’s very sad news, for the founders and anyone who ever worked for the company.

    I freelanced for Shiny a while back editing Tech Digest and writing for other sites, and they were great bosses. A lot of people got their first experience of blogging working for Shiny, and discovered a lot of really talented writers – many of whom had no ‘traditional’ journalistic background – who’ve since been poached to work elsewhere.

    Without burbling on about legacies and sounding like an arse, I think that’s one of the lasting impacts of what Ash, Chris and Katie did, and has certainly benefited the UK industry.

    But Mike, there’s a really good TC article in all this – what did Shiny do well and what mistakes did it make, and what are the UK blog networks mentioned elsewhere in this thread doing well?

    In other words, what’s needed to make a go of it in the UK right now – and particularly how do you keep costs down while still establishing credibility with the media buyers? What’s the best approach to sales and the commercial side, given that a lot of bloggers and blog networks come from an editorial background?

    That’s the bit I’m hazy on, anyway. There are surely good lessons to be learned from Shiny’s achievements and mistakes, as well as from the good things being done by other networks and blogs.

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