Investing in Facebook: John Corpus of Milyoni
This week, Inside Facebook asks people who have built businesses on the Facebook platform why they believe in the company. These are the people that are truly invested in Facebook, whether or not they bought stock.
For Part 2 of our series, we spoke with Milyoni founder and CEO John Corpus. Milyoni is the Facebook commerce and social entertainment company best known for making films and live events available for streaming on the social network.
Seeing the potential of Facebook
Three years ago when Corpus was CIO of Mervyns department store, he saw the rapid growth of Facebook as an opportunity for commerce. At the time, the social network had about 150 million users. Although that is far less than the more than 900 million using the site now, it was a major milestone in 2009. Corpus says the growth was especially interesting when compared with trends showing that online display and search conversions were declining.
“The three rules of retail are location, location, location,” Corpus says. “Facebook was where people were spending more time.”
He says it was the amount of interaction and the speed of sharing happening on the site that stood out and led him to want to build a company on the platform.
Developing a business idea
When Corpus founded Milyoni (pronounced “million-eye”) in February 2009, the company was focused on helping businesses sell physical goods. Milyoni offered the “iFanStore,” an e-commerce platform for Facebook, Twitter and MySpace. It was one of the few e-commerce apps that let users stay within Facebook during an entire transaction and then share their activity with friends.
The company gained a lot of entertainment-focused clients, including HBO, the NBA, UFC and The Onion. These companies were selling things like t-shirts and DVDs through the app. But Corpus says that a conversation with Warner Bros., at the end of 2010, led to a whole new market: digital goods.
Milyoni and Warner Bros. were discussing how video was incorporated in the app when an executive asked whether a full feature could be shared on Facebook. The companies decided to try it, and in March 2011, they made “The Dark Knight” available for streaming on Facebook with users paying for the rental using Facebook’s platform currency, Credits. The success of that test and others led Milyoni to develop what it calls “Social Cinema” for movies and “Social Live” for things like concerts and sporting events. The company is now primarily focused on these areas rather than selling physical goods through Facebook.
Confidence in Facebook
Corpus says Milyoni could expand to other platforms in the future, but for now it’s focused on Facebook.
“This is not a fly-by-night type of business,” Corpus says, pointing to Facebook’s latest user numbers and engagement statistics, which includes 300 million photo uploads and 3.2 billion Likes per day. “From a foundational standpoint, they’re here to stay.”
Milyoni’s own success on the platform is further proof for Corpus, who says Facebook users have watched more than 700,000 minutes of Milyoni content in the past three months. The company now offers more than 150 titles from 16 studios available on Facebook, and it plans to bring 700 more titles and 30 more live events to the platform this year.
To capitalize on the social network’s growth in users and engagement, Facebook now has to focus on growing its revenue streams through advertising, mobile and commerce, Corpus says. Social games were a good start, but he says there is a lot more opportunity around social entertainment where studios and other content providers can connect directly with their consumers.
Facebook’s payments revenue was $186 million in the first quarter of 2012, up 98 percent compared to the first quarter of 2011 when Credits were not mandatory for social games transactions. However, most of that revenue is still from sales of virtual goods, not digital goods or experiences. Milyoni is one of the few companies helping to pioneer the use of Credits outside the realm of games. Corpus says the social network needs to do more to get users to understand Credits so that they are more comfortable using the currency and spending money within apps. He sites PayPal as an example of another company that took a few years before it was widely considered secure. Corpus says that making it easier for users to see and manage their Credits accounts could help Facebook in this area.
“They have to let people know it’s not just Monopoly money,” Corpus says. “They have to provide people with a level of confidence and security to make it a more trustworthy place.”
Read Part 1 of our series, which profiles Clara Shih of social marketing software company Hearsay Social.