BitMagic

» see bitmagic.com as it lived, on the wayback machine

~ the obituary ~

BitMagic's homepage pitch survives in full and it is a better summary than anything written about it since. "Get entertainment delivered to you every day, fast, and free of charge. A specially designed, easy-to-use player enables you to experience animated cartoons, games, and tons of other entertaining stuff. All it takes is just two or three minutes a day. It's a great little waste of time!"

The mechanics: a 700 kilobyte player you downloaded once, which then docked in the Windows 95 and 98 taskbar and fetched a new piece of content on a schedule. Everything inside it was built in Macromedia Director and Flash, licensed from Macromedia, and the copyright footer dutifully thanks Shockwave and Flash by name. A fresh batch landed at 7am Eastern, and again at noon GMT so Europe got its own drop rather than yesterday's. The content was short cartoons with short commercials cut between them, plus licensed games.

Michiel Frackers and Francisco van Jole started the company in Amsterdam in June 1998, with a San Francisco office on the masthead from early on. Frackers had co-founded Planet Internet in 1995 and was by this point a known name in Dutch tech. Roel Pieper put together a $3m seed round that August Capital's Andrew Anker joined, and by the time anyone wrote about it in August 1999 there were 8,500 users who had arrived through word of mouth alone, before the company had spent anything on promotion. Heineken and Mitsubishi Europe bought the early advertising, and BOL.com signed a marketing partnership in March 2000.

~ the case file ~

~ the download problem ~

Here is the arithmetic that sank it, and it is worth doing because it applied to most of the world outside American cable. I was online in 1999 on a 33.6k modem on a Turkish line, which in practice moves about three and a half kilobytes a second on a good evening. A 700 kilobyte player is therefore three or four minutes of downloading, assuming the connection holds, to earn the right to receive two or three minutes of cartoon per day thereafter.

Nobody in Amsterdam was being stupid about this. In 1999 a resident player was the only way to deliver smooth animation to a desktop, because the browser could not yet do it and streaming video over a phone line was not a product. The company bet that the install would stop being a barrier before the money ran out. It did stop being a barrier, several years later, which is a different thing from winning the bet.

~ the pivot ~

By January 2001 the site had been rebuilt and the entertainment language was gone. The navigation now read HOME, TECHNOLOGY, PRODUCTS, BENEFITS, EXAMPLES, CLIENTS, PARTNERS, COMPANY, CONTACT, BITPLAYER. The press kit's showcase was no longer a cartoon but a "Desktop Financial Player" demo. The same taskbar component that had been shipping jokes to consumers was being sold to businesses as a channel for pushing data to their staff.

That is a real product and a reasonable thing to try with the asset you have left. It also takes eighteen months of enterprise sales to produce revenue, and the trade press reported that BitMagic was booking almost no revenue at all through the first months of 2001.

~ the wednesday afternoon ~

The company filed for surseance van betaling, the Dutch suspension of payments, in Amsterdam in the first days of June 2001; Telecompaper reported it on 5 June. Three days later Emerce reported that the court had converted it: "Woensdagmiddag is Bitmagic definitief failliet verklaard." Wednesday afternoon, 6 June 2001, definitively bankrupt. The eleven remaining employees lost their jobs that day.

The shareholder list in that filing is a short history of Dutch internet money. Frackers held about a third. Roel Pieper was in, as was Amstelvision, as was Felipe Rodriguez, who had co-founded XS4ALL. The staff held fifteen percent between them, which on 6 June 2001 converted into nothing. Over ten million guilders had gone into the company since 1998.

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