IP: Some more on lotto

[Dave Farber <farber () cis upenn edu>]

From: Peter Jensen <magical () netaxs com>
To: "Dave Farber" <farber () cis upenn edu>


> They probably bought an insurance policy from Lloyds for a couple of
> thousand bucks. Nobody is going to be able to correctly guess a 16-digit
> number.


Dave -

With all due respect, they are not entirely correct.  While the 
possibility of correctly guessing a 16 digit number is remote, the 
insurance policy was not cheap at all, and in fact required the two 
largest underwriters (SCA and American Specialty Underwriters) who 
normally are competitors, to jointly underwrite the policy.  In addition, 
the costs of bonding this promotion in the state of New York alone is 
$30,000.  I assure you, this has been very expensive to set up and 
insure.  The high cost of the insurance policy is based on the belief of 
the underwriters that the sheer expected volume of players makes it 
likely that at least the $2,000,000 prize level will, in fact, be 
awarded.  This, of course, doesn't even consider the costs of programming 
and hosting (at a T-3) to handle the traffic, or the new Sparc purchased 
to handle this promotion.

One thing to remember, Dave, is that, unlike a lottery, where you must 
pay money to have a multi-million-to-one shot of winning, here you don't 
have to pay a dime.  In addition, we have paid hundreds of thousands of 
dollars in prizes this year, alone, and have set this promotion up so 
that prizes won will absolutely be awarded.  Unlike many so-called 
promotions seen today on the web, we have gone to considerable trouble 
and expense to insure that this is solid and that if someone wins, they 
will be paid.

While we might reasonably debate the whole business of promotion and its 
implication, it is certainly huge.  In the retail world, promotion in 
1998 was a 70+ Billion business, and it is certainly coming to the Web.  
I have indeed seen our own online business expand to include most of the 
major e-commerce companies on the Web.  Microsoft, Yahoo!, Lycos, Ford, 
and many others are coming to us to create online promotions to help 
build their businesses.  Certainly none of our partners in this promotion 
would have joined had they not believed this would vastly increase their 
traffic, which it certainly will do.

Please let me know if you have any other questions.  You can find a lot 
about us at:

http://realtimemedia.com

As always, my kind regards, and thanks for the wonderful work you are 
doing.

Peter Jensen
President
RealTIME Media Inc.
15 Haverford Station Road
Haverford, PA 19041 

610-896-9400 ext. 21

Cell phone:  610-662-3648

http://www.realtimemedia.com
The LEADER in Internet Promotions!