A VZSCIFI project VZSciFi
Licensed Zone: Star Trek
Last Updated: 12th January 2000
 

The Proposal
- Avaterra Europe proposes to build a 'Closed Zone' for Star Trek fans within VZSciFi, which are accesed by subscription only. $20 per anumn.
- This Zone would be accessible via VZSciFi.com and at the Star Trek Continuum official web site. A user accessing the Star Trek Zone in VZSciFi would enter an area area of two locales offering information about the Star Trek Zone that has a pay door into VZStarTrek.
- When they choose to join VZStarTrek, the process would initiate the generation of a new avatar specifically for VZStarTrek. Their VZSciFi avatar would still exist but could not enter VZStarTrek proper.
- Although an up front fee for licensing deals is normal, Avaterra proposes this cost be offset against the cost of the build for the Zone, which we estimate at $100,000. This is a contradeal giving Viacom/PDE access to a VZone.
- Avaterra would aim to achieve a membership base a minimum of 75,000 within the first year creating a profit of $1,500,000, rising to a user base of 125K in the 2nd and 200K in the 3rd.
- PDE/Viacom would earn a royalty on all subscriptions. 1st year 40%, 2nd year 25%, 3rd year 15%. Producing revenue of 1st year - $600000, 2nd year - $625,000 and 3rd year - $600,000
- PDE/Viacom would earn revenue on click through sales of merchandise from the Zone and through premium rate rooms for special InWorld events. Monitored by Avaterra and PDE/Viacom. Avaterra require 3% on all transactions through the Zone.
- PDE/Viacom would be able to resell advertising into the VZStarTrek zone. PDE/Viacom ­ to receive 70% of sale and Avaterra 30%. If Avaterra sells into VZStarTrek, Avaterra to receive 70% and PDE 30%. (Projected: 30 advertisers each paying $10,000 per anumn = $300,000).
- Additional premium services will be catered for inside the zone allowing additional revenue to be charged for special events.
- The normal upfront payment for a license is negated by the build cost.
What do we want from Viacom/PDE?
- A link from their front page to VZStarTrek web page/or into the VZStarTrek Zone
- We require unmetered access to Star Trek art in order to build the Zone, with Viacom/PDE approval. Avaterra would require access to art files and imagery from the Star Trek:Voyager design team, in a similar way that materials are made available to other licensors.
- We require access to Star Trek licensors in order to cross market the Zone and licensed merchandise.

Zone Design

- Working with PDE and with the usual approvals process in place, Avaterra would build a Star Trek Zone focussed on a popular Star Trek location and incorporating elements from the Star Trek universe utilised by the more recent Star Trek series.
- The Zone could be based on a fictional Starbase or starting from the Earth-based Starfleet Academy.
- The members would not be able to to look exactly like series characters but they would be able to select their identity from a core of Star Trek races, such as Human, Klingon, Ferengi, Anataran and Vulcan (the humanoid form for most Star Trek races).
- The initial zone would consist of locales on Earth, a Starbase, a starship - perhaps based on the USS Voyager but not that specific ship, and four planets.
- The Earth locale would include e-commerce links enabling the sale of merchandise,  linked to any sales point within the Star Trek Continuum.

Zone Maintainance
- Avaterra would be responsible for the arrangement of appearances by actors and creative personnel, costs to be recouped through premium rate area charges.
- The Star Trek Continuum would publicise as well as licensed Star Trek publications.
- Avatera would seek to refesh and extend the Star Trek zone in response to member demand and suggestions, adding new races, locales as revenue levels rise.
- Avatera would employ a World Manager to maintain and co-ordinate the zone, which would be run in the same manner with regard to etiquette, member activity etc as the existing VZones.

Points of note
- There would be no two way traffic between VZStarTrek and other VZones, negating concerns about matching of genres.
- Both sides would need some sort of fallback in case development of the zone was running slowly because of delays to approvals, cutting into the upfront fee. We wouldn't want to be in a position where we had paid a large up front fee and it took maybe nine months to develop a zone and then be expected to pay another annual fee. (This is a problem some software house have gotten into in the past).
- It may be that there could be a third party involvement here given Activision's (?) 10 year deal to create Star Trek related computer games

John Freeman
13th January 2000


The Background : Paramount Digital Entertainment
Avaterra have had several meetings with Paramount Digital Entertainment with a view to forming some sort of partnership based on Star Trek. In late November 1999 Eric Diamond and I headed a useful meeting with several PDE representatives, including Business Development Manager Chris Tragos.
In January 2000, having been asked to follow up on this most recent discussion I called Chris Tragos with a view to following up the meeting. He explained that PDE was in the throes of major reorganisation and they felt unable to take on any new aspects to the offcial Star Trek Continuum site because of this. He added that he needed to be convinced that any partnership between PDE/Paramount and Avaterra would generate income for PDE before progressing further.
I offered to submit an outline proposal to him prior to a new meeting in February, when I plan to be out in LA for the big Gallifrey 2000 convention. He was receptive to this.
The bottom line appears to be that PDE would probably take up the idea tomorrow if it was seen to be generating revenue for them and justifying the cost of their spending time monitoring a zone build. With this in mind, it seems some form of licensing proposal is our best way forward, but one in which any advance against royalty is offset against our cost of such a build - a version of Viacom Licensing's normal contra deals.
The average royalty percentage on licensed Star Trek property products ranges considerably but is usually not less than 10 per cent. In addition, a licensor would expect a one off payment up front, plus royalties. Royalties are paid on a monthly basis and Viacom have their accountants do an annual audit of any ledgers relating to the licensed product.