Cityspace
In 1992, a friend, Brendan MacNamara, who wanted to develop an interactive information service for the Sydney Tower in Australia, approached Meyohas. Meyohas adapted the concept and who men formed a preliminary business plane for “Citysapce,” which was to focus on the Parisian tourist market. They put together a business plan, but were unable to raise sufficient funds and ultimately abandoned the project.
Despite this setback, Meyohas remained convinced of the potential for developing a profitable information service for tourists.
The i+ Service
Cityspace`s core concept was simple. By presenting tourists with an interactive system that would provide information about popular attractions, event and places to shop or eat, they hoped to entice users to make bookings and advertisers to sponsor segments of the product.
Although at the time the i+ was only available on a kiosk platform, management emphasize that the service was largely independent of the platform.
The Kiosk
Although Citysapce believed that its service was substantially platform-independent, it was clear that for the venture to succeed, the first platform the stand-alone kiosk would have to succeed first.
The start screen of a Citysapce`s kiosk offered the user a choice of six languages: English, German, French, Italian, Spanish and Japanese. With a language chosen, i+ would automatically advance to a second screen, offering four basic categories of information. Eating out & Drinking. Cityspace`s database contained information on over 1,000 restaurants and bars in London. User could search by location, price range, or the type of food or atmosphere they were looking for. What`s On. This category featured the popular musicals, show and concerts in and around London. User could see video clips of some of the most popular show. Sightseeing-showed all of London`s top attraction, often with either still picture or video clip. User could ask for an alphabetical listing, or ask for a list of attractions in a particular area in order to focus their search on where they expected to be. Shopping-a database of roughly 200 popular London stores sorted by category, locations and price range.
Advertising
Cityspace felt that its i+ service offered a powerful advertising vehicle. Since only tourists would be likely to use service, almost every contact would be an ideal target-an individual with money to spend, looking for specific information. With advertisers able to customize their content, and with information printouts increasing the likelihood that a user would follow through and purchase, Cityspace believed it could charge a premium fee for access to its users.
Although Cityspace intended to list all of the most popular show, attractions, restaurant, etc.., on its service, not all listings were equal. Sponsors could pay to ensure that their listings were more likely to be seen and, hopefully, to be selected by the tourist.
The i+ service was separated into four categories of advertisement. First, a single premium Sponsor would appear on the main display page, along with a dedicated page displaying its service. Thomas Cook, London`s largest foreign exchange provider, had already signed a sponsorship contract for £1,000 per kiosk per year.
Bookings
Current usage
Since each of the kiosks was centrally linked to Cityspace`s central network, tracking usage detail was relatively simple. An average kiosk was used 65 times per day, generating a total of roughly 50,000 uses per month. There was, however, considerable variation depending on location, with some kiosks generating over one hundred uses per day, while other had considerably fewer. Average time per use was 3.5 minutes, and the average user looked at two of the four main categories and five total listing.

Adding New Platform
Cityspace believed that one of the core strengths of the i+ service was that it could be easily adapted to new platforms. Two that the company was particularly excited about were Hotel TV and the Internet.
Hotel TV
Most London hotels offered an in-hotel TV service that include some free features(such as automatic checkout)and pay movies. Not all in –hotel TV system could support the i+ system, but most of the major hotel groups were upgrading their system to allow video on demand and games. Cityspace had spoken with system suppliers and was confident that these more advanced system were capable of supporting i+.
Cityspace expected to generate advertising revenues from hotel users comparable with those of kiosk users. For bookings, the company had project an average of 14 bookings per240-room hotel per day by the year 2000, rising to 20 booking per hotel per day by the year 2003.
Internet
Cityspace was in the process of developing a fully interactive web site that would support transaction and bring the entire i+ service to the internet. The company hoped to establish their site as a leading source of information for incoming tourists as well as to encourage visitors to London to book tickets and tours in advance. The company recognized, however, that while the potential of the internet was vast, competition was already high and the barriers to entry that might exist for the kiosk and hotel TV platforms were not present.
Costs
Cityspace had developed extensive cost projections as part of its business plan, based on variable costs associated with the revenues it hoped to generated as well as fixed costs needed to develop and operate the service.
Citysapce`s anticipated direct costs included the share of revenues given to the hosts of its sites, as well as commissions paid to agencies who secured advertising revenue for the service, as well as various other costs associated with running the system, such as bank charges for handling bookings. Cityspace estimated that these costs would be fairly stable as a percentage of revenue by the year 2001, representing roughly 50% of total revenues.
Cityspace`s central costs were largely fixed. They consisted of compensation of management and key employees, rent and utilities, and legal professional fees (such as annual audit) associated with running the company. Cityspace had also estimated the operating costs associated with each of its platforms as they came on-line.

Assignment Questions:

What is the opportunity for Cityspace?
Over three million tickets are sold to London tourists each year in a highly fragmented retail market that leaves visitors poorly served. Over a third of overseas visitors still book in person at the venue, rather than through an intermediary. Even if only added value was to eliminate the need to wait in line to buy tickets, the service would be useful.
Cityspace works on behalf of transport authorities and operators to transform multi-modal transport data into relevant and easy to digest information. We then deliver this information through kiosks and screens to enable the travelling public and transport professionals to make informed decisions.
Since each of the kiosks was centrally linked to Cityspace’s central network, tracking usage details was relatively simple. An average kiosk was used 65 times per day generating a total of 50,000 uses per month. Average time per use was 3.5 minutes, and the average user looked at two of the four main categories and five total listings. Cityspace could also demonstrate that buying advertising significantly improved the chances of a site being looked at in detail.
Cityspace offers a variety of hardware products to suit customer needs, bringing together digital information and data feeds from transport authorities and third parties to deliver travel information services which meet the needs of people on the move.
The I+ service could be easily adapted to new platforms. Two that the company was particularly excited about were Hotel TV and the Internet. Most of the major hotel groups were upgrading their systems to allow video on demand and games. Cityspace had spoken with system suppliers and was confident that these more advanced systems were capable of supporting I+. Ten thousand hotel rooms already had these advanced systems installed.
Cityspace expected to generate advertising revenues from hotel users comparable with those kiosk users. For bookings, the company had projected and average of 14 bookings per 240-room hotel per day by the year 2000, rising to more bookings per hotel per day in future.

What is your assessment of the business model?
In my opinion, Cityspace has great business model. By presenting tourists with an interactive system that would provide information about popular attractions, events, and places to shop or eat, they can get margins through to entice users to make bookings and advertisers to sponsor segments of the product. The I+ service offered a powerful advertising vehicle. Since only tourists would be likely to use the service, almost every contact would be an ideal target—an individual with money to spend, looking for specific information. With advertisers able to customize their content increasing the likelihood that a user would follow through and purchase, I believed Cityspace could charge a premium fee for access to its users.
There are eight essential areas to every business model Must have excellent margins Must be easy to sell Must have The Four Capitals©: Intellectual Capital, Financial Capital, Human Capital and Brand Capital Must be able to maintain ongoing competitive advantage Must have quality customers Must have longevity of the industry Must provide for the owner’s graceful exit Must avoid pitfalls