What Occurred To Cameo? | Startups.co.uk 

Ever dreamed of private recognition out of your favorite singer, actor or web character?

Properly, that’s precisely what Cameo was made for. Prospects can use its on-line platform to buy personalised video messages from a variety of celebrities – requesting private shoutouts for various events, corresponding to birthdays, anniversaries, graduations or simply for enjoyable.

However issues behind the scenes have been something however enjoyable for Cameo. Whereas the corporate was thriving in the course of the COVID-19 pandemic – reaching a valuation of over $1 billion in 2021 – it wasn’t lengthy earlier than the novelty started to put on off and demand for personalised movies began to dwindle.

Because of this, the corporate laid off round 167 staff in 2022, earlier than downsizing once more the next yr. Its workforce shrunk from practically 400 to fewer than 50 and its valuation suffered, dropping by a staggering 90% after a $24 million (£19.44 million) funding spherical.

The state of Cameo’s enterprise is a far cry from its glory days in the course of the pandemic, however is declining demand actually in charge for its downfall?

Market saturation

Market saturation occurs when a services or products has reached its most potential available in the market, leading to diminished development alternatives.

For Cameo, whereas it popularised the idea of personalised video messages, it wasn’t lengthy earlier than opponents joined the scene. Platforms like Fanmio and Memmo started attracting celebrities and customers, which shortly ruptured the market and Cameo’s distinctive enchantment began to put on off. 

Opponents additionally began to increase their choices. For instance, Fanmio started internet hosting particular occasions and promotions throughout the US, together with numerous boxing occasions and the Arnold Sports activities Pageant in 2023. This created lots of buzz across the model, leaving Cameo shedding its foothold.

Lack of superstar engagement

Celebrities are busy (and costly) individuals, and a few grew to become much less accessible to fulfil requests on account of their schedules shortly filling up, resulting in delays in delivering the movies. The standard and energy put into these movies additionally trusted the person superstar’s enthusiasm and willingness to have interaction. This induced lots of frustration for Cameo’s clients, a few of which have reported no-shows from celebrities and poor customer support on the corporate’s Trustpilot evaluations.

Furthermore, because the leisure business tailored post-pandemic, many celebrities shifted their focus again to conventional work, and so simply didn’t have the time for Cameo anymore. It was reported that over 10,000 celebrities joined Cameo in 2020, producing over 30,000 hours of content material altogether. 

As of April 2024, this quantity has elevated to 50,000, although given the unfavorable Trustpilot evaluations and the corporate’s mass layoffs, this hasn’t helped to enhance consumer belief or buyer expertise.

Authorized troubles

Cameo expanded its enterprise mannequin in 2020, together with the launch of Cameo for Enterprise, which might permit firms and types to buy personalised movies from celebrities for advertising functions. It was designed to draw companies trying to incorporate superstar endorsements into their advertising methods, and types might request them to advertise their companies, promote particular occasions or use the movies for buyer engagement and social media campaigns.

Nevertheless, this enlargement would solely land the corporate in authorized bother. In July 2024, the corporate was discovered to have breached Federal Commerce Fee (FTC) guidelines surrounding superstar endorsements, which require influencers and celebrities to reveal any connections they’ve with manufacturers when selling services or products. 

Cameo was fined $600,000 (£486,000) by the FTC for failing to adjust to these guidelines. Based on a settlement settlement reported by New York Lawyer Basic Letitia James, it was unable to pay the unique tremendous and agreed to accept $100,000 (£77,066). The settlement additionally included a provision that allowed the state of New York, plus 29 others concerned, to pursue the unique quantity if Cameo fails to pay the $100,000 throughout the subsequent three years.

New compliance measures had been additionally imposed, together with a watermark system to determine movies booked, necessary acknowledgements from manufacturers and celebrities relating to endorsement guidelines and a system to observe compliance successfully.

Pricing points

Celebrities might set their very own charges for personalised video messages. This meant video messages might price as little as £5 to a number of thousand kilos. This led to inconsistent pricing, the place some customers felt overcharged for movies that didn’t meet their expectations, whereas others questioned why sure celebrities charged a lot.

For instance, a consumer on Reddit claimed that it had price them £90 to get a Cameo video from pop-rock band Bastille. After their request was cancelled, costs for a personalised video from the band began to rack as much as practically £300. In the meantime, one other consumer reported {that a} Cameo from American media character Caitlyn Jenner price $2,500 (£1,926).

Moreover, because the financial system modified, notably with inflation and the cost-of-living disaster, spending on companies like Cameo grew to become tougher to justify. What was as soon as thought of a enjoyable splurge in the course of the pandemic started to really feel much less essential. This, together with the notion of overpriced movies, led to a decline in repeat purchases and consumer engagement.

Altering shopper preferences

Buyer wants and preferences are all the time altering and for Cameo, the novelty of personalised superstar video messages merely wore off. In 2020, the corporate’s buyer base grew by 250% year-on-year (YoY), whereas additionally hitting a milestone of over 2 million app downloads.

Cameo’s enterprise mannequin labored in the course of the pandemic as individuals had been on the lookout for artistic methods to rejoice and join with others. Nevertheless, as restrictions eased and conventional types of leisure and social interplay returned, the demand for these kinds of companies declined. 

Furthermore, clients began gravitating in the direction of extra interactive and real-time experiences on platforms like TikTok, Instagram and Twitch, the place they might have interaction with celebrities and influencers immediately – making Cameo’s pre-recorded messages really feel sub-par as compared.

The failing NFT market

Cameo made strikes into the non-fungible token market (NFT) in 2021. On the time, NFTs had been booming – hitting $25 billion in gross sales. The corporate ventured into this area to attempt to diversify its income streams and capitalise on the rising curiosity in digital collectables.

Cameo Move was launched as a group of NFTs that supplied followers with unique entry to sure perks, corresponding to superstar meet-and-greets, non-public digital occasions and distinctive content material. The NFTs had been marketed as membership tokens, giving holders particular privileges throughout the Cameo ecosystem. 

The issue was that the NFT market was quickly flooded with new initiatives in 2021 and 2022, resulting in oversaturation. This meant that Cameo’s entry into the area didn’t stand out amongst extra established NFT platforms like OpenSea or Binance. That, and the unique hype surrounding NFTs started to die down. Many initiatives have seen a steep decline in demand and worth, with 96% of NFTs now thought of to be “lifeless” within the crypto and Web3 area.

Cameo’s story from a pandemic-era sensation to a struggling platform is a tragic one however is a stark reminder of how tough it may be to keep up momentum in altering markets. As curiosity in personalised video messages fizzled out and competitors intensified, Cameo’s enterprise mannequin struggled to adapt. Whereas it’s nonetheless working now, its stark decline in its workforce and valuation actually raises questions on its long run viability.