Greater broadband access among blacks, Latinos spurs start-up of new sites

By Catherine Holahan
BusinesWeek.com
(November 13, 2007) When entertainment entrepreneurs Russell Simmons and Navarrow Wright first developed an online destination for hip-hop music and culture eight years ago, the World Wide Web wasn't ready. White North Americans were logging on in record numbers, but the African American and Latino communities that birthed the hip-hop genre in the 1970s, by and large, were not. There was a so-called digital divide separating urban youth, many of them nonwhite, from their wealthier, often white, counterparts. Hip-hop was on the wrong side of that divide. Until now.

New numbers from the Pew Internet & American Life Project, scheduled for release Nov. 14, show the gap is closing as more black, Hispanic, and inner-city youth are not only logging on, but doing so via high-speed connections. The shift isn't lost on hip-hop entrepreneurs such as Simmons and Wright, who have launched multimedia-filled social Web sites that reflect the music, news, and culture relevant to urban minorities.

The goal is to attract audiences that may feel underserved by mainstream social networks such as News Corp.'s (NWS) MySpace and Google's YouTube, where millions of users submit content on a variety of subjects. "Back in 2000, we knew that it was very early stages and that they weren't online en masse," says Wright, who sold his earlier site 360hiphop.com to Viacom's (VIA) Black Entertainment Television in 2000. "We think the timing makes sense now."

Speedy Content
In September, Wright launched Global Grind, which pulls together blogs, video, articles, and other content that's likely to appeal to hip-hop fans. Recent features include an entry from the Young Black Professional Guide blog and a video clip from a series titled True Hip-Hop Stories. The site encourages users to import and upload content from other Web destinations such as YouTube and Yahoo!'s photo-sharing site Flickr. It also lets users find and play MP3s from the Web. In short, much of the content requires a broadband connection.

The emphasis on high-bandwidth content reflects the changing profile of the U.S. Internet audience. Nearly 50% of Americans now have high-speed home access, says Susannah Fox, associate director at Pew, up from 47% in June. Fueling that increase is the fast adoption of broadband by African Americans, 40% of whom have high-speed connections at home, and Latinos, who are more likely to have high-speed access than a dial-up connection.

Of the 29% of Hispanic adults who have an Internet connection, 66% opt for broadband. People living in urban communities are now even slightly more likely than suburban residents to be online. "African Americans are very often skipping the dial-up step and going straight to broadband," says Fox. "And Latinos, though less likely to be online in the first place, are just as likely to be on broadband once they are on there."

VCs Join the Party
Simmons and Wright aren't the only entrepreneurs catering to this broadband-enabled population. A host of Silicon Valley venture capitalists are teaming with hip-hop entrepreneurs to launch multimedia-rich social sites targeting urban youth. Global Grind is backed by Facebook investor Accel Ventures and Island Def Jam Music Group's Simmons. Then there's DanceJam, a YouTube-like video site dedicated to dance, founded by Stanley Burrell, aka rapper MC Hammer, and a couple Silicon Valley startup veterans. DanceJam is backed by Google investor Ron Conway and TechCrunch's Michael Arrington, among others (BusinessWeek.com, 11/6/07). The site launched Nov. 12.

Last year, Damon Dash, one of the co-founders of hip-hop brands Roc-A-Fella Records and Rocawear, launched BlockSavvy.com. The invitation-only social network, which lets users create 3D virtual rooms highlighting music, movies, art, and other media, already has more than 10,000 members (BusinessWeek.com, 10/4/07).

Longevity and Creativity
This latest raft of sites joins an earlier wave of hip-hop-friendly destinations that remained viable over the long haul. News site AllHipHop.com has delivered news and music reviews since it was founded in 1998. It and other sites owe their longevity in part to the large community of hip-hop fans among whites. Roughly 75% of the fans of hip-hop culture, music, and fashion are not African American, according to Simmons and Wright, who hope their ventures also cater to the larger hip-hop community. But even the existing sites have become increasingly multimedia-heavy as more of hip-hop's core audience has come online.

AllHipHop.com, for example, has changed from a largely text-based news site to a complete multimedia destination that prominently features photo slide shows and video interviews.

In addition to the high rates of broadband adoption across ethnic minority groups, young people across these groups go online via a high-speed connection at even higher rates, says Fox. Either they have broadband at home or they use high-speed connections in local libraries and schools to surf the Web.

Wright believes all members of the hip-hop community will be able to use his site. "We know this demographic is much more creative with how they get access to the Internet—if they don't have it home, they have it at their school or their local library," says Wright, "and more and more they are getting access at home." 


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