377
points
Uzo0312
Joined 230 karma
- These are tremendous questions! Ones we need to continue to think through, but I can share our early thoughts...
1. Content cost: Generally speaking, and assuming capital raises, we will only buy content that our subscription revenues can sustain. And over time, we do intend to raise our price as the service gets better.
2. Product: Yes, the product is far from perfect. We wanted to get in market with content, and iterate on product as we learn. We're largely leveraging third-parties to hold this thing up, but we will make improvements just as any product does. In terms of it being a differentiator, it's just that different, not necessarily defensible. But the way the market sits, we're the only ones interested in doing that. But I get your point, it's not like Netflix has a game-changing technology advantage over all the companies chasing them.
3. Content diversification: We hope to have the most, and best, black content on the planet.
4. Lack of content: Yes, we're very early, and I'm worried about not having enough content. But we will continue to add to it as we grow. We definitely do not plan to stay where we're at, but where we're at does work for our super-niche demo w/in the greater black community at this point.
5. UX/filtering/etc.: Thank you for calling those site issues out. We aim to fix those this weekend!
6. Content sampling: Agreed. We should, and will, make it easier to do that. However, the 7-day free trial mitigates that to some degree. Additionally, people generally don't just land on our site/homepage randomly. They usually have seen a trailer or come through a landing page that features (and describes) a specific show.
7. Just be a curator: Netflix also had the advantage of doing this 10+ years ago, so we can't change that. The truth is that with today's number of options, you have to have content that people can't get elsewhere. Plus, as I've alluded to in the comments, working directly with creators has been a big part of acquiring subscribers for us, and will likely continue to be so.
- I'd say you have a fair point about the competition, but not about their being a lack of critical examination. A critical examination of the market would yield the fact that surveyed black viewers want more content targeted at them, don't feel fully represented even in the existing black content that's out there, and that despite an admittedly (and perhaps temporary) spike in black content, an estimated $10b in revenue is being left on the table due to the mismatch between the supply of black content and the demand for it by black viewers.
So yes, BET, and others, are going after this market. We looked at the landscape and decided there was something different we could do that wasn't just unique, but likely execute in a manner that the incumbents could not realistically pull off.
BET--to use your own example--is owned by Viacom, whose two biggest strategic revenue plays are growing Paramount+ and licensing their content/channels to other distributors. Thus, BET can never be all the way in on serving the black audience, as Viacom will always look to maximize a piece of content through the channel that makes it the most money--usually one of the two I just mentioned.
There's also the product side, where none of the incumbents have invested in, and the large players, have actually disintermediated themselves by selling through other products like Amazon and Roku channels. Now we haven't built out a differentiated product yet either, but it's on the roadmap and you can be assured that disintermediation is not a strategy we're interested in.
Yet I understand your criticism...this idea is not new, has lots of competition, and is late to a game that has already started. But no one said this would be easy, and we have a differentiated approach that we believe gives us a strong shot at success.
- Beautiful thoughts! Im taking note!
To your point, we are trying to be all of things... and I would add community to that list.
In terms of where we're starting, I'd say we've headed down the dual path of curator and studio. Five years ago, I think we could've been just a curator and come out earlier with a differentiated product. But today, with so many curated options out there, content differentiation was something we felt was key (and a part of our go to market).
With those paths, we offer creators at a certain point in their journeys they don't get elsewhere: investment. And at the same time, our viewers get to be among the first to discover new talent.
But like you said, we have lots to do to prove ourselves to many entities... so we know we have our work cut out for us!
- Thanks for your thoughts here! I'm definitely on the same page with you! Don't love labeling ourselves this way, but by having the "gatekeepers" of what goes on BlackOakTV look like the viewers we're targeting, it opens the door for a very differentiated content and platform experience.
- Yes! We've talked with that founder, and he certainly let us know it's a hard business. I think the important thing for us to find an audience for the content we're starting with. We identified a niche within black audiences that we think is particularly underserved, and we're trying to meet their demand. If we can get them, it gets us to a pretty decent level, and with that MRR, we can move into another niche, and then another, and then another...
- How are we selling and marketing ourselves as something we're not? No, we're not Netflix today--I think that's somewhat inherent in the fact that we're a startup here on HN. But we say that we're working with indie filmmakers and content, not high-budget Hollywood productions, so I think we admit where we're at.
- Generally, your points about capital and valuations are true. Of course, I could argue Netflix is way more capital intensive than any production company. And then, with Hello Sunshine and others, we're seeing production companies get Venture scale exits. So while I hear your point, those honestly weren't factors for us. It was more so about owning the relationship with the end-user.
- We certainly don't think this will be easy. That said, as you can probably imagine yourself, 13.5% of the U.S. population is a really big TAM on its own. That percentage of Netflix U.S. revenues would make us a very big company. That said, there is competition, and Netflix has black content too. So we will have to differentiate ourselves. As I mentioned in the post, product is one way to do that, and "super-serving" one audience can be a differentiator to when it comes to content, branding, and community. So yeah, we have our work cut out for us, but we're up for it!
- Yeah, the Netflix squashing us is certainly something we've thought through. We think there are 2 reasons we've got a good chance here though.
One, Netflix has to worry about competing with a lot of other major players, while also being profitable going forward, so they really can't over-spend on an audience that is likely underrepresented among their customer base relative to the global population.
And two, we think focus is big. Serving just one audience means we can do more things with content and product that Netflix couldn't do because black people are a small percentage of their base (not to mention the possible alienation as evidenced by this thread). Media is probably the industry where serving "niches" has proven the most worthwhile. We hope to follow in that trend!
- We do want this to be a global company. Obviously, we have to start somewhere, so the U.S., where we are, is a logical first step, but we already have content from outside of our region, and hope to expand that greatly in the months and years to come!
And yes, our site needs a lot of work in terms of the meta data. We're working on getting that filled in across the site as much as possible. Hopefully, the free episodes we made available have their descriptions in place!
- I can certainly see where saying "for black people" doesn't sit well with a lot of people. However, that's exactly who we're targeting with the content. That doesn't mean it has to be exclusive. Most of the lyrics in rap songs are generally by black people and intended for black audiences, but it doesn't mean other people don't love it, can't appreciate it, or shouldn't listen. It just means the artist wanted to reach a certain demographic, a demo that was also likely wanting to hear an artist that spoke to how they see and live in the world.
- That's a great point. I think both things probably need to be done. We took the distribution route, because ultimately we believe it's the direct relationship with the consumer that will allow for this to work. As a production company, you're a step away from the end-user, so you're at the mercy of a distribution company that has more than just the black audience to worry about. But if a company is solely focused on a single niche, like so many tech companies out there, the economics for super-serving that niche are a lot better.
Second, I 100% understand how BET is owned. I don't think anyone on Wall St. cares when a public company says we operate this subsidiary like an independent unit--it's pretty much never been true in the history of public companies, but it certainly isn't true in the case of BET. BET's biggest show of the year (the BET Awards) is aired on multiple Viacom channels. BET+'s subscriber numbers are folded into Viacom's overall numbers and separately disclosed. BET's cable carriage fees are negotiated in conjunction with Viacom's other cable channels. And at least (I haven't actually done a full count) 3 of BET's original shows are available separately on other Viacom SVOD services--something the "leader" of BET+ wouldn't do if they were 100% focused on growing their own subscriber base. Also, I'm pretty sure the head of BET (Scott Mills) reports to David Nevins and not the CEO of Viacom, which is the only way you could even begin to think it's an independent unit. So for you to say BET is run as an independent unit--well, I'd hate to see what it would look like if it wasn't run independently.
Third, when it comes to product, yes, BET spends more than us. We're a start-up. Our product is not what theirs is...yet. All I'm saying is that they aren't implementing the types of features we plan to add, and aren't investing in product development at a commiserate level with that of a tech company. And that's okay--I don't think they want to be a tech company--they want to be a media company (which I'll touch on later). In terms of our website being "inferior", you are right. We're not there yet. But to say it doesn't matter what's on our roadmap--well, I take it you don't really invest in seed companies. Because if all you can do is see what we're doing today and write us off, then you wouldn't invest in any company at the seed stage. You wouldn't even invest in Netflix before SVOD with that criteria. But I'll give it to you: we're not as good as the incumbents today.
Fourth, yes, I look at our competitors' decision to use Amazon Channels and Roku Channel as an opportunity for us. I think you don't quite understand the nuance there though. I'm not criticizing them for making their apps downloadable to Amazon or Roku--our apps are there as well. I'm saying that they disintermediate themselves by being apart of those platforms "Channels" offerings, which means Amazon and Roku actually own the customer relationship and can take a huge percentage of the revenue from each customer. By doing that, our competitors are simply replicating the old cable business model in digital form. But what Netflix should have taught us is that digital finally gives TV companies the chance to know and "own" their customers--and there's immense value in that. You bring up HBOMax, but they just went through a protracted negotiation with the platforms because they wanted to get HBO off of Amazon/Roku channels. In fact, just this week, HBOMax is no longer on Amazon Channels. This is good business. It's risky, but it's best for the long term. BET is not taking that route. They prefer to grow their audience at the sacrifice of ARPU and data, probably because they want to be a media/content company--or at least that's what's easiest for them to do given their strengths. And that's okay. That is one way to play it--and it's also probably the route you go if you don't want to invest a "ton" in tech and part of your parent company's mandate is to be a content "arms dealer".
Fifth, I think you've distilled our differentiated approach into something it very much isn't. I've written a few times about the few things we're trying to do. If you think our plan to get venture scale returns is to make "indie tv crap targeting black viewers", then you're not really here for the conversation but just to malign what we're doing. And I guess that's fine. I responded in hopes that others might be interested in an educated response to the misleading conclusions you reached.