2. 2
Purpose To connect under-served fans & enthusiasts
with genre-specific & lifestyle-specific
video content & community
A portfolio of fan-focused, micro-SVOD video channels
3. Broadband penetration at 79% in US
SVOD services adoption at 52%+ in US with 35% year-over-year growth
Over-the-top (OTT) video service subscribers to surge to 330M+ in 2019 from 90M in 2014
Market
Shifts
Mass market OTT players – Netflix, Hulu, Amazon – use “something for everyone” strategy
Few OTT players adopting “everything for someone” approach – deep, genre-specific content & community
Customer
Opportunity
Much genre-specific content not in demand by mass market OTT services (focus on high-potential originals)
Content licensing windows continue to collapse / multiply
Creates opening to acquire genre-specific and independent content cost-effectively
Content
Opportunity
Channel break-even at 50K subscribers
Low-cost online customer acquisition channels
Cloud-based platforms enable minimal upfront capital investment
Favorable
Economics
Opportunity
3
4. Curated, genre
specific content
Content
Fan focused
product design
Customer Experience
Highly social
experiences
Community
Multi-platform &
device access
Connection
Low price point
with high value
price ratio
Cost Advantage
Our Approach
4
5. 5
We Are
David Wolfe
Chief Executive Officer
Kirk Johnson
Head of Product
Gary Rosenfeld
Head of Business
Development
Mike Lang
Co-Founder,
Board Member
Dan March
Founder,
Board Member
6. 6
First Channel: Horror
Screambox beta launched end of 2014
Currently $3.99 monthly subscription fee
8k subscribers as of August 2015
Positive customer feedback & strong user engagement
Key platform partnerships signed :
Roku
Microsoft Xbox
Sony PlayStation
7. 7
User Feedback
“Awesome site. Every movie I
have watched so far is
awesome! And no buffering or
pixelating. And to top it all of,
it’s at a great price! What’s not
to like?”
- Bill M.
“First let me say that
Screambox is outstanding! I’m
a huge fan of the horror genre
and am sure your product is
going to be a huge success.”
- Michael C.
“The fact that this is the first of
its kind geared towards us die
hard horror fans makes it
badass in my book.”
- Lauren C.
“I’m in, hell yes.”
- Nick M.
“I’ve been waiting for
something like this.”
- Ciara S.
“I just signed up your channel
on my Roku and love this
already. Your categories are
too funny.”
- Dori G.
“Started my free trial today. I
don’t expect I’ll be cancelling
once the 30 days is up. The
website is the best of ideas.”
- Zach B.
“This seems like a good idea.
My Netflix has nothing but
horror suggestions but they
don’t have that many horror
movies.”
- Jay J.
12. Motor
Sports
Guns /
Hunting
Martial
Arts
Horror
Snow
Sports
Jazz
Surfing
Military
Fashion
Astronomy
High
School
Sports
Large & addressable market
Currently underserved
Accessible content
Rapid concept testing
Analytics-based selection
Source & deploy content
Develop & launch key device minimum viable products (MVPs)
Begin to scale user acquisition approaches
Get to 20K subscribers in 6 months
Increase content investment & develop original programming
Expand device footprint & accelerate product innovation
Accelerate branding & marketing efforts
Dedicated channel team
Fantasy
Sports
Identify & Validate
Launch & Beta
Magic
Scale & Grow
Comics
~$1.5M per channel to break-even
Channel Development
Cycling
Film
Noir
DIY
Law
Enforcement
Bollywood
Weight
Loss
Fishing
Medieval
Times
LGBT Broadway
12
13. $0.2
$3.0
$9.2
$19.8
$32.9
$46.1
$(0.5) $0.7
$4.3
$9.7 $17.3 $22.810
60
175
375
625
875
-
200
400
600
800
1,000
$-
$10
$20
$30
$40
$50
Beta Year 1 Year 2 Year 3 Year 4 Year 5
ThousandsofSubs
Millionsof$s
Revenue Contribution Average Subs
Per Channel Economics
1313
Channel
Break-even
Subscriber
Lifetime Value
Subscriber Break-even: 50k Subs
$12
$7
$6
$5 $5 $5$(7)
$22
$36
$49 $51
$47
$(20)
$-
$20
$40
$60
$-
$3
$6
$9
$12
$15
Beta Year 1 Year 2 Year 3 Year 4 Year 5
LifetimeValue
$SAC
$ SAC (Blended) Lifetime Value (Net)
Editor's Notes
Key Points:
SFN is a portfolio – of one right now - genre-specific SVOD channels that focus primarily on niches with fanatical enthusiasts– horror, surfing, martial arts, science fiction, etc.
Our goal is connect them with content & community
Alternative content:
Purpose a) To create communities of under-served fans & enthusiasts
connected by relevant and genre specific
video-based viewing experiences
Purpose b) To connect under-served fans & enthusiasts with genre/life-style specific content & fan-based community
Key Points:
Consumers not just adopting OTT , but strong indicators they are leaning away from “owned” models (TVOD, DVD) to “all you can eat models”
"All you can eat players" leaning into mass market programming models with focus on original episodic TV
Problem for consumers &producers/distributors who want/do niche – classic long tail problem
Consumers: Opportunity to deliver “Everything for someone” service to smaller audiences (Golden Coral vs. All u can eat Sushi)
Producers: Long tail distributors & producers hurting. Netflix getting 50-100 titles a year from big Indie distributors (Radius, Magnolia, IFC). Opportunities to distribute lower demand content shrinking (1st/2nd windows limited. 3rd shrinking)
Can support a channel with 65k subs & opportunities to reach & acquire subscribers not limited by walled gardens (MSO’s, Big media company bundles)
Key Points:
We fulfill our purpose by delivering
Content – films of all types, lengths, from around the world, TV, long & short form video.
Curation – We handpick our films, make sure they perfectly fit the needs of our fan-base. We use curators to score & solicit community feedback
Context – We intend to add film-reviews, director cuts, interviews, and commentary related to the films we deliver as well as other content forms to enhance the viewing experience
Community – We are addressing the needs of passionate fans. We spark important conversations about genre specific concerns and issues
Connection – We are at the nexus of entertainment & technology. We enable our communities to connect with video-experiences and each other through the our comprehensive device penetration and careful use of data and algorithmic technology
Key Points:
Origin Story
- Dan : Founder – rock in shoe – was the OTT opportunity, but tackling with a Everything for someone instead of a Something for everyone strategy
- started with Horror and Scream Entertainment
- Mike joined as co-founder : Digital media visionary / idea man behind Hulu / architect of MySpace / Consultant to UMG
- saw opportunity, but realized it was broader than Horror and accumulated operating experience could allow for many successful channels
- Realized they needed a operator with digital roots in technology to drive the ship. I joined in Feb
- I joined because of the market opportunity, the customer-centric nature of the business, and because I believe winning is not just about great content, but about engineered
and differentiated experiences
Super Powers (Great team)
- Mike – Understand of the market place, Experience & Connections
- Dan – Experience with Content distribution specifically with independents & international
- Kirk - Product & Strategy with domain experience in entertainment & mobile
- Gary -Entertainment focused Business Development & Distribution partner sourcing & management
- Kelly - HBS grad / deep undertanding of business modeling & strategic finance
- David - General Management, company building – startup/growth mode, Product Strategy, Technology Dev, & Direct Response Marketing
Key Points:
Launched in Sep 2014
Key thesis to validate (Customer Discovery & Validation)
Could we acquire, retain, delight, & get em to pay
With lower cost, but highly targeted content & a very horror-centric user experience
Being on all devices matters
Key Points:
Our users love the service
The are 3x more active on FB then the mean and engage in a meaningful way on our FB page
Key Point:
- Our LTV > 3xCAC on a per subscriber basis we cover our variable costs by a factor of 3
TODO: update with data
Key Points:
We have a healthy subscriber funnel
Acquisition – do well with paid and unpaid source & traffic is split 60/40
Opportunity to push new channels
Very good at activating our Trialers
Opportunity to improve with onboarding
Revenue & Retention healthy with a LTV that pays back 3x against our blended SAC
Opportunity to improve both with price-sensitivity testing, better content, more devices, improved UEX, & CRM programs
Engagement is healthy – 10 hours & 16.
More content & better community integration is our oportunity here
TODO: update
Key Point:
We have had launched on 2 streaming device platforms, 1 IP TB, & 2 mobile OS – Seeing adoption on Roku
We are going live with Xbox in June
We are going live with Sony PS by Oct (Halloween)
TODO:
-Reorder & structure launched
Remove Other
Tabulate addressable
Key Point:
We have ideas about what channel to pursue, but we don’t have religion.
We have religion about how we choose the channels we pursue
Rigorous process of
Validating the idea with tests
Entering into a beta period to see if the channel has legs
Then moving into a growth mode
Key Point:
- <Channel breaks even at 65k subs and contributes to fixed costs by year 2.
A channel with 900k subs generates ~50 million a year with a 45% contribution
As churn drops we will see our LTV (- variable costs > direct/content) will be almost 10x ouf