WEBVTT - Streaming Services that Sunk 0:00:04.440 --> 0:00:12.360 Welcome to tech Stuff, a production from iHeartRadio. Hey there, 0:00:12.400 --> 0:00:16.240 and welcome to tech Stuff. I'm your host, Jonathan Strickland. 0:00:16.320 --> 0:00:19.759 I'm an executive producer with iHeartRadio. And how the tech 0:00:19.800 --> 0:00:23.360 are you So? Back in two thousand and seven, a 0:00:23.560 --> 0:00:27.280 rent by mail video business made a move that would 0:00:27.320 --> 0:00:33.440 be a true disruption. We talk about disruptive companies, this 0:00:33.680 --> 0:00:36.720 was definitely one of them. It had already shaken things 0:00:36.800 --> 0:00:39.239 up by taking aim at a huge company that had 0:00:39.280 --> 0:00:43.159 dominated the home video rental market for decades through offering 0:00:43.200 --> 0:00:47.520 customers the chance to access a huge media library from 0:00:47.520 --> 0:00:50.440 the comfort of their own homes, albeit they had to 0:00:50.479 --> 0:00:52.920 wait for titles to make their way through the postal 0:00:52.960 --> 0:00:57.120 system before they could enjoy them. But now this upstart 0:00:57.160 --> 0:00:59.120 company in two thousand and seven had set up a 0:00:59.160 --> 0:01:01.639 service where, if if you can believe it, you can 0:01:01.680 --> 0:01:06.000 actually connect to a media player through the Internet and 0:01:06.040 --> 0:01:10.039 watch movies and television shows by streaming them to your device. 0:01:11.000 --> 0:01:14.520 The upstart company was, of course Netflix. It had battled 0:01:14.560 --> 0:01:18.920 with Blockbuster, which actually had the opportunity to buy Netflix 0:01:18.959 --> 0:01:21.920 at one point, but walked away from that deal, and 0:01:22.000 --> 0:01:25.640 Netflix quickly became a big concern for the major studios, 0:01:25.959 --> 0:01:31.840 which understandably and arguably correctly worried that unless someone took action, 0:01:32.200 --> 0:01:37.560 Netflix would become a powerful monopoly for prestige media streaming services. 0:01:37.600 --> 0:01:39.960 I'm not talking about the user generated stuff which you 0:01:39.959 --> 0:01:45.479 would find on platforms like YouTube, but rather studio produced stuff. Now, 0:01:45.520 --> 0:01:48.320 at that point, Netflix would have a lot more leverage 0:01:48.320 --> 0:01:50.840 when negotiating with studios if it was the one and 0:01:50.880 --> 0:01:55.000 only place where customers could go to watch stuff online, 0:01:55.280 --> 0:01:59.280 and studios hate when leverage is given to anyone else 0:01:59.280 --> 0:02:03.360 see also the Guild of America strike. Lots of other 0:02:03.520 --> 0:02:07.920 streaming services would uppear over the next decade and a half. 0:02:08.040 --> 0:02:11.480 Some of them were the product of collaboration Hulu initially 0:02:11.800 --> 0:02:14.920 was I'll talk a little bit about Hulu later on 0:02:14.960 --> 0:02:19.320 in the episode. Some streaming services launched as an extension 0:02:19.520 --> 0:02:23.119 of a television or cable channel, so eventually you would 0:02:23.120 --> 0:02:27.160 get things like Peacock or HBO Max or Disney Plus 0:02:27.320 --> 0:02:31.840 or Paramount Plus, which draws heavily from CBS, and lots more, 0:02:31.880 --> 0:02:35.840 including ones that aren't extension of media companies, like things 0:02:35.880 --> 0:02:40.240 like Amazon Prime Video and Apple TV Plus. There are 0:02:40.680 --> 0:02:44.000 so many streaming services now that if you subscribed to 0:02:44.200 --> 0:02:47.160 all of them, you would be probably paying more per 0:02:47.240 --> 0:02:48.720 month than you would if you went with one of 0:02:48.720 --> 0:02:54.040 those gargantuan cable TV packages. The landscape is crowded and 0:02:54.280 --> 0:02:58.240 it's complicated. I mean, sure, if all you consume are 0:02:58.320 --> 0:03:01.640 Disney films, and let's be honest, the way we're going, 0:03:01.680 --> 0:03:03.920 pretty soon every movie is going to be a Disney 0:03:03.919 --> 0:03:06.800 movie because the mouse House just gobbles up everything. Well, 0:03:07.240 --> 0:03:10.000 if that's all you do, then Disney Plus might be 0:03:10.080 --> 0:03:12.640 all you need. But most of us are likely to 0:03:12.680 --> 0:03:16.280 find ourselves subscribing to, or at least wanting to subscribe 0:03:16.320 --> 0:03:19.919 to a few different services to get access to all 0:03:19.919 --> 0:03:23.360 the stuff we like, and even then we're probably giving 0:03:23.440 --> 0:03:26.079 up on a couple of things. For example, I think 0:03:26.160 --> 0:03:30.600 at this point, I have Netflix, I have Amazon Prime, 0:03:30.960 --> 0:03:34.440 I have Apple TV Plus, I have Disney Plus, I 0:03:34.480 --> 0:03:39.360 have HBO Max that might be at oh, I've got Peacock. 0:03:40.600 --> 0:03:42.920 So like, that's ridiculous, right, I Mean there are ties 0:03:42.920 --> 0:03:44.720 where I sit there and think, do I really need 0:03:44.760 --> 0:03:47.600 all these answers? No, I don't need them all, but 0:03:48.360 --> 0:03:51.240 there are programs that I can only watch through one 0:03:51.400 --> 0:03:54.840 of those services, and there's not really any other alternative. 0:03:54.920 --> 0:03:57.280 So there I go. Now, the last couple of years 0:03:57.280 --> 0:04:00.240 have shown us that on the business side, if we 0:04:00.280 --> 0:04:02.320 go to the other side, yeah, things kind of stink 0:04:02.320 --> 0:04:05.640 if you're a consumer because they're all these different competing services. 0:04:06.000 --> 0:04:08.520 But on the other side, things aren't that rosy either. 0:04:09.000 --> 0:04:12.560 While the consumer struggles with which services they're gonna subscribe 0:04:12.560 --> 0:04:16.719 to or pass up, the media companies behind the services 0:04:16.760 --> 0:04:19.640 are trying to carve out a profitable path while also 0:04:19.760 --> 0:04:24.040 competing with one another. Now, maybe that involves producing new 0:04:24.120 --> 0:04:27.360 films and shows that are exclusively for the streaming service. 0:04:27.760 --> 0:04:31.440 Maybe it involves securing licensing for old favorites before a 0:04:31.560 --> 0:04:33.600 rival can do it, though a lot of that stuff 0:04:33.680 --> 0:04:37.800 ends up getting sewn up in existing libraries. Maybe it 0:04:37.920 --> 0:04:40.960 means taking some stuff off the service so that you 0:04:40.960 --> 0:04:44.279 know you're not paying people who made it over and 0:04:44.320 --> 0:04:48.919 over the residuals. Cough. David Zaslov does this a lot cough. 0:04:49.640 --> 0:04:55.760 The point is the streaming service business is really, really tough. 0:04:55.839 --> 0:04:58.559 I mean, it's great when you're on a meteoric rise. 0:04:58.640 --> 0:05:01.920 You know, you launch, people find you, they talk you up. 0:05:02.279 --> 0:05:07.480 Your subscription rates soar you're just doing gangbusters. It's growth 0:05:07.520 --> 0:05:11.160 all the way, baby, but eventually you start to hit 0:05:11.200 --> 0:05:14.359 a plateau and fewer people are signing up this quarter 0:05:14.480 --> 0:05:17.760 compared to last quarter, or worse, you might hit a 0:05:17.760 --> 0:05:20.640 point where you actually see subscriber numbers go down, and 0:05:20.680 --> 0:05:25.680 that's super bad. Now, maybe you supplement your revenue by 0:05:25.760 --> 0:05:29.839 showing ads against content. Maybe it's not just subscriptions. Maybe 0:05:29.880 --> 0:05:35.159 advertisers offer some stuff for you as well. Maybe you 0:05:35.200 --> 0:05:38.040 give customers options. Maybe they can subscribe it a higher 0:05:38.080 --> 0:05:41.520 tier and they can get an ad free experience. That's 0:05:41.560 --> 0:05:44.080 pretty common these days. And then if they subscribe it 0:05:44.360 --> 0:05:47.360 a lower tier, they're spending less per month, but they're 0:05:47.400 --> 0:05:50.640 also having to sit through ads to watch the content 0:05:50.720 --> 0:05:54.360 they want. You still have to balance costs with revenue, 0:05:54.400 --> 0:05:57.240 and if you have to keep producing high quality content 0:05:57.680 --> 0:06:01.479 to both attract and keep custom you might find that 0:06:01.520 --> 0:06:04.440 your profit margins are so thin they only have one side, 0:06:05.120 --> 0:06:07.880 or maybe even that you're losing money, And if you're 0:06:08.000 --> 0:06:11.920 seriously unlucky, you might find that you're on borrowed time, 0:06:12.160 --> 0:06:15.960 that you're losing money, and there's no pathway out of that. 0:06:16.800 --> 0:06:19.000 The hope is that you scale up to a point 0:06:19.400 --> 0:06:23.160 where you ultimately are making more money than you're spending, 0:06:23.720 --> 0:06:27.919 but depending on how the landscape is, that might not 0:06:28.000 --> 0:06:30.800 even be a possibility. So we're going to take a 0:06:30.800 --> 0:06:34.640 look at some failed streaming services, ones that made an 0:06:34.640 --> 0:06:37.960 effort to hang with the cool kids, but ultimately flopped 0:06:38.080 --> 0:06:41.080 or faded away, as the case may be, and in 0:06:41.080 --> 0:06:46.120 one case, stopped a month after it had started. Now, 0:06:46.120 --> 0:06:48.839 I think I'm gonna start with a fairly recent example, 0:06:49.240 --> 0:06:52.719 one that I talked about a lot as the service launched, faltered, 0:06:52.760 --> 0:06:57.160 and then flopped. And that's Quibi. Do you remember Quibi? 0:06:57.760 --> 0:07:03.520 In case you don't, here's the deal. So Jeffrey Katzenberg, 0:07:03.760 --> 0:07:08.680 who famously founded DreamWorks Animation after he left Walt Disney Studios. 0:07:09.120 --> 0:07:11.520 That story is a crazy one, by the way, full 0:07:11.680 --> 0:07:17.120 of like corporate drama, a lot of like like executives 0:07:17.640 --> 0:07:22.560 being really bitter about each other. Unfortunately, it it's the 0:07:22.640 --> 0:07:24.880 kind of stuff that really blogs in a different kind 0:07:24.880 --> 0:07:26.640 of podcast. So as much as I would love to 0:07:26.680 --> 0:07:29.160 gush about it, I'm just gonna leave it here. Anyway, 0:07:29.760 --> 0:07:32.960 he decided he wanted to create a short form, highly 0:07:33.040 --> 0:07:38.040 produced video delivery platform aimed at the smartphone market. So 0:07:38.200 --> 0:07:42.680 you know, like TikTok is a user generated platform right. 0:07:43.240 --> 0:07:47.520 But what Katzenberg wanted to do was make a studio 0:07:47.840 --> 0:07:52.040 produced version of short form video platforms. So instead of 0:07:52.040 --> 0:07:56.360 it being you know, some kid hitting on a really 0:07:56.400 --> 0:08:02.000 cool dance or something and then getting virally famous, it 0:08:02.040 --> 0:08:05.160 would be studios making content and then using this platform 0:08:05.240 --> 0:08:09.720 to distribute that content. And you could sort of see 0:08:09.760 --> 0:08:13.440 the logic behind the decision because people are on their 0:08:13.480 --> 0:08:16.560 phones a lot. They are using their phones more and 0:08:16.640 --> 0:08:20.840 more to access entertainment, and short form content works well 0:08:20.880 --> 0:08:24.080 in situations where you might not have the time or 0:08:24.120 --> 0:08:27.560 desire to sit down to an hour or more of video, 0:08:27.960 --> 0:08:32.160 So why not create a platform specifically for that kind 0:08:32.320 --> 0:08:36.960 of audience. Katzenberg founded QUIBI, which kind of stands for 0:08:37.040 --> 0:08:40.840 quick Bites. He founded it in the summer of twenty eighteen. 0:08:41.120 --> 0:08:44.880 Originally it had the name new TV, but it would 0:08:44.920 --> 0:08:47.520 change to quibbi a little bit later. In twenty eighteen, 0:08:47.880 --> 0:08:50.880 he hired Meg Whitman, who was the former CEO of 0:08:50.920 --> 0:08:54.400 Hewlett Packard, and she became the CEO of Quibi, and 0:08:54.480 --> 0:08:57.840 Katzenberg and Whitman very quickly were making the rounds to 0:08:58.440 --> 0:09:03.120 various studios effort to drive up investments for Quibi, and 0:09:03.160 --> 0:09:06.559 they did. They raised like a billion dollars in the process. 0:09:07.120 --> 0:09:09.960 So the plan was to get production ramped up in 0:09:09.960 --> 0:09:14.079 twenty nineteen in preparation for a launch of the actual 0:09:14.160 --> 0:09:18.400 platform in the spring of twenty twenty. The hope was 0:09:18.440 --> 0:09:21.520 to create all sorts of different kinds of content across 0:09:21.559 --> 0:09:26.520 all genres reality, television, comedy, action, everything, and that they 0:09:26.520 --> 0:09:30.000 would take the form of stuff like short form television episodes, 0:09:30.040 --> 0:09:33.360 so things that lasted like ten minutes, to films that 0:09:33.400 --> 0:09:37.440 could be divided into ten minute long chapters, again all 0:09:37.440 --> 0:09:40.880 designed to be watched on your mobile device. In fact, 0:09:41.120 --> 0:09:44.240 they even had this weird morphing technology where you could 0:09:44.440 --> 0:09:48.480 watch content either in portrait or landscape mode, and your 0:09:48.520 --> 0:09:53.120 experience of watching that program would depend upon what mode 0:09:53.120 --> 0:09:57.240 you were using, because you would get different views. Like 0:09:57.280 --> 0:10:01.200 it was shot with this in mind. It was kind 0:10:01.240 --> 0:10:04.959 of it was really ambitious, but also kind of odd 0:10:05.400 --> 0:10:07.480 to make that choice. It almost meant like you had 0:10:07.480 --> 0:10:10.240 to make two versions of your movie in order to 0:10:10.240 --> 0:10:12.240 do it so that way, like if you're watching it 0:10:12.280 --> 0:10:15.560 in portrait mode, you're not missing some pivotal piece of 0:10:15.600 --> 0:10:19.000 information way off to the side in the frame because 0:10:19.000 --> 0:10:21.000 it wouldn't show up due to the fact that your 0:10:21.040 --> 0:10:27.199 screen is vertical rather than horizontal. Anyway, they really pushed this, 0:10:27.520 --> 0:10:30.360 and producing stuff takes a lot of money, right You 0:10:30.440 --> 0:10:34.280 mentioned that earlier, like it is expensive to make studio 0:10:34.360 --> 0:10:37.720 level content, highly produced content, even if you're cutting corners, 0:10:37.760 --> 0:10:41.840 it's still expensive. And meanwhile, the launch date was getting closer. 0:10:42.160 --> 0:10:45.600 Now it is impossible for us to say if Quibi 0:10:46.200 --> 0:10:50.040 would have survived if things had been a little different. Personally, 0:10:50.280 --> 0:10:52.880 I think Quibi was doomed to fail no matter what, 0:10:53.679 --> 0:10:57.000 but the decline may have taken a lot longer if 0:10:57.120 --> 0:11:00.599 things had been very different in twenty twenty, because it 0:11:00.640 --> 0:11:03.240 seems to me like the mobile focused approach really limited 0:11:03.280 --> 0:11:06.080 Quibi's usefulness. But maybe it would have held on, and 0:11:06.120 --> 0:11:08.160 maybe it would have even been a success. I'll never 0:11:08.200 --> 0:11:11.800 be able to tell. But you know, something major happened 0:11:12.000 --> 0:11:15.240 in twenty twenty. We had the COVID nineteen pandemic hit, 0:11:15.760 --> 0:11:18.840 and nearly everyone was stuck at home for a long time, 0:11:18.920 --> 0:11:23.000 so the use case for Quibi was reduced significantly. I mean, 0:11:23.080 --> 0:11:25.640 here was a product that was intended to go to 0:11:25.840 --> 0:11:29.240 folks who were looking for some sort of entertainment while 0:11:29.240 --> 0:11:31.920 they were like on a bus or on a subway 0:11:32.360 --> 0:11:34.800 or standing in line, you know, doing all the things 0:11:34.800 --> 0:11:37.960 that they could not do because they were stuck at home. 0:11:38.320 --> 0:11:41.200 And at home they had access to tons of other 0:11:41.360 --> 0:11:46.920 entertainment services that were designed to work with their lifestyles, 0:11:47.240 --> 0:11:49.920 So trying to fit Quibi in when they were no 0:11:50.000 --> 0:11:55.840 longer in those use cases it just didn't really catch. Now. 0:11:55.920 --> 0:11:58.719 At launch, Quibi did see quite a few downloads. I 0:11:58.720 --> 0:12:01.360 think it hit like number three on the most popular 0:12:01.400 --> 0:12:04.120 apps for the week that it debuted, but then the 0:12:04.160 --> 0:12:08.640 following week that those download numbers dropped drastically. Signing up 0:12:08.679 --> 0:12:11.360 would give you access to Quibe for three months for free, 0:12:11.480 --> 0:12:13.679 and after that you were supposed to pay for a subscription. 0:12:14.040 --> 0:12:17.240 So about three quarters of Quibi's users just opted to 0:12:17.360 --> 0:12:20.280 bounce off the service rather than convert to a paid 0:12:20.360 --> 0:12:23.840 subscription once their free trial was up. So the company 0:12:23.840 --> 0:12:26.520 attempted to bail water out of the sinking boat, but 0:12:26.720 --> 0:12:29.600 six months after going live, the writing was on the wall. 0:12:29.640 --> 0:12:32.720 So in mid October twenty twenty, the Wall Street Journal 0:12:32.760 --> 0:12:35.040 reported that Quibi was on the way out, and by 0:12:35.120 --> 0:12:38.960 December of twenty twenty, the lights had gone off in Quibi. 0:12:39.400 --> 0:12:43.600 Roku ended up purchasing Quibi's library, and thankfully creators retained 0:12:43.600 --> 0:12:46.199 the rights to their intellectual property, which gave them the 0:12:46.280 --> 0:12:49.240 chance to find some other platform to host their work. 0:12:49.520 --> 0:12:51.840 We're going to talk about a different company later here, 0:12:52.120 --> 0:12:55.479 where it's like the opposite of that to an extreme. 0:12:56.120 --> 0:12:58.800 But yeah, Quibi came and went so fast it didn't 0:12:58.880 --> 0:13:03.440 even say goodbye. Now there's a lot more we're going 0:13:03.480 --> 0:13:07.240 to talk about today with various failed streaming services. But 0:13:07.320 --> 0:13:09.559 before we get into all of that, so that we 0:13:09.720 --> 0:13:24.520 don't fail, let's take a quick break to thank our sponsors. So, yeah, Quibi. 0:13:25.440 --> 0:13:28.439 There were some major players in entertainment behind the scenes, 0:13:28.640 --> 0:13:33.120 both directly working for Quibi and also investing into the company. 0:13:33.440 --> 0:13:36.800 But our next example was an actual extension of a 0:13:36.840 --> 0:13:41.920 truly massive media conglomerate. So NBC Universal, which itself is 0:13:41.960 --> 0:13:45.960 a branch of Comcast, decided to dip its corporate tow 0:13:46.160 --> 0:13:50.280 in the subscription based video on demand service back in 0:13:50.480 --> 0:13:55.600 twenty fifteen. So a media executive named Evan Shapiro led 0:13:55.679 --> 0:13:58.440 the charge, and the goal was to create a video 0:13:58.520 --> 0:14:03.160 service centered around owned comedy. So the question was could 0:14:03.280 --> 0:14:07.360 Yuck Yucks bring in the buck bucks? The service would 0:14:07.360 --> 0:14:10.600 be called SISO, and it launched to a small beta 0:14:10.640 --> 0:14:13.440 test in December twenty fifteen, but the actual service went 0:14:13.679 --> 0:14:18.480 live in early twenty sixteen. Shapiro spared no expense when 0:14:18.480 --> 0:14:21.480 it came to curating content for the service. He wanted 0:14:21.840 --> 0:14:25.840 all things comedy, including older material like episodes of Monty 0:14:25.880 --> 0:14:29.440 Python's Flying Circus or the Great Sketch show The Kids 0:14:29.440 --> 0:14:32.400 in the Hall. That Saturday Night Live library was part 0:14:32.400 --> 0:14:35.000 of it. Remember this was an extension of NBC Universal. 0:14:35.360 --> 0:14:40.720 He also initially had eyes on making SISO the exclusive 0:14:40.760 --> 0:14:43.920 platform to stream episodes of the Office and Parks and 0:14:44.040 --> 0:14:49.520 rec Those plans would ultimately fall through, not Shapiro's fault, really, 0:14:50.080 --> 0:14:52.920 but it was a part of his plan where he thought, 0:14:53.000 --> 0:14:55.280 if we can do this, then that's going to attract 0:14:55.600 --> 0:14:59.880 a huge base of users. He made licensing deals left, right, 0:14:59.840 --> 0:15:02.400 now center. He brought in a ton of popular comedy 0:15:02.480 --> 0:15:05.440 under one roof, and he also empowered his staff to 0:15:05.920 --> 0:15:09.840 produce original content for the platform as well. NBC Universal 0:15:10.680 --> 0:15:14.840 was kind of using CISO as a sort of experimental platform, 0:15:14.880 --> 0:15:18.400 the idea of being that if a comedy centric video 0:15:18.560 --> 0:15:22.520 on demand service and over the top streaming service, if 0:15:22.560 --> 0:15:26.840 that could work well, then INBC. Universal might launch other 0:15:27.120 --> 0:15:31.240 genre or interest specific streaming platforms in the future, like 0:15:31.680 --> 0:15:36.080 maybe one based around horror. Universal famously has a really 0:15:36.120 --> 0:15:40.040 deep horror library that they keep trying to exploit in 0:15:40.080 --> 0:15:43.840 the modern era and often failed to do so. Or 0:15:43.880 --> 0:15:46.840 maybe like a streaming service that's really focused on things 0:15:46.920 --> 0:15:51.240 like reality television programming, which arguably can be scarier and 0:15:51.280 --> 0:15:55.560 more disturbing than horror is. The Sisow subscription was just 0:15:56.000 --> 0:15:58.880 three dollars ninety nine cents per month when it launched. 0:16:00.040 --> 0:16:03.120 Victual Catalog was heavy on stuff that comedy fans were 0:16:03.200 --> 0:16:07.800 likely to gravitate toward, including a sizable library of British 0:16:07.800 --> 0:16:10.920 comedy that could actually be a little tricky to access 0:16:10.960 --> 0:16:13.840 here in the United States outside of some notable exceptions 0:16:13.880 --> 0:16:18.040 like everyone's heard of Monty Python's Flying Circus, But there 0:16:18.040 --> 0:16:21.200 are a lot of other British comedies that the average 0:16:22.000 --> 0:16:24.680 American may not be familiar with. Some of them are 0:16:25.600 --> 0:16:28.600 really famous, I mean, like some you might have encountered 0:16:28.640 --> 0:16:32.280 on other channels like Adult Swim showed The Mighty Boosh 0:16:32.360 --> 0:16:36.840 for a while, which is a bizarre, absurd comedy series, 0:16:37.520 --> 0:16:39.240 And then there were some sketch comedies, like one of 0:16:39.240 --> 0:16:43.840 my favorites was that Mitchell and Weblook, which Netflix carried 0:16:43.960 --> 0:16:48.600 briefly and then it became unaccessible to an American public. 0:16:48.960 --> 0:16:51.960 I finally ended up breaking down and buying the British 0:16:52.000 --> 0:16:55.040 DVDs and a region free DVD player so I could 0:16:55.080 --> 0:16:58.480 find I could watch them again. But anyway, the goal 0:16:58.600 --> 0:17:01.960 of CISO was to create original content. That was the 0:17:02.000 --> 0:17:05.680 long term goal, to make its own content that would 0:17:05.680 --> 0:17:09.000 build its own following, much like Netflix had done with 0:17:09.080 --> 0:17:12.000 things like Orange as the New Black and A House 0:17:12.040 --> 0:17:15.520 of Cards and Stranger Things, And now every streaming services 0:17:15.600 --> 0:17:18.440 is following that same kind of philosophy. So you use 0:17:18.520 --> 0:17:23.480 the library to first attract your ground base of subscribers, 0:17:23.840 --> 0:17:27.080 and then you create original content to attract new ones 0:17:27.119 --> 0:17:30.480 and to keep everybody there. Now, one early mistake that 0:17:30.520 --> 0:17:34.760 the executives made over at SISO, though according to Shapiro, 0:17:35.280 --> 0:17:37.800 was actually folks higher up at NBC Universal that made 0:17:37.800 --> 0:17:41.080 this mistake, was to flinch at a deal that would 0:17:41.080 --> 0:17:44.320 have made CISO the exclusive streaming home for the Office. 0:17:44.760 --> 0:17:48.879 As I mentioned earlier, so Netflix was really interested in 0:17:49.200 --> 0:17:53.200 having access to the office. They really really really wanted it, 0:17:53.840 --> 0:17:57.240 and the plan was originally that CISO was going to 0:17:57.280 --> 0:18:01.400 get the exclusive deal, but Netflix made INBC Universal executives 0:18:01.440 --> 0:18:05.280 an offer they couldn't refuse, and they agreed to let 0:18:05.440 --> 0:18:09.120 Netflix get access to those programs, which meant CISO would 0:18:09.160 --> 0:18:12.439 not have that exclusivity. And even if CISO were to 0:18:12.520 --> 0:18:15.200 show episodes of the Office, the fact that you could 0:18:15.200 --> 0:18:17.200 already get it on Netflix and a lot of people 0:18:17.280 --> 0:18:20.520 were already Netflix subscribers meant you weren't going to lure 0:18:20.640 --> 0:18:24.639 Netflix users to SISO just based on the Office, So 0:18:24.880 --> 0:18:28.480 one of the things that possibly could have brought over 0:18:28.640 --> 0:18:32.960 a larger base of subscribers fell through. On the flip side, 0:18:33.000 --> 0:18:36.600 it also meant that CISO had some budget freed up 0:18:36.680 --> 0:18:41.520 for making original content. Now Apparently, Shapiro initially was told 0:18:41.520 --> 0:18:44.640 that NBC Universal was going to have this enormous marketing 0:18:44.680 --> 0:18:49.080 campaign to promote CISO, like a ten million dollar effort 0:18:49.480 --> 0:18:53.479 to highlight the service across the company's various networks, But 0:18:53.520 --> 0:18:58.800 that really didn't manifest and CISO received relatively little marketing support, 0:18:59.040 --> 0:19:03.320 which not surprise, meant that subscription numbers were lackluster. I mean, 0:19:03.359 --> 0:19:06.520 it's hard to get excited about subscribing to a service 0:19:06.600 --> 0:19:09.439 if you've never heard of it, or if the promotion 0:19:09.560 --> 0:19:13.320 you see doesn't really talk it up enough. Making matters 0:19:13.359 --> 0:19:16.600 worse is that Ciso had its own video player that 0:19:16.720 --> 0:19:20.639 occasionally had technical issues and wasn't compatible with some of 0:19:20.680 --> 0:19:24.560 the hardware consumers used to access streaming content. So again, 0:19:24.640 --> 0:19:28.200 let's contrast this with Netflix. Netflix had made a decision 0:19:28.280 --> 0:19:31.119 a long time ago to pretty much make sure it 0:19:31.200 --> 0:19:34.919 was anywhere where there's a screen. Netflix worked to create 0:19:34.960 --> 0:19:40.040 apps that were compatible with video game consoles, with streaming boxes, 0:19:40.040 --> 0:19:44.400 connected to televisions, to smart TVs. In fact, like if 0:19:44.440 --> 0:19:47.399 you have a fridge that has a video screen incorporated 0:19:47.400 --> 0:19:49.800 in it, there's a chance that there's a Netflix app 0:19:49.920 --> 0:19:54.960 native for that particular device. But Comcast's approach wasn't as 0:19:54.960 --> 0:19:57.679 broad a and this is kind of a pun a 0:19:57.800 --> 0:20:01.879 spectrum as what Netflix was. Take now, CISO did end 0:20:01.960 --> 0:20:05.280 up joining Amazon's streaming Partners program in mid twenty sixteen. 0:20:05.359 --> 0:20:08.280 That helped a little. By the end of twenty sixteen, 0:20:08.359 --> 0:20:11.280 it was finally compatible with Apple TV. But you know, 0:20:11.400 --> 0:20:13.920 this was like a full year in operation when these 0:20:13.960 --> 0:20:17.960 things started to click into place. While CISO failed to 0:20:18.080 --> 0:20:20.760 take off to the moon, it did grow in its 0:20:20.760 --> 0:20:24.359 second year, so in twenty seventeen it began an upward 0:20:24.440 --> 0:20:28.359 trajectory for subscriber growth. The famous podcast My Brother, My 0:20:28.400 --> 0:20:31.080 Brother and Me launched a television show on the network 0:20:31.119 --> 0:20:35.280 in twenty seventeen. They often joke about how the SISO 0:20:35.440 --> 0:20:40.000 platform subsequently died on their podcast a lot, but while 0:20:40.040 --> 0:20:42.440 they make jokes about it, their show was not likely 0:20:42.480 --> 0:20:45.960 to have been a contributing factor to ciso's demise. The 0:20:46.040 --> 0:20:49.080 service was spending a lot more money than it was 0:20:49.160 --> 0:20:52.800 bringing in, and arguably this was necessary in order to 0:20:52.960 --> 0:20:56.000 scale to a level that could compete with bigger, more 0:20:56.119 --> 0:21:00.480 established services like Netflix. But a prestige show on CISO 0:21:00.600 --> 0:21:05.199 called There's Johnny About Johnny Carson may have been the 0:21:05.240 --> 0:21:09.560 straw that broke NBC Universal's back. It was an expensive 0:21:09.720 --> 0:21:12.800 show to produce and with the numbers headed in the 0:21:12.800 --> 0:21:15.879 wrong direction, At least for the higher ups at NBC Universal, 0:21:16.440 --> 0:21:19.600 it meant Evan Shapiro got his walk in papers in 0:21:19.680 --> 0:21:23.800 May twenty seventeen. CISO kept on going for a little bit, 0:21:23.840 --> 0:21:26.280 but it didn't last long. A couple of months after 0:21:26.280 --> 0:21:29.200 Shapiro had left, SISO announced it would be shutting down 0:21:29.240 --> 0:21:31.200 by the end of the year, and it didn't even 0:21:31.200 --> 0:21:33.640 make it that far. It actually went dark in mid 0:21:33.680 --> 0:21:39.439 November twenty seventeen. Ciso's failure is complicated. It probably relates 0:21:39.440 --> 0:21:42.119 to a lot of different factors. One is that it 0:21:42.160 --> 0:21:44.920 didn't get the marketing push it needed from its parent company, 0:21:45.040 --> 0:21:48.159 a lesson NBC Universal appears to have learned, because you 0:21:48.280 --> 0:21:51.240 can't turn around without running into a promo for Peacock 0:21:51.320 --> 0:21:54.480 these days, so they've definitely changed their tune on that. 0:21:55.080 --> 0:21:59.120 But for another, SISO failed to explore AD supported options, 0:21:59.119 --> 0:22:01.800 which potentially could have brought in revenue to help offset 0:22:01.840 --> 0:22:06.600 the costs. Third, some of the moves to produce original 0:22:06.640 --> 0:22:09.360 content might have been a bit too ambitious so early on, 0:22:10.000 --> 0:22:12.600 Like it's really good to have the goal to create 0:22:12.640 --> 0:22:16.320 prestige content, but it's possible that the service needed the 0:22:16.359 --> 0:22:19.719 ground to be a touch more firm before trying to 0:22:19.800 --> 0:22:22.760 create something like There's Johnny. This is no shade on 0:22:22.840 --> 0:22:25.480 There's Johnny. I'm not saying that that was a bad 0:22:25.520 --> 0:22:29.439 series by far, just that it was. It was a 0:22:29.440 --> 0:22:33.320 big risk considering how much it costs, and maybe the 0:22:33.320 --> 0:22:36.320 wise move would have been to hold off just a 0:22:36.320 --> 0:22:40.920 bit longer to try and establish a standing before going 0:22:40.960 --> 0:22:44.000 into it. It's hard to say, like these things. In hindsight, 0:22:44.119 --> 0:22:45.960 it's really easy to say one way or the other. 0:22:46.000 --> 0:22:48.040 But at the time, I'm sure these decisions were not 0:22:48.119 --> 0:22:51.199 easy ones. Some of the content that was on CISO 0:22:51.560 --> 0:22:54.880 would end up going to other platforms, including another one 0:22:55.119 --> 0:23:00.639 then no longer exists, VRV or verve. The history of 0:23:00.720 --> 0:23:03.280 VRV or I'm just gonna call it VERV why not. 0:23:03.640 --> 0:23:06.000 The history of VERV is also pretty short. So for 0:23:06.080 --> 0:23:10.080 one thing, it launched in late twenty sixteen, so CISO 0:23:10.200 --> 0:23:12.320 was wrapping up its first year in twenty sixteen. That's 0:23:12.320 --> 0:23:15.639 when VERV launched, and it was sort of a sister 0:23:16.000 --> 0:23:20.520 service to the anime focused streaming platform called crunchy Roll. 0:23:21.119 --> 0:23:25.720 Crunchy Role still exists. VERV was kind of a similar 0:23:25.840 --> 0:23:29.960 streaming service, but crunchy Role focused on anime. Vervewould end 0:23:30.040 --> 0:23:33.200 up getting lots of different content from all sorts of companies. 0:23:33.200 --> 0:23:37.119 They included companies like Geek and Sundry, which was really 0:23:37.320 --> 0:23:42.760 a YouTube studios channel. Rooster Teeth was another company that 0:23:42.800 --> 0:23:46.760 provided content to VERV, and other partners included College Humor, 0:23:46.800 --> 0:23:50.160 which would subsequently develop its own subscription streaming service called 0:23:50.240 --> 0:23:55.320 Dropout TV Mashinima dot Com, which we will talk about 0:23:55.359 --> 0:23:57.480 more in a second. So there's a spoiler. We know 0:23:57.560 --> 0:23:59.879 Mainama is not gonna last forever. They were also a 0:24:00.040 --> 0:24:03.720 partner with VERV. Shutter provided content to Verver for a while. 0:24:03.800 --> 0:24:08.239 Shutter is a horror based company Riff Tracks, which is 0:24:08.640 --> 0:24:10.399 made up of people who used to be part of 0:24:10.480 --> 0:24:13.960 Mystery Science Theater three thousand. They partnered with Verve for 0:24:14.000 --> 0:24:17.040 a while, and like crunchy Roll, verv wasn't over the 0:24:17.080 --> 0:24:21.480 top streaming service. It contained multiple channels of content ranging 0:24:21.520 --> 0:24:26.720 from animation to geeky lifestyle programming to horror, so you 0:24:26.760 --> 0:24:30.119 could log into the little service you know, you subscribe 0:24:30.160 --> 0:24:33.760 to Verve and you could access all this different stuff. 0:24:34.359 --> 0:24:38.280 So partners joined and dropped out of Verve over the years. 0:24:38.680 --> 0:24:41.040 So it's actually really hard to talk about what was 0:24:41.160 --> 0:24:44.600 on Verve because it all depended upon what year it was. So, 0:24:44.840 --> 0:24:47.040 like I said, at one point you had Shutter as 0:24:47.119 --> 0:24:50.040 part of Verve, and then Shutter would leave Verve in 0:24:50.080 --> 0:24:57.000