Wednesday, October 29, 2014

MCN Whistle Sports Scores $7 Million from BSKYB -- Here’s Why

Truly, the MCN world doesn’t sleep -- we are seeing a constant barrage of major strategic developments in the world of short-form video and mobile/digital-first strategies.

The latest data point?  Leading sports-focused MCN Whistle Sports -- still early in its first quarter (it only launched this past January) -- just received another $7 million investment from UK-based broadcasting giant BSKYB.  And, expect more significant sums coming soon to Whistle Sports -- which I just recently profiled the company and interviewed CEO John West here on my blog -- as part of its still-open Series B round.  This news follows Variety’s report just in the past couple days that Luxembourg-based RTL Group has acquired fashion-focused MCN StyleHaul.

Ahh yes, the growing internationalism of MCNs.  It ain’t just for U.S.-based media companies anymore (let’s not forget German-based media giant ProSieben's major investment in Collective Digital Studio and own Euro-based Studio71 which now aims to expand across the pond to the U.S.).  And, the rationale in this case is clear (just as it is in the case of StyleHaul).  Language is rarely a barrier in sports content, meaning that sports (just like fashion) travels well.  And, BSKYB -- already heavily and long-invested in sports -- can help to accelerate Whistle Sports’ international expansion (while it itself begins to play more aggressively in the mobile and digital-first content world, just as all other major “traditional” media companies need to be).  The Whistle -- which essentially is a digital and mobile-first ESPN for millennials, by millennials -- had just recently opened a London office.

Whistle Sports now scores 8+ million subscribers and 1.25+ billion video views, despite the fact that it is still early in its game.  That means that its growth is impressive.  And, BSKYB’s investment brings the company’s overall investment to $25 million from long-time media giant Bob Pittman and others.

I know Whistle Sports well -- and am proud to count it as a client and congratulate them on yet another major strategic victory.  I was first drawn to this MCN due to its impressive list of partnerships with virtually all major U.S. sports leagues, including the NFL and the MLB.  Being a deal guy, I know that finalizing deals with major players like those notoriously challenging and complex organizations are no small feat.  That reflects a highly talented and experienced executive team, led by CEO John West whom I have come to know.  And, impressive they are.

Whistle Sports -- always high on my MCN “hit list” for major strategic moves (others include StyleHaul (gone), Mitu Networks and DanceOn).  Not M&A yet.  No need to go deep when you have a team like BSKYB helping you to rush your international play-book ahead to an eventual major liquidity victory.

Monday, October 27, 2014

StyleHauls It In from Euro-Based RTL Group -- Here’s Why

The MCN world rests for no one.  While the LA-based digital media world was readying itself for the weekend this past Friday (and I served as Best Man at a mega-wedding for my best friend of 45 years, Chad Hummel -- with whom I work at Manatt), Luxembourg-based RTL Group reportedly swooped in to buy leading fashion and beauty-focused MCN StyleHaul (I just recently exclusively profiled StyleHaul and its charismatic CEO Stephanie Horbaczewski here on my blog).  Terms undisclosed (although I am confident that the final price-tag is well north of $100 million).

No surprises here, apart from the unusual timing of the breaking news.  RTL already owned a minority stake in StyleHaul, previously investing $6 million.  And, Stephanie’s company has long been thought to be in M&A “play” (although US-based media companies were rumored to be the leading candidates in those reports).  In fact, just last week I moderated a panel at the Variety Summit in LA focused on the fast-breaking digital world -- and predicted on the record that StyleHaul would be the next leading MCN to be gobbled up (just in time for the Thanksgiving season -- ladies and gentlemen, how about THAT at 5 am!) (I repeated this prediction on Friday in an interview with the Los Angeles Business Journal that was just published this morning).  In the past few months alone, Disney buys Maker Studios.  Next, AwesomenessTV buys Big Frame.  Then, Otter Media buys Fullscreen.  And, now this.

Why StyleHaul specifically and MCNs in general?

(1) RTL already knows the company and its management team, since it already had been a major investor and board member;

(2) The fashion and beauty vertical market travels well -- style truly is international and speaks no language and this MCN’s 199 million network subscribers are truly global, which is perfect for an international company like RTL Group;

(3) Fashion and beauty products sell!  And, that makes StyleHaul’s business model somewhat unique amongst MCNs, enabling commerce to be a potential significant (and perhaps dominant) video-fueled revenue stream for the company (in addition to more typical ad revenues and sponsored/branded content opportunities); and remember, StyleHaul need not split any of commerce revenues with YouTube;

(4) StyleHaul is one of the largest and fastest-growing vertically-focused MCNs with over 17 billion network video views and 4,900 network channels; that’s a lot of content;

(5) MCNs in general have sprung up as a result of two primary realities: (1) our video world is increasingly (dominantly?) mobile -- and that means consumers are increasingly thirsty for the kind of short-form video content that is the MCN world’s specialty; and (2) those mobile-thirsty consumers are heavily the advertiser-coveted millennials who frequently forego traditional video programming in favor of the YouTube economy and non-traditional YouTube video “celebrities”; I have written about this reality over and over again.

Congratulations to Stephanie and her team.

And, we ain’t finished yet.  More vertically-focused MCNs will be swallowed up in the near-term.  Here are my previous predictions (which ain’t bad so far -- 2 of the 7 are now gone; so check out the 5 remaining).

Tuesday, October 21, 2014

Let’s Meet at SLUSH in Helsinki, November 18-20

Yes, you heard me right.  What better time to travel to Helsinki, Finland for a tech conference than in the dead of Winter -- when it is icy cold, slushy (hence the name) and limited sunshine?

And, that’s the point!  The organizers of SLUSH -- the premier tech conference focused on the white hot Eurasian tech and startup scene -- have a sense of humor.  A far cry from the tedious endless sunshine, heat and oceans that serve as the backdrop for SoCal-centric tech conferences.

SLUSH is “under the radar” for most in digital media and tech here in the States.  Top blue-chip investors (both State-side and outside our borders), media and tech execs will attend.  I will too, wearing multiple hats (and gloves, a scarf, boots) -- as a digital media/tech advisor, investor, and journalist.  My goal is to meet the top influencers and innovators in that part of the world in which so much innovation is happening today -- and to help connect the dots for many of them with opportunities and influencers over on this side of the Pond.  And, simply, to tell their stories -- because more of these Eurasian tech stories deserve to be told ... and heard.

Let’s meet at SLUSH.  Reach out to me via LinkedIn to schedule a meeting.

Being a Minnesotan -- and having grown up in that frozen tundra -- I say, “bring it on!"

Monday, October 20, 2014

D3 -- Disney Demo Day -- Graduation for 1st Accelerator Class

Last Tuesday marked graduation day for the Disney Accelerator’s first class -- the Class of 2014.  10 companies.  10 compelling stories to tell.  And, 10 CEOs who told those stories very well indeed.  (Here they are, each of them, pitching in 6 seconds, yes, 6 seconds a la Vine.)

Not surprising when you think about it.  First, the material is good.  Each company has real substance.  No fluff here.  Disney and TechStars selected them well (kudos to Kevin Mayer and Cody Simms).  Second, each company was in good company -- in the company of the Mouse House, that is.  The quintessential home for story-telling.  And, the Disney team delivered.  Production values for this demo day were second to none.  The Disney Accelerator team turned it up to 11 for this one, giving each company's CEO an opportunity to be Steve Jobs for the day.  There each of them was.  On a sparse stage, in a darkened auditorium, massive screen behind them, visuals choreographed perfectly to their perfectly constructed individual words -- words spoken while pacing slightly back and forth across the stage with hands clasped a la vintage Jobs.  He would be smiling ....

It all worked.  Beautifully.  Each company showcased well.  Each company CEO had trained for his or her moment for days.  But, no matter how much training, it ain’t easy for a young entrepreneur when you have Disney's CEO Bob Iger right there in the front row.  Yet all of them delivered.  (Only later did I learn that a giant teleprompter aided them from the very back of the auditorium -- but, that does nothing to take away from each individual performance).   (Here is The Wrap’s wrap-up of the event.)

My favorite?  Tyffon -- the app developer with proprietary facial recognition technology that has developed Zombie Booth to a tune of 30 million downloads (Zombie selfies, anyone?).  Of course, I am a bit partial here, since I mentored this company in the Accelerator (my stint started in July).  Others that stood out for me included Naritiv, a Snapchat-centric marketing and analytics firm (intriguing) and Sphero, an already-proven and established "connected toy” company that sells its wares at Apple stores (join me by buying one -- your kids will be glad you did -- YOU will be glad you did).

All of these Disney Accelerator company CEOs and teams should be proud.  They have accomplished much already.  And, they have a permanent feather in their caps as a result.  Not too shabby to have the Disney stamp of approval.

I too enjoyed it -- enjoyed being an official Mentor for the inaugural Class of 2014.  And, ready to help some of these grads continue their journeys.

Sunday, October 19, 2014

Sometimes You Just Gotta Take the Time ...

I live in San Diego.  But work in LA.  That means I commute weekly and regularly spend a couple nights in LA -- nights in which I jam, jam, jam on work when I am not out at dinner meetings or evening events. My typical rhythm on those nights is to hole myself up in my hotel and bang it out -- catching up on all of my correspondence of the day.  And, that means that I too rarely take the time to do anything else in those moments.

But, sometimes you just gotta take the time .... 

I am a runner.  Have been for years.  And, LA has some of the most picturesque running spots in the world.  The canyons -- and, of course, the ocean.  

My office is only a few miles from that beautiful ocean in Santa Monica.  So, one night a few days back, I put aside my work for a couple hours and made that few mile (but several driving minutes) trek to Santa Monica, strapped on my running shoes, insert my ear-buds, and just ran ... along the coast ... on the boardwalk ... watching others like me as I passed them by.

As the sun set on that beautiful night, I listened to M83’s epic song “Wait” over and over again -- dialed up to 11 (I suggest you try it -- trust me on this one -- it is the perfect soundtrack for these moments).  I finished my run.  Watched the sun set.  Captured this shot.  And vowed to do it more often.

Life is short.  It is easy -- too easy (particularly in the hyper-fast tech world) -- to stay heads down all the time.  God knows I do, especially when away from home.

But, just like I tell my kids, sometimes you just gotta “look up” -- and soak it in ...

MDM Newsletter #2 - “Brands & Media Edition -- The Opportunity"

We here at Manatt Digital Media (MDM) just published issue #2 of our monthly newsletter -- this time, the “Brands & Media Edition -- The Opportunity.”  It is truly jam-packed with timely helpful pearls o’ wisdom about how brands can capitalize during our digital media transformation.  Articles include:

(1) “Top 10 Legal Considerations for Brands Involved in Digital and Social Media Advertising”

(2) “Brands, the New Media Companies/MCNs?  Red Bull and Now Marriott”

(3) “Case Study: Manatt Digital Media Accelerates a Beauty Products Company’s Transformational Shift Into a Full-fledged Media Company”

(4) “Welcome to Hallyu-wood! The Addiction to Korean Dramas -- Why Big Brands Should Be Watching”

(5) “MDM Client Company Spotlight: Whistle Sports”

(6) “MDM’s Advertising Expertise and Spotlight Profile”

This follows MDM’s Newsletter #1 -- “The MCN Edition” -- another must-read about ... you guessed it ... all things multi-channel network-ish ....

If you find these newsletters helpful, interesting, thought-provoking, inspiring, provocative, intriguing --  or at least not boring and useless -- then subscribe.

Monday, October 13, 2014

Congrats j.viewz - Surpasses $60K Kickstarter Goal for Music DNA Project!

Thanks to all who helped Jonathan surpass his goal -- and give more life to his incredible DNA Project! Check out his Kickstarter Link right here.  Great innovative way for music fans to understand the full story(ies) behind your favorite songs -- and for artists to engage with their fans like never before.

Friday, October 10, 2014

DramaFever, the Next Digital Video M&A Mega-Deal? Here’s Why (& Why "Korean Drama” Matters)

Yesterday, rumors began to swirl about leading, but little known, Korean “drama” site DramaFever -- that it is in M&A “play” right now for a deal valuing the company up to $140 million.  The potential buyers?  AMC Networks and European broadcast group RTL Group.  Earlier, Barry Diller’s IAC had been rumored to be kicking the tires.  In any event, DramaFever, which has raised $11.5 million to date and is reported to generate $20 million in revenues, highlights the power of the “Korean Drama” -- a genre of video content that most of us know very little about.  But, clearly many in the U.S. must, because 85% of DramaFever’s audience is non-Asian.
Eunice Shin of Manatt Digital Media, and a long-time digital media expert who is steeped in the overall digital video and MCN space, sheds light on this stealth genre and phenomenon -- and why Korean Drama (and related genres) “matter.”  I consider this guest post (originally published on her LinkedIn profile under a slightly different title) to be a “must read.”  Here it is.
The Korean Drama is the Perfect Case for the New Globalization of Content

For the vast majority of global citizens participating in this social world, we are all too familiar with the phrase “oh-bba Gangnam style”. Psy’s Gangnam Style video is one of the most globally viewed videos of all time with over 2 billion views. Yet to grasp scale, Psy’s popularity is only a very small portion of the overall Hallyu movement - the term referred to the Korean Wave or Korean Fever, the global fascination with South Korean pop culture and media known as KPop. Hallyu emerged in the 1990s in other parts of Asia, but the movement has been propelled into a true international market with the global growth of online and mobile content consumption.
The two strongest areas of interest in KPop are in music and TV content. The popularity of KPop music is often covered and well known. And now, TV drama series known as KDramas are grabbing the attention. The typical KDrama is most similar to what we know as a mini-series in the U.S.. They often tell a complete story in one series, self-contained typically in 16-24 episodes. With dozens of new shows produced each year, with a constantly revolving list of featured multi-media talent, there is no shortage of KDrama fandom.
With a deeply engaged and loyal audience, KPop is widely consumed not just in South Korea and throughout Asia, but has rapidly growing fans from Latin America and the United States. In the U.S., English sub-titled KDramas are most popular on YouTube and streaming sites DramaFever, Crunchy Roll (KDrama), Viki, and MNet America, as well as select content available on Hulu, Netflix, Amazon and iTunes. KDramas are more popular than ever with millennials, especially with 18-24 year-old American women, not of Korean heritage. DramaFever reports that 85% of their audience is non-Asian, with 45% being Caucasian and 25% being Latino.
No surprise that this premium content has sparked the interest of global investors, romanced by that growing, global loyal fan base.
In December 2013, The Chernin Group acquired a majority stake in Crunchy Roll, an anime and Asian drama streaming site, for roughly $100 million. In the months that followed, Crunchy Roll spun-off a Korean entertainment focused site called Kdrama, featuring a library of dramas, variety, and music shows. In May 2014, Crunchy Roll acquired Soompi, a Kpop news publisher and community website. And in recent days, it was announced that Kdrama and Soompi would rebrand to form SoompiTV. Currently, most of SoompiTV’s content is only licensed for the US and Canada, but they are working on gaining licensing rights to the global audience. Impressively, Crunchy Roll and SoompiTV – distributors of KPop and other Asian content - are part of the first few video services invested in and managed by the highly regarded The Chernin Group/AT&T OTT joint venture, Otter Media.
In September of 2013, Japan’s Internet e-commerce giant Rakuten purchased Viki, a premium video streaming service run out of Singapore, featuring Korean dramas and other Asian content. That deal was rumored to be at $200 million.
And now, with close to $20 million in revenue this past year and a very global audience, DramaFever is another leader in the KPop/KDrama media space. With a rumored valuation near $120-140 million, Drama Fever is being pursued and courted aggressively. To date, DramaFever has raised $11.5 million from investors that include AMC Networks, Bertelsmann, NALA, and Softbank.
These are some serious bets being placed on the global value of KDramas as a major media asset. Here’s why more media companies and brands will be addicted:
1) Deeply engaged, fiercely loyal global audience
Not too long along ago before many of the streaming sites had international licensing rights, KDramas had limited availability outside of South Korea, and pirated videos made their way around the world fueled by the crowd-sourced, multi-language sub-titling of popular series. A large community of fans were dedicated to making this content available, and the loyalty and following of audiences are still reflected in the ongoing virality of what many would deem as obscure, foreign content. Today, sub-titling is still crowd-sourced on sites like Viki and YouTube, with the more popular KDramas sub-titled in over a dozen different languages.
Throughout Asia, the content has cross-generation appeal, with both men and women. Earlier this year, a very popular series, MyLove from the Star, debuted in Korea and had an average viewership of 24% in Korea. It then sold rights to China where it’s been viewed online through iQiyi, a Chinese video streaming platform, over 14.5 billion times. The series finale was so widely anticipated and watched by all ages, that Chinese news outlets covered people calling in sick and taking time off to watch the finale and alluded to the high probability that the national productivity of China was impacted by the fandom around that show.
2) Deep library of addictive, binge-watching worthy content
With the soap-opera like cliff-hangers commonly written into each episode, coupled with the availability and ease for online and mobile consumption, KDramas are ideal for binge-watching through the series. I’d even argue that KDrama fans were the originators of binge-watching. There are hundreds of past KDrama titles, with constant, year-round production of new content. With this rich library, DramaFever reports that their subscribers watch on average 54 hours (3,234 minutes) per month. In comparison, subscribers on Netflix and Hulu are reported at monthly average views of 644 minutes and 223 minutes per month respectively.
3) Growing interest in the KPop Lifestyle
This past summer at the KCON conference, an annual K-Pop convention held in Los Angeles, attendance doubled from the previous year to over 42,000 in attendance, with nearly 40 percent coming from outside California. Most of the attendees were female, and less than 10 percent of the attendees were of Korean heritage. KPop is not only relevant in music, TV and film, but it is making significant plays in fashion lines, and even skincare and makeup. There is also a very large global following of Korean beauty content creators on YouTube, furthering the allure and appeal of the KPop lifestyle with a highly engaged audience.
However, there are some growth and improvement areas that KDrama creators and distributors will need to address to fully optimize and monetize their assets for this growing global audience.
  • Ad/Subscription Model: Currently, the majority of content distribution is supported via ad revenue. On subscription sites like DramaFever and Viki, audiences can subscribe to avoid ads. But given the well-known work-arounds (hint: use Apple TV to watch ad-free) and fans used to dealing with irrelevant ads, it’s going to take more sophisticated features and services to convert a larger number of people to a paid subscription model. Additionally, there is an opportunity for more sophisticated and targeted advertising. On one of the more popular streaming sites, with use of my Facebook login, it repeatedly rolled a 15 second spot from a utilities company, 3 times in a row to make up the 45 second spot. Perhaps the right brands and advertisers just haven’t come yet. Or perhaps it was a strategy to drive me to subscribe to avoid the annoying, irrelevant ads. Either way, this is a clear opportunity for both brands and streaming platforms.
  • Discovery: Just like the rest of online content, discovery of premium content in the crowded and confusing space is often a barrier to entry, and is certainly the case for KDramas. Many rely on social community boards for recommendations and reviews. An interesting feature for one of the streaming services could be to curate and recommend shows based on interest and watching profiles.
  • Cross-over of KPop Talent: Fans of KPop stars in Asia are rabid. Simply put, they make the Beliebers look harmless. Just don’t tell them I wrote that! The most popular KPop stars are singers, dancers and actors, with numerous endorsement deals in Asia. However, the artists themselves have yet to make as strong of a cross-over to English-speaking fans as they have in Asia. Perhaps it’s because many of the stars haven’t mastered the English language yet, or perhaps it’s because the management companies who control their careers are not apt to monetizing on the global scale.
  • Brand Integration: Product placements and brand integration are seen with every series. But it is obvious that most of those brands are still just aimed at that first Korean audience, not considering the global market thereafter. This should spark the interest of global brands to consider. It’s a clear opportunity for the industry as a whole and a definitive growth area for further monetization.
  • Rights/Licensing: Lastly, many of the distribution rights and licensing deals are still less than sophisticated and strategic. For example, My Lovely Girl (aka She’s So Lovable), a highly anticipated new series starring Rain concurrently broadcast in South Korea, is available in the US on DramaFever, SoompiTV, Viki, and on YouTube. Streaming services are fighting for the same audience with often the same content. For streaming services to differentiate, service features may not be enough. Licensing deals are bound to evolve. At the same time, building a licensing model with restricted access will be a challenge, especially for content that got its catapult from bootstrapping, resourceful, rabid fans.
As seen with the industry and ecosystem around KDramas, the growth and monetization of global content are still in its infancy, with great opportunities for distribution licensing/rights, brand integration, advertising and subscription models to advance.
Fun fact: Korean management companies are run much like the old studio system, where the studio contracted talent, and only made movies around those contracted artists. Similarly, Korean management companies target and manage talent, often with the triple threat formula in singing, dancing and acting. Many of the KDrama are cast with stars who are solo artists or a member of a group, who are trained, cast, produced and promoted by the same major management company. Korean management companies constantly scout and train new talent, and are often seen as cut-throat, talent factories. Implied criticism of this system comes as no surprise.
Eunice Shin is a Director at Manatt Digital Media (MDM), a deeply connected and entrepreneurial team, providing unparalleled, multi-disciplined services in business development and acceleration. MDM is at the forefront of digital innovation and multi-platform strategies - globally recognized as thought leaders and connectors in the digital media space. MDM’s unique perspective is through the lens of seasoned entrepreneurs, strategists, lawyers, analysts, venture capitalists, and incubators – working together to connect the digital media world. Eunice is a seasoned industry executive, passionate in partnering with innovative and transformational companies to accelerate business, creating competitive advantage and growth opportunities.