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Acorn TV and DramaFever: Niche Video Thrives With Foreign Flavor

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Netflix, Hulu, and Amazon might get all the attention, but there are more streaming services around than just the big three. The giants stream to the masses, offering the most content they can provide for a variety of tastes, but they still manage to leave plenty of room for other companies to grow. Acorn TV and DramaFever are building an audience with targeted libraries of international content.

Acorn TV is for the Anglophile, especially one who loves to curl up with a good mystery. DramaFever offers a slate of mostly South Korean romances, comedies, and reality shows ready to transport viewers half a world away. Their histories couldn’t be more different, but the results are the same: They satisfy mostly U.S. viewers who want to immerse themselves in another culture.

Acorn TV Takes Root

Acorn started more than 20 years ago, long before streaming video took hold, by importing British television shows to the U.S. first on VHS, and later on DVD and Blu-ray Disc. At the time there were far fewer outlets for British programming in the United States. As a result, Acorn’s catalog found a niche but enthusiastic audience.

Acorn TV -- the company’s streaming service -- began in July 2011. Acorn works by subscription: Viewers currently pay $4.99 per month or $49.99 per year for Acorn Premium, which gets them free standard shipping on any catalog purchases, as well as all the online content they want to stream.

The Acorn brand, as well as two other brands owned by the company -- Athena and Acacia were purchased a year ago by BET founder Bob Johnson. He combined the Acorn brands with another of his acquisitions -- Image Entertainment, based in Los Angeles -- and created RLJ Entertainment.

Business has been good at Acorn, thanks to a certain English program that calls PBS home.

“Since "Downton Abbey," all of the sudden everybody loves British television, which has been really great for all of us who work in that area,” says Jen Linck, vice president of Acorn TV.

Acorn has catered to lovers of British mysteries and dramas since its VHS beginnings, and that’s still the company’s stronghold. The streaming service offers comedies and documentaries as well, but those who love sleuthing for clues will be happiest. While physical media may be on the decline, Acorn’s customers -- whom Linck describes as “slightly older” -- still buy DVDs. In fact, one of Acorn TV’s prime uses is as a marketing vehicle for the company’s DVD catalog, which is the bigger money-maker. As of this writing the service has nearly 70,000 paid subscribers, more than three times what it had at the end of 2012, and is adding thousands of new customers each month.

Acorn TV specializes in British mysteries and dramas, like "Doc Martin."

DramaFever Catches Some Heat

DramaFever started in 2009 when Seung Bak and Suk Park, two young men who had been friends at the University of Rochester, noticed that a sizable online community was building around Asian video. People were going to great lengths to seek out and share shows from Korea, China, Japan, Taiwan, and other countries. That might not be remarkable if the demand was coming from transplants, but the pair noted that millions of Americans who weren’t of Asian descent were working together, writing subtitles, creating recaps, and sharing information on online forums.

“This was back in 2008 when we started noticing this, and to me that just screamed pent-up demand, right?” co-founder and co-CEO Bak says. “I mean, how badly do you must want to watch the content? You have to really go out of your way to go watch largely illegal, pirated content.”

If someone could package the same content, the pair reasoned, they could probably build a large business around it. Since no one else was jumping in, they decided it might as well be them. After pooling around $300,000 in savings, they started cold-calling Korean broadcasters hunting for rights. While it took some time, they were soon able to launch with a slate of around 50 titles.

People noticed, and soon the pair were growing their site visitor by visitor, title by title. While they had to bootstrap the initial investment, investors also noticed their success. DramaFever raised an additional $11.5 million from investors that include AMC Networks, Bertelsmann, NALA, and Softbank.

Unlike Acorn TV, DramaFever shows are free to view and ad-supported, with ads shown every 10 minutes. A premium ad-free membership that includes HD streaming sells for $9.99 per month. Bak says half the company’s business comes from selling ads, 30 percent from syndicating content to sites like Netflix and Hulu, and 20 percent from subscriptions. The site currently gets 15 million unique visitors each month. Bak did not say how many paid subscribers DramaFever has.

Seung Bak and Suk Park started DramaFever when they realized there was a pent-up demand in the U.S. for Korean TV shows like "Heirs."

Acorn TV Travels the World

Since the BBC has its own distribution in the U.S., with the BBC America cable channel and a DVD business, Acorn TV subscribers won’t see a lot of BBC content. Instead, Acorn works more with ITV, DRG, All3Media, and Freemantle.

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