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Q&A: Caffeine CEO Ben Keighran Talks Fan-Focused Niche Sports Broadcasting

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Caffeine is a well-funded, newer live broadcasting platform for fan-focused, niche content for interactive viewing. With the platform now surpassing 40 million users, most of its content consists of long tail and local sports programming. With $262 million in financing raised since 2016, Caffeine is emerging as a destination for “sports you can’t find anywhere else.”

Nadine Krefetz: First things first: Who are you, and what do you do?

Ben Keighran: I’m the founder and CEO of Caf­feine. I’m a technologist who has built a few dif­ferent sorts of startups. I built a company in my 20s (I’m 41 now) that Apple ended up acquir­ing. It became the foundational elements of the App Store and iTunes. While I was there, I was responsible for the operating system and first-party apps for Apple TV.

At Apple, I learned a lot about the commer­cial business of TV and live broadcasting and television. I wanted to build a next-generation live broadcasting network somewhat similar to Twitch, but for all of live TV. I wanted to ex­plore new technology and new business mod­els and see if we could build a whole network for the next generation that might have a bil­lion people on it one day.

Krefetz: Is it working?

Keighran: In the last 12–18 months, we’ve gone from 3 million to over 40 million monthly ac­tive users, with an average viewing time of 38 minutes per month.

Krefetz: What’s your business model?

Keighran: We have a free-to-watch live-stream­ing service for niche sports (not the top 100 sports like NFL and NBA). We give those sports leagues huge distribution through our platform. They are able to reach more people than they can when they go on YouTube and other places.

We get the content for free, and we distrib­ute it for free. We monetize through pre-roll advertising. We have programmatic networks and a direct-sold business. We revenue-share with these sporting organizations. We’ve start­ed to add in Patreon-type features where you can subscribe, or in some cases, do an in-app purchase for some special content from one of these creators.

A creator on Caffeine can be an individu­al, but it’s most likely an X Games, World Surf League, Ball Is Life, or someone along those lines. So, free-to-watch service, non-exclusive content.

Caffeine sports league partners

Caffeine’s partners include a number of sports leagues.

Krefetz: How much money did you get and from whom?

Keighran: We’ve raised $262M since 2016 from investors including Andreessen Horowitz, Greylock, Fox, Sanabil Investments, Cox En­terprises, Disney, Riot Games, and more.

Krefetz: How do you attract viewers?

Keighran: We distribute content across a net­work of sites that sports fans visit. When fans see content through our player, they can tap through to our website and app to create an ac­count, follow creators, get notified when they go live, and support creators through in-app purchases.

Krefetz: How many sports partners do you have?

Keighran: We have over 50 active partners providing in-season content, whether as live events, recorded events, or podcasts about re­cent sports events.

Krefetz: How do users find and view the content?

Keighran: Leagues have profiles on Caffeine, which fans can follow to get notified when new content from that league goes live. And users view it in our app.

Krefetz: What makes Caffeine different?

Keighran: We’re providing a new experience and a home that brings all kinds of content and fans together. The hook is discovery. If you look at sports leagues on YouTube, you’ll see views declining. There are different sports leagues with niche audiences all over the world, and they can’t get discovered anymore. We’re build­ing a home and super-serving those commu­nities. Caffeine is for sports you can’t find any­where else.

Krefetz: Ultra-low latency is critical for interactive sports streaming. How do you achieve it?

Keighran: I started with WebRTC 8 years ago. I believed 190-millisecond latency would create this intimacy in the stream and would start to create a new category for live streaming. It worked for small streamers, up to a few mil­lion users a month, but it wasn’t going to go from a couple million to 40 million. When I got a lot of money from Fox and Disney to buy con­tent, that allowed us to really scale up and get some incredible results with our streaming tech (see Caffeine CTO Michael Dale’s blog).

In 2020, we were the first company to stream to 100,000 people in real time. Amazon today has only done that to 10,000 people. It was real­ly expensive to run, and it wasn’t the right sort of flywheel.

Krefetz: Are you still running WebRTC?

Keighran: WebRTC is very expensive to run, and it’s not needed for most of our use cases today. We’ve built our own real-time CDN with physical locations throughout the U.S.

We’ve also been working with AWS Cloud­Front on low-latency technologies like DASH and low-latency HLS (LL-HLS). We have all these different fallbacks. Some of our streams—depending on the size of live sport that we’re streaming—will get up to 2 million viewers.

We’re going to use LL-HLS or HLS, etc. But if there’s a new community with people on camera that can really take advantage of the interactivity, we’ll come back to WebRTC.

Krefetz: How much content is low latency versus other?

Keighran: All of our live streams are delivered with low latency.

Krefetz: What is a typical chunk size for low latency?

Keighran: We have 2-second segments. Within that, we deliver parts via LL-HLS and contin­ued HTTP chunk transfer against every frame available in the case of LL-DASH.

Krefetz: What platforms are people viewing on, and how do your viewers break down demographically?

Keighran: Ninety-seven percent of our viewers are generally on mobile, viewing in 720p or 1080p. Ninety percent are U.S. viewers, 73% under the age of 35. We had a mobile record viewing for a single live stream. We have one content creator that gets an average watch time of 260 minutes, with hundreds of thou­sands of tuned-in users.

Krefetz: Earlier, you mentioned monetization through pre-roll ads. Are you running other advertising now or just pre-rolls?

Keighran: Just pre-roll, a 15-second pre-roll. It’s one ad before the content. We launched our ad­vertising in March of this year. Our ad server is SpringServe, and we have about 10 or so dif­ferent programmatic providers, including Xan­der, The Trade Desk, Unruly, Google Ads, and OneFOX, which is Fox’s programmatic network for all of their stuff.

Krefetz: What are your CPMs?

Keighran: CPMs are as high as $17.

Krefetz: The ad load of one ad seems so small.

Keighran: You’ve got hundreds of millions of video starts a month that are happening right now, which is growing exponentially. Our fill rate is fairly low, but this is what happens when you first step into these markets—we’re now 6 months into it. It takes a little while to set your floor for what your CPM is going to be. You want it to be a premium service, a way to target these younger demographics on a mobile for sports. We’ll do mid-roll and integrated branded deals. We have done a handful of direct sold deals, and we’re trying to open that up.

Krefetz: When I went to your site, I didn’t see any ads. Are you running ads on all video starts or only live content?

Keighran: We run ads for live and on-demand video. We minimize ads to encourage deeper social engagement on-platform at this stage of Caffeine’s growth.

Caffeine mobile audience stats

Caffeine’s mostly mobile audience stats

Krefetz: Is the advertising targeted or contextual?

Keighran: It’s targeted. We’re using location, designated market area information, platform, and the content partner. If they’re a registered user, we’ll also look at age and gender.

Krefetz: Do you have subscriptions?

Keighran: You can subscribe to a creator. With this feature currently in beta, we’ve only got a handful of partners. These individual creators do have a lot of subscribers given how early it is. That’ll be another business as we open up into 2024; we want to give sports leagues the options of subscription, base, or pay-per-view too.

Krefetz: There’s research that says certain sports are losing viewers and not getting people to watch their full games.

Keighran: There’s no question around going to short-form on-demand content. Long-form ap­pointment-viewing content is not the most pop­ular thing at this point. Jeff Bezos once said he gets involved in ideas where it’s impossible to imagine a certain outcome not being the case. I think it’s impossible to imagine that the type of content we offer—live competitions that ha­ven’t been seen before, viewed with other peo­ple excited to see the outcome—is going to go away. Humans are going to compete in some way, shape, or form around things like sports. What I love about live competition is that it brings people together. It could be 10, 10,000, or millions of people with a shared passion for something all viewing it simultaneously.

Krefetz: For a team or a league, how do creators get you the content?

Keighran: The same way that they send it to YouTube or any other platform that will ingest live streams from people. And we’re using SRT, which gives us the variability of receiving dif­ferent formats in different ways.

We can ingest WebRTC if needed, and there are also tools for fans using OBS. When I first began Caffeine, I wanted to go all in on WebRTC. I put boxes in physical data center loca­tions and hooked them up myself. OBS didn’t work with WebRTC. We used Windows soft­ware. Now, OBS and StreamLabs support all the things that we need.

Krefetz: Do you still run your own CDN?

Keighran: No. We have a partnership with AWS CloudFront, and our video stack is sit­ting on AWS.

Krefetz: How do users make purchases on your site? Are you printing your own money?

Keighran: Well, theoretically. People can earn or pay for a centralized virtual currency called Caffeine Gold and use it to purchase virtual items during a show. It’s like going to a live sporting match and buying a jersey, hat, or phone—it’s something to engage with fans.

If you’re watching skateboarding, you could buy a 3D skateboard, and it’s doing kickflips and spinning around on the screen. It’s a way to really stand out in the crowd and support the content. Fifty percent of the value of that item goes to the content creator, and they can cash it out for real money.

Krefetz: How are these 3D things created?

Keighran: We create them. It’s a pretty small part of the community right now. Advertising is the main way we make money, but these in­teractive features are really fun, and people do use them.

caffeine content delivery schematic

A Caffeine content delivery schematic

Krefetz: What about other low-latency features and interactive functionality?

Keighran: Viewers can get an immediate re­sponse from the person behind the camera, with no lag. Our real-time reactions allow for fan voting using “likes” on messages, and we of­fer fans the ability to purchase “props” and get instant reactions from the creators and fans.

Krefetz: Is it the same with regular live streams?

Keighran: All of our live streams are low laten­cy. For on-demand content, viewers can also leave comments and props to engage with cre­ators and fans.

Krefetz: Which of these features is the most popular?

Keighran: Real-time streaming that generates immediate creator and fan reactions is where we get the majority of our feedback.

Krefetz: How do you handle detection of copyright infringements?

Keighran: On-platform, we have a team of mod­erators as well as a few agencies that observe streams on our platform. We have automated reporting, and we also support user reporting of content.

Krefetz: Have you built everything that you’re using?

Keighran: Within reason. We’re doing some AI stuff right now with some open source lan­guage models. We’ve either written or cobbled together the platform to get to this point.

Krefetz: Usually, the challenge of having built all of the key things is that you have to continue to manage them.

Keighran: Absolutely. The problem with the strat­egy of doing things in their ascendancy is that things haven’t been built for you, so you have to build more than you would normally need to. I would say we’ve probably over-rotated on try­ing to build too much stuff ourselves. I think we’re getting to the point where we’re finding a good balance.

Krefetz: Tell me more about aspects of the platform that you’ve customized.

Keighran: The first thing is, on the ingest side, you can provide SRT, WebRTC, and RTMP. We’re also providing multiple ways for people to broadcast as well: WebRTC, LL-HLS, HLS, LL-DASH, and DASH. If something is reliant on WebRTC at scale, Caffeine has done 100,000. Drake brought battle rap, which gets huge au­diences with live voting in real time during the competition. We provide automatic replays and upcoming guides attached to email push notification, all the way down to custom props and virtual currency.

Battle rap on Caffeine

Battle rap on Caffeine

Krefetz: Can I assume the low-latency content doesn’t have any rewind functionality?

Keighran: Correct. We do not offer rewind func­tionality on live content at this time.

Krefetz: How is live-to-VOD clipping done?

Keighran: This operates against an AWS Lamb­da leveraging an FFmpeg layers stack. It gen­erates a flat MP4 operating directly against the LL-HLS CMAF stream facilitating live clip­ping up to a second or two from the live edge that has been delivered to the end user.

Krefetz: What about inserting ads in WebRTC for mid-roll?

Keighran: That’s part of the reason we start­ed with pre-roll. We do have some capabilities around interstitial ads with WebRTC, although we’ve never done it publicly.

Krefetz: What are some future ideas you can share?

Keighran: I want to take Caffeine internation­al. I want to take it on connected TV with real-time WebRTC. I think it’s going to be killer when there are enough VR headsets out there one day. It will make a phenomenal VR experience.

In the post-cookie world, you’ve got to know more and more about the user. In addition to getting people’s credit card details, we’re go­ing to want to do subscriptions, pay-per-views, and in-app purchases with that virtual cur­rency and props.

With real time, you can get into things like betting and ecommerce. With AI, you can make short-form content highlight reels. One of the things we used to think about a lot at Apple was, what are the technologies that are in their ascendancy that are going to be really import­ant in the future?

When events are live and people are pas­sionate, is it better to interrupt them with an interstitial ad and try to direct them to a prod­uct they may want to buy right now? Or is it bet­ter to sell them something in the chat right now that they can use with everybody else that’s there while they’re watching?

I would argue that the pre-roll ad is fine be­fore we get into the show. But once we’re in the show, what’s the best way to monetize that au­dience? I want to find that right balance and get that experience right for everybody. I’m inter­ested in doing branded virtual currency.

Krefetz: These unique things are not programmatic.

Keighran: In 2024, we’re going to build an ad sales team to do more direct-sold deals. We’ve tried to work with our investors on what’s the best way to sell all these different ads.

Krefetz: Have you looked at the FAST distribution model?

Keighran: From the standpoint of putting FAST on Caffeine, that is another thing I’d definitely look to do in 2024.

Krefetz: How will you even out peaks and valleys so there’s always something live on the app?

Keighran: We are bringing on more content partners across more time zones, and we will also see more live replays of content on the platform. Anyone in the community can also go live at any time.

Krefetz: Is the company profitable now, or when do you expect it to be so?

Keighran: We are expecting to be cash flow-positive in 2024.

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