The Value of Building Organic Streaming Service Offerings
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Allan McLennan: Is it better to build an organic service offering that puts out and establishes the overall base of the viewer--of your market--or is it something to actually go forward and get the funding to be able to build an overall service prior to having advertisers' support, subscription support? Which is the better goal in building a service that viewers want?
Roland Martin: Organic! Organic, unless you have vast sums. Look, there are only two ways to build something: It's going to be organic or you're going to market the hell out of it. PragerU. People talk about how PragerU got a billion views on YouTube. Why did PragerU get a billion views? Because they raised $27 million their first year, kicked off by a couple of rich conservative billionaires from Texas. Let's see with them 7 million. What did they do? They ran a ton of ads on YouTube, and it's driving that number. I was watching somebody's video the other day. And I said, "They got a million views for this particular 30-minute video. Then I saw the engagement: 25 comments." So I told my digital guy. What are they doing? They were running ads like crazy. If you do not have that level of resources to market and blanket the marketplace, digital ads, billboards, all those different things, then it has to be organic.
And so when we've had conversations, when I've talked to advertisers and they hear me say we went from 157,000 YouTube subscribers to write now 630,000. We went from 9.3 million views our first month in September 2018, to 30 million last month. And I say, "I haven't bought a single ad. I didn't boost a single thing. That's all driven by the audience. And that advertiser goes, "That's a loyal audience."
And so part of the people who are failing with this whole OTT strategy is they think, "Hey, it's gold in them hills. Let's just throw something up as OTT. They're going to come." No. You've still got to let people know you even exist. And so how do you now do that in a marketplace that--and there's no disrespect because you've got Disney, Netflix, Hulu, Peacock, Warner--I'm not gonna try to compete against them. It's just crazy. I'm going to say, "Here's my niche. Here's my space. I'm going to convert my existing following, build upon that, to then build something up."
So the next phase for me is I've already identified 25 African-American content providers who nobody's watching right now. And they've got some good content. How can I now pull them together under my umbrella to create, essentially, a network, a revenue share. And now--talking about Roku, talking about Pluto TV--I've also built up a library of content so I can create a 24-hour streaming channel beyond just the additional the individual shows. That's totally organic. So unless you've got the money to drop crazy money on marketing, you better build it organically. Otherwise you're going to be dead.
Tim Natividad: Even if you do have the opportunity or the money to blanket-advertise out there that doesn't guarantee you success. I do think, at the end of the day, viewership is a choice, and by building up your organic base, what you actually have is a following. He's done a really good job of capitalizing on that organic base. But if there's anything we've learned from Quibi, for example, it's that success isn't limited to those with megawatt budgets. In other words, you don't have to have deep pockets in order to make this work. Rather, success in streaming comes to those who lean into the right strategies based on their strengths. There's room for both the giants like Disney, as well as smaller players like Friendly, a virtual MVPD service with lifestyle content, or fuboTV another service with sports content.
What all of these services have in common is that they've opted to lean into a suite of offerings and flexible and maneuverable tools to grow and scale their audiences. Friendly, for example, a newer service that launched at the end of last year, has achieved their annual subscription goal in just seven months. And they did this by using performance marketing solutions to grow trialists. And for us, on our end, when we looked at the data, we found that nearly 80% of their trialists are coming from just three specific audience segments. So, just like other performance marketing strategies, if you can ride out that turbulent early stage of the test-and-learn phase, you can pull out the learnings and insights that drive a full-year strategy to grow an audience.
Roland Martin of Roland Martin Unfiltered, Roku's Tim Natividad, and PADEM Media Group's Allan McLennan discuss the shift in content viewing patterns ushered in by COVID-19 stay-at-home orders, and how it will inform OTT personalization going forward in this clip from Streaming Media West Connect.