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Ellation Will Ride SVOD’s Next Wave

Niche-focused ‘VRV’ will be OTT hub for Crunchyroll, Seeso, plus exclusive fare 6/20/2016 8:00 AM Eastern

Netflix, Amazon and Hulu have taken the subscription video-on-demand world by storm with broadly focused over-the-top offerings that appeal to the masses.

 

The next phase of OTT and SVOD will center on more targeted, niche services that serve so-called “superfans.” This is the angle being taken by VRV, a multichannel video-distribution platform from Ellation that will launch later this year with content tailored for geeks, gamers and lovers of comedy, fantasy and technology.

 

Ellation, a portfolio company of Otter Media (the OTT-focused joint venture of AT&T and The Chernin Group), said it has already signed on several “channels,” including Crunchyroll, Rooster Teeth, Nerdist Alpha and NBCUniversal’s new comedy- centric SVOD service, Seeso. Frederator Networks is also on board to offer an exclusive premium version of Cartoon Hangover.

 

VRV plans to announce additional premium channels in the coming months. It will initially distribute its SVOD platform to U.S. audiences.

 

VRV is not an “open” platform, but a curated one. It will work with specific partners that fit the targeted audience segment and that are also interested in building premium subscription channels, said Ellation CEO Tom Pickett, a former YouTube and Google executive.

 

NICHE APPEAL

 

“We know who we’re going after and we know who we’re not going after,” he said.

 

While Netflix, Amazon and Hulu have achieved scale with a broad focus, Pickett said there’s a distinct need for a platform that can curate and offer services tailored for VRV’s focus.

 

Crunchyroll, an SVOD service with more than 750,000 subscribers that’s majority owned by Otter Media, was “at the core of why we decided to execute this strategy,” Pickett said. Crunchyroll’s main focus is anime, but the service also identifies with gamers, science-fiction fans and technology aficionados — the kind of audience that VRV will focus on.

 

“Crunchyroll really taught us that it’s about content-plus-community, and we are really coming after it from that perspective with VRV,” Pickett said.

 

VRV’s content partners also tend to have a strong social-media presence, so the platform will also try to promote itself through those channels.

 

Pickett said VRV would also seek out SVOD deals that give VRV some exclusivity before they make their way to YouTube or other ad-supported platforms.

 

VRV will make all supported SVOD services available on an a la carte basis, but the service will also offer a “core bundle of channels for a single price,” Pickett said. The bundled package will provide those channels at a discount, he added.

 

VRV will sort out the makeup of its core bundle this summer and announce more details closer to launch, he said.

 

The VRV platform will also offer some free, ad-supported content, in the hopes that viewers who get a taste of the service will want to unlock its full menu of subscription channels.

 

VRV is a tangential competitor to Amazon’s Streaming Partners Program, which features a curated mix of SVOD services along with all the back-end support for elements such as billing, streaming infrastructure and device compatibility management. But Pickett said he believes VRV is taking a unique approach that will help to set it apart in what’s becoming a crowded market.

 

“I think there’s also room for great audience- focused services that attack the problem in a different way that starts to bring a community together and create a more social experience and start to move beyond the video,” Pickett said. “We want to create an experience that is more social, where you feel you are there among friends.”

 

Vessel, a YouTube competitor founded by former Hulu CEO Jason Kilar, uses exclusive content windows for some of its content partners, but Pickett said VRV is different because of the subscription angle, its content focus, and its use of anchor properties such as Crunchyroll. “We’re going after a specific audience and not [trying to] be something for everyone,” he said.

 

DEVICE PARTNERS COMING

 

VRV, through a partnership with Microsoft, will be available on the Xbox One at launch, and expects to announce other device partners soon.

 

“We want to be across all of the platforms that matter for this audience,” Pickett said.

 

While OTT services such as Netflix and Hulu have been forging deals that get their SVOD services integrated on set-top boxes, that’s not part of Ellation’s strategy with VRV, at least not yet.

 

Set-top integration “is not the priority,” Pickett said. “If you look at our audience segment, I would say they are much heavier cord-cutters, so going the other direction is not the primary vector for us.”

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