FierceOV: How does your business model set you apart from other over-the-top broadband video providers and hardware companies?
Berman: Our foundation for success is that the model is very disruptive, though it's based on stuff that's been done before. The philosopher Santayana said something like those of us who haven't learned from history are doomed to repeat it. What I've learned from history around video content, especially television is that it is culturally acceptable to have advertising around it and the foundation of the business always has been around advertising. On a PC it is not, on the Internet it is not, and people are finally finding that out and admitting it.
Our strategy at Zillion TV is based on many of the premises that have worked in the past, things like targeted advertising and branded destinations. We bring you a personal destination where your favorite brands have been selected, we provide some free offers, and that piece of our business model is unique to us. We want to monetize and create win-win solutions with all of the stakeholders through revenue sharing.
FierceOV: Mitch, what are the biggest competitive and operational challenges ZillionTV faces?
Berman: We have a potpourri of options, clearly, some of my content partners are worried about cannibalization of existing revenue streams such as syndication, DVD sales, box sets not being sold anymore. They're attempting to hold on to their money-makers, while stepping into the future, and I know that if I hold their hand through the process, they will allow us to continue to offer great content in multiple formats.
I don't want to bomb them into submission like Boxee, I want to hold their hand and diplomatically transition to the new model.
The competition really is not Netflix, Roku, VUDU, Apple TV, my competition is to get the human being to switch from video 1 to video 2. If I have the content and a good experience and the business model works, ultimately the key component for the whole damn thing, is the consumer engagement that brings them back over and over again.
FierceOV: If those companies aren't your competition, then what sets ZillionTV's model apart so completely?
Berman: Those things are only parts of it, for instance, Netflix can do electronic sell-through and rental, but they don't do free, ad-supported content like we do. There is no subscription like with VUDU, Netflix, Apple TV, and other independent boxes you hook to a TV set. We allow the consumer to choose, whether they want to buy to own and store it in a ‘digital locker,' if they want to just stream it, or if they want AVDO - advertising video on demand. We actually do provide content for free, and no one has done this model (AVDO) before for TV. You can watch for free consumer, but you're going to get ads. There are two key parts to making this work. Have to have the consumer engagement, where they're empowered and get to choose the advertising. You also earn points based on the number of ads you view, which can be redeemed for offers and even free content. This model has been proven to be successful in other industries, like with frequent flier miles, and I think it will be a success for us too.