FilmOn CEO: 'VOD is a disaster'

30th Jun 2009 | 11:07

FilmOn CEO: 'VOD is a disaster'

Alki David talks FilmOn, mobile and being told off by Sky

FilmOn, the movie and TV on demand service recently announced it has gained £43 million in funding to develop its hi-def online film service and mobile app.

Although it is still in beta, the service has gained huge popularity due to its free access to live BBC content and thousands of films available on pay-per-view.

The company's Chairman Alki David sat down with TechRadar recently to discuss how the service came about, how it is succeeding in a saturated online market and what its plans for the future are.

TechRadar: So, how did it all start?

Alki David: We started beta testing Film on HDI at the end of January. We have done zero marketing and zero promotion, other than a couple of news stories in the UK.

The initial start was 205 beta users. Since then, it's being growing incrementally – we had 664,000 users just yesterday.

Somewhere along the line we had a surge. I put Sky Sports illegally on to the site for about a week. Our figures almost doubled overnight and the response from forums was phenomenal. We took it off a week later, and it obviously dropped down but figures since then have been on the rise, and that is totally organic.

TR:How did Sky feel about this?

AD: We got slapped on the wrists by them. There's a funny story about that. I was introduced to Terry Blake, the former head of marketing at the ICC and we now have him on staff making deals with all the major sports – the premiership and PGA etc. So, we are looking to provide branded channels for all of them. This is the way our business model works. We have a patent on certain functions of our players.

TR: What are the most popular channels?

AD: The most popular channels on the website are by far the adult ones. We have worldwide rights for the entire Playboy catalogue, non-exclusive rights.

TR: Is video-on-demand the way to go?

This business started as a VOD business. You downloaded a widget, you see it, you like it, you play the trailer.

We heavily advertised this arm of the business around two and a half years ago and the site crashed because of the amount of traffic we were getting. We were inundated. But as a model, it was a f**king disaster. VOD is a disaster.

TR: What tactics are you using now?

AD: The tactic originally was to create white labels for content partners. We did this for Granada, for example. All they had to do was deliver us the films and we would encode and do all the rest. But this wasn't working.

It works in the sense that we now have 120 content partners and over 142,000 titles available, making us the single largest VOD provider anywhere on the internet. But the business model wasn't right.

So we have come up with branded white labels. Now we have things like the My Space white label and the Coca-Cola white label – all of this branded with the FilmOn logo. That was great people loved it, but it still wasn't doing it.

TR:So, what was the next step?

AD: We started the live streaming feeds in January, and we are still in beta at the moment. We are in the process of closing a number of major deals at the moment. There are all sorts of people interested from telcos, to major publishers to television broadcasters.

Once we have signed up the UK we will be doing the exact same thing with US providers. The ones that are in development right now are Tesco and BT Vision. Our model is both subscription and advertising. Because of this we have two types of player – a core player, and one that has the adult content.

We have our own EPG at the moment, but the next phase of the EPG will have rewind, pause, play and record. A proper Sky-type service.

TR: What happens when you come out of beta?

AD: For all the channels it will be subscription-based: £5.95 with everything, and £3.95 a month without the adult content.

As we have been in beta, we have done everything for free, but when we go live we will go subscription. There will be a number of channels for free, however.

TR: How will you get current users to change?

AD: They will be forced to update their players and told they will have to pay. This will happen in a couple of weeks. Traffic-wise, we should get a 5 to 10 per cent uptake. Which is good for us.

TR: What are the legalities of having the BBC and other channels in your package?

AD: There's a new law coming out in December which allows all broadcasters to broadcast their shows online over IP. At the moment it is just allowed through terrestrial and cable.

That would mean for us that we would be completely legal. We are legal now because we are not monetising from it, as we are in beta. But it is an open beta so anyone can join.

With the BBC, we are not going to monetise from their content until the legislation changes. Channel 4 is very interested in what we are doing.

TR: Would you say you are a unique proposition?

AD: Absolutely, we generate our own content and you can watch the latest studio releases on a pay-per-view basis on the stie. We are doing deals with EMI to do live music streaming – we are the real deal, as we have the resources, the patents and history in the internet game.

Our market capital at the moment is 651 million Euros. By 2011 I expect us to be a $2 billion company.

TR: How does the advertising work on your site – are you using targeted adverts?

AD: Yes, we are targeting our adverts. There's a lot of negative notions of targeted advertising, but it's a big PR stunt. Everyone knows this.

It's inevitable. You are not going to stop it, there is too much at stake for it not to happen – it has happened.

So, despite what anybody thinks, this isn't Big Brother this is just efficient advertising. If you don't like it, f**k off and do something else.

TR: What about the mobile phone release?

AD: It's fantastic, we are making it as easy as possible for the user – we are not using 3G bandwidth, we are using 2G bandwidth. It'll run between 80 and 100Kb/s.

It works exactly the same as it works on the internet – what you see on the site is what you get. It will be ready for the iPhone but we are working specifically with the Symbian platform.

TR: The Digital Britain report has called for 2Mb/s broadband for all by 2012, do you think this is a good thing?

AD: Personally, in comparison with what is happening in Europe that is pitiful. However, compression techniques are improving constantly so it might not be such a bad thing.

Out technology means you can get HD content streamed within the 2Mb/s range, so it's not such a bad thing for us.

To learn more about FilmOn, go to www.filmon.com.

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