A New Discovery: Curiosity Stream

For many people, two of the most powerful words in the English language are “discovery” and “curiosity.” In fact, John Hendricks combined the two words to title his 2013 biography, “A Curious Discovery.” Now that he is no longer associated with the cable network that he founded—The Discovery Channel—Hendricks is launching a new venture, Curiosity Stream. Just as The Discovery Channel (now, simply “Discovery”) was precisely the right idea for a young cable television industry in 1985, Curiosity Stream sets the standard for special interest subscription ad-free video-on-demand in 2015. With HBO, CBS News and other new “SVOD” services available for an emerging marketplace.

03_F-N-NHK-TN_01_RobotsA monthly subscription fee buys access to a library of short- and long-form programs in four general categories: science, technology, civilization and the human spirit. Some programs are produced by Curiosity Studios—mostly, these are short-form interviews with scientists and other experts, often illustrated with animation. At the start, many of the long-form programs will come from TVO (that’s TVOntario, one of the best non-fiction producers in Canada), Japan’s NHK, France’s ZED, and of course, the BBC Worldwide. With two or three years, the service anticipates 2-3,000 titles; this year, subscribers will have access to about half that number of programs. Happily, John recognizes the challenges associated with VOD navigation, and I’m hoping to see Curiosity Stream reinvent the visual interface so that their programs are easy to find.

03_F-N-NHK-TN_04_MadagascarThe assortment of programs being assembled for the March 18, 2015 launch. Many are reminiscent of what The Discovery Channel used to be—before its prime time schedule began to resemble other cable channels (“Naked and Afraid,” etc.). Among the titles announced so far: “The Nano Revolution,” “Simon Schama: Shakespeare and Us,” “The Age of Robots,” “Destination Pluto,” and “Scotland: Rome’s Last Frontier.” There will be 4K programming, too—UltraHD for those who own the newer high-resolution TV sets—including a newly commissioned project called “Big Picture Earth” by the filmmaker responsible for “Sunrise Earth.”

For a look at Curiosity Stream’s demo site, click on the image above.

For a look at Curiosity Stream’s demo site, click on the image above.

Hendricks and his team are deeply experienced in the acquisition, production, and marketing of these types of programs—so this is a startup with a high likelihood of success. The intelligence of their marketing model impressed me, and made me wonder why others don’t approach the market in the same way. For $2.99 per 01_BBC_02_Earthmonth, you can watch in standard resolution—a terrific on-ramp for viewers who are either new to SVOD or are more likely to be fairly light users, at least the start. At this price, it’s almost a trial subscription with an easy upsell to 720 HD resolution at $3.99 per month (which is all that most people probably need right now). For those with more extravagant viewing habits, 1080 HD resolution costs $5.99 per month; the 4K Ultra HD service costs $9.99 per month (but at the start, there won’t be a lot of 4K programming available—still, some is far more than most other services offer today).

When I first read about the service—it was just announced—I reached out to John Hendricks and his team. Mostly, we talked about strategy. The program acquisition and production strategy is firmly rooted in international cable deals. The right deal spreads the risk among several programmers and distributors. For 04_ZED_02_Nanoexample, let’s assume that a high quality outdoor production costs about $750K to produce. If one company foots the bill, their programming budget only goes so far. But if Curiosity, for example, puts in $250K to control North American rights, and finds two partners, perhaps one in Asia and another in Europe, and each of them also puts in $250K for their respective territories, then nobody is out of pocket for more than $250K. Rights beyond North America, Europe and Asia provide additional revenue, which is typically shared by the funding producers. This “split exploitation” concept has been around since the 198os, and it works. In the SVOD marketplace, there will be many opportunities for future exploitation, which makes the venture progressively more profitable, and steadily increases the programming budgets, which generate more and better programming, and more subscribers… the circle continues to grow.

JohnHendricks_HeadshotUnlike Ted Turner, whose approach to cable was mass market (TBS, TNT, and very broad-based news with CNN), Hendricks has always focused on nonfiction, documentaries, outdoors and reality (in the best sense, and also with many programming ventures way down market—Discovery owns TLC, so you can thank him for “Honey Boo Boo”). The point: he knows how to play the game, understands how to segment the market. His first pass: a three-bucket breakdown that includes (a) historically light TV viewers, the 1 in 8 of us, the 17 million U.S. households for whom TV is not a big part of daily life; (b) the connected world of perhaps 100 million cable and satellite homes, the ones that often complain that “there’s nothing good on TV” where he hopes to capture about 10 million households; and the rising 4K market, which he projects at 10 million households total and perhaps 5 million subscribers to Curiosity. By playing a more upmarket game from the start—he’s betting that there are enough documentary, adventure, curious viewers willing to pay at least a few dollars per month to see what Curiosity offers and to support what would seem to be a very promising future.

03_F-N-NHK-TN_06_AngkorCould he be defeated by Netflix hiring a former Discovery executive assigned to buying up lots of rights to Curiosity / Discovery -type programming from the short list of global suppliers? Sure, but it’s not likely that Netflix will zero-in on the nonfiction programs that Curiosity Stream plans to acquire. The nuanced understanding of programming for, and marketing to, this particular audience is not something that Netflix can easily replicate. Hulu probably won’t go there, and neither will Amazon. YouTube is interested in other aspects of the business, so it’s likely that John and his team will be able to build the same kind of success that they enjoyed with Discovery.

In some respects, John Hendricks is a smart guy who found the right long-term niche. Broadening the view, I suppose it’s possible that TCM will offer a similar service—a movie archive with a greater emphasis on old movies than Netflix or Amazon may offer. The days of exploiting an old Hanna-Barbera library (one of the foundation blocks of Cartoon Network in its infancy) are over, but I suppose an SVOD animation service might be able to support itself. Old TV shows are currently experiencing a nostalgic burst with over-the-air channels exploiting old libraries—I now record “Naked City” and sometimes waste a half-hour watching “F-Troop” on MyTV, or similar programs on Antenna and its competitors. Not much SVOD opportunity there. Sports wants to be live—so after-the-fact viewing of sports events doesn’t provide much marketplace power for SSVOD (sports subscription VOD?). Weather, news – same problem; neither is good SVOD product. Children’s programming works, and I’m sure some combination of Disney, Nickelodeon, Cartoon Network and PBS Kids will fight it out in a battle for market share—a newcomer would find it difficult to acquire sufficient product in this brand-obssessed (“Dora the Explorer,” etc. marketplace), but the BBC’s CBeebies might move in that direction. History never found a large enough audience to sustain historical programming, so it became a popular mass appeal network. Food Network doesn’t focus enough recipe programs any more, and their competition series aren’t likely to generate large numbers of individual subscriptions. Clever marketing schemes aside, most other cable networks are mass appeal, or broad appeal, so they’re probably better as cable networks with some VOD than full-scale SVOD services. I think there’s some potential in BBC America—their airtime is focused on mass appeal but the BBC library—even discounting for rights limitations—is probably large enough to succeed in SVOD. Comedy Central has potential, but Curiosity Stream trumps comedy because it benefits from a higher degree of program scarcity (there’s no shortage of comedy product available). I certainly wouldn’t discount the potential of a music channel’s success on SVOD—perhaps from MTV, BET, or a country music source.

Which is to say: I think Curiosity Stream has chosen its niche wisely; packaged and priced its product slightly ahead of the market; that it benefits from the right visionary and management team; that is it among a short list of non-movie / non-sports programming franchises where 4K truly enhances the viewing experience; and that it promises some terrific viewing experiences now sorely missed. The idea of a truly global, any-platform, anywhere service in this programming space is extremely appealing. In short, I think Curiosity Stream is the right idea for a clearly defined audience that is probably underserved and ready to pay a reasonable monthly fee for the privilege of watching high quality non-fiction programming from around the world.

 

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Amazon: Any Thing, Any Where, Any Time

Amazon-HiddenEmpireFaberNovel is a website filled with interesting, well, I’m not sure what to call these packages of visual information. They’re kinda sorta PowerPoint presentations, but they feel more like a new kind of business book.

Originally, I was going to tell you that there’s a good (updated 2013) story of how Amazon is taking over the world. The presentation, above, tells a compelling tale about how the e-commerce giant has grown, offering considerable detail on the business side, and lots of insight about Amazon’s likely future.

As I went through the 84 slides, I became curious about who was telling the story, and became interested in FaberNovel, the publisher who offers this material under a Creative Commons license. As I browsed, I found an All About Google FaberNovel, too. And another about Google, Facebook, HTML5, the list is both impressive and multi-lingual (that is, presentations are available in multiple languages).

The stories are well-told, simply illustrated, and rely upon diagrams and other simple PowerPoint graphic techniques (nobody will be impressed by the visuals, but the stories are good; Edward Tufte’s magic wand would greatly benefit this material).

I’d start with the Amazon story because it contains so many “oh, that’s why!” or “that’s how, that’s a really good idea” or “what an awesome story of business strategy.” moments. Some of it is likely to be familiar, but it’s unlikely that most people have connected the dots. Sure, 84 pages may seem like a lot, but it’s not more than a half-hour of your life, unless you’re a serious student of e-commerce business.

Interesting discovery.

Posted in an independent bookstore

One of New Hampshire’s three Toadstool Bookshop outlets. They’re located in Peterborough, Keene, and Milford. If you’re in the neighborhood, be sure to visit the one in Keene, and then grab a beer and a burger (and gigantic onion rings) at Elm City Brewery, located in the same large ex-factory as NH’s best bookstore. With ebooks, there’s concern for the survival of even this fittest of independent booksellers.

“PLEASE THINK TWICE BEFORE YOU BUY A KINDLE

We are very grateful to all of those of you who have said you would like to support us by purchasing your e-books through us. This will become extremely important to us as more and more people begin using e-readers. We ask that you please bear in mind that only certain types of readers are compatible with our website. Fortunately, most of the common ones are. These include the iPad, Nook, Sony, and Kobo. However, the Kindle is not compatible.

Amazon has chosen to force Kindle users o make their e-book purchases only through their website.

Please think twice before getting one for yourself or for a gift. The future of independent bookstores such as our depends upon every sale, the physical book and the e-book. None will exist without the support of loyal book buyers such as yourself. Thank you so much for thinking about us, and be assured our love remains [for] the real book, there for your browsing in a real bookstore.

(Kindle Fire update: With Amazon’s new Kindle Fire tablet, it is possible to sideload an Android app that make it possible to purchase and read ebooks from the website of independent booksellers such as ours. But you do have to do this outside the Amazon App store. This will not work with the original Kindles. B&N’s new tablet Nook also requires a sideloaded app.”

Some other thoughts about Amazon and its relationship to independent booksellers:

Slate: Don’t Support Your Local Bookseller

Harvard Business Review: Amazon Should Partner with Independent Booksellers

Huffington Post / Poetry Foundation: Independent Booksellers: How to Compete with Amazon

and the most comprehensive and thoughtful view, written for The Nation: The Amazon Effect

Big Empty Boxes

Just in case you missed it, Slate published an interesting article about a new Amazon strategy that could turn the remaining big box stores into empty boxes. After a decade of placing warehouses in far-off places, Amazon is investing more than $1 billion in warehouses near large population centers, near New York City, Philadelphia, Washington DC, with up to ten warehouses in California, and more. With warehouses so close to large numbers of customers, Amazon will likely offer next day delivery for very low prices, and, perhaps most intriguing, delivery within just a few hours of online purchase. That’s the part that makes me wonder about the future of visiting, say, Staples or Best Buy, or, for that matter, my local supermarket. The term “complete domination of the retail industry” comes to mind.

Sure, it’s the natural evolution of business. The local hardware store is eliminated by Home Depot, and a few decades later, Home Depot is eliminated by an online service that requires no retail presence at all. Yes, it’s dismaying to see empty retail stores. And yes, it’s pretty cool to see the iPad that you ordered at 11AM in your mailbox at 4PM the same day. It’s consolidation. It’s progress. And along the way, we eliminate some local jobs, become cozier with a 24/7 consuming lifestyle, and lose just a bit of social interaction. I don’t know if any of this is good or bad or something else entirely, but I’m pretty sure we all ought to be discussing these ideas and what they mean. There’s something distinctly creepy about just having things happen to us, to lose little bits of our towns and our stores to a high-efficiency corporation reliant upon new forms of robots to do the pick-and-pack. In time, I suspect deliveries will be made not by men and women wearing UPS uniforms, but logistical robots who drive better, don’t get lost, and know what time you’re scheduled to be home so the delivery can be made “in person.”

Bye Bye Bookstore (Mea Culpa)


I love bookstores. Also, record stores, art supply stores, just about any kind of store where creative work defines the merchandise.

And, I’ve been fortunate because there are three good independent bookstores less than a half-hour from my home: one in the county seat, one in a town dominated by tourists, and one in a university town that’s also an easy drive (plus, several more that sell used books).

Unfortunately, this month, we’re losing the neighborhood bookstore that’s just five minutes from home. They didn’t make it. They cite e-books, internet bookstores, and the nearby Barnes & Noble (the nearby Borders closed a few years ago). The economics confuse me. Maybe you can make sense of it all.

My family buys a lot of books: probably 40 or 50 books each year. We buy more books, for personal use, than anybody we know. Assume 50 books at $20 per book, and that’s $1,000 in retail business per year. I would be proud to say that we’ve bought all of them from our local independent booksellers, but I can’t say that because it’s not the truth. It would be fair to say that we’ve bought about 1/4 of those books while traveling (we especially like Toadstool Bookshop in New Hampshire, for example), and half of them online because of the convenience, price, or quick delivery. The other 1/4, we probably buy locally.

One good example: a biography of the old superstar, Will Rogers, priced at $24.95 in paperback from a local bookstore, available for $16.47 from Amazon (with free shipping). We’re smart consumers–we saved $8.48 because we bought from Amazon. In a year, we make this decision maybe 20 times, so maybe we save $200 per year by buying this way. As I said, we’re smart consumers.

But we’re stupid citizens. Our extra $200 per year matters to a local bookseller. If 100 customers paid the higher price instead of saving the money, that’s an additional $20,000 per year for the local bookseller. If 1,000 customers, the additional revenue nears a quarter-million dollars.

So here we are, all of us, the book lovers and the book consumers, happily saving money by shopping late at night and taking advantage of super saver shipping and the deep inventory that online booksellers provide… all the while forgetting about our neighbor, the small business person, who is spending every late night trying to figure out how to keep the local bookstore’s doors open.

When I think about this, I feel stupid. As I said, I really like bookstores, but just this morning, I ordered two books from Amazon, and I saved $7.33 on one of them and $15.78 on the other. This afternoon, I thought about visiting my local bookstore, the one that has been five minutes away from my house for the past few years.

It was closed.

I feel foolish. Why didn’t I do more to keep a community institution in place?

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