The following is a selection from our latest report, “TV in the FAST Lane.“
Raffi Bagdasarian is founder and CEO of Paket Media, which is building a product designed to simplify what’s emerging as a significant headache for millions of streaming-video consumers, and for the streaming services they buy into.
The headache: dealing with managing multiple subscriptions from numerous media companies, especially as we shift away from traditional pay TV bundles. The complications of managing all those subscriptions are made worse because none of the big new services want to rely on a competitor such as Roku or Amazon to do it for them. Just look at what happened when HBO Max debuted without being part of either of those giant streaming platforms.
Paket wants to make streaming video subscriptions a lot less annoying for consumers, while helping streaming services find and retain previously inaccessible audiences. Paket allows the kind of one-stop process of subscribing and signing in that now is only possible if you buy your services exclusively through the channel stores like Roku and Amazon.
It’s an approach that’s way overdue for consumers. As Lightshed Partners analyst Rich Greenfield recently tweeted, even Disney inexplicably requires different log-ins for its three streaming services, Disney+, Hulu and ESPN+: “So counterproductive in terms of TAM, churn, marketing spend, etc.”
It only gets worse when consumers venture out among the hundreds of other streaming services out there. We talked with Bagdasarian about how Paket –a startup planning to launch within a few months –hopes to fix the essential headache facing us in the shift to an online streaming future.
TV[R]EV: Let’s start with some quick background about you, Raffi, and how you ended up trying to fix the streaming-video world.
Raffi Bagdasarian: I came out here by way of New York, working in production in film and television. In 2004, I started working in digital media as a creative producer doing original content at (what was then) the Walt Disney Internet Group. I oversaw a team producing shorts using Disney classic characters for the Japanese and the Korean markets. We were making five-minute shorts that we were chopping up into 30-second bits to go out to mobile devices on NTT DoCoMo, so we were actually in the content business, streaming video, before it was even a thing here in the United States.
Since then, I worked for a number of media companies, primarily in the mobile space. I worked at Universal Music as one of the founding staff members of their mobile division, during the time of insane revenues for ring tones, so you’d sell ringtones for $1 99 for a piece of music that you can buy for 99 cents on iTunes. They really still hadn’t found out a long-term business model, and I’d like to think that our division built a lot of the tools on which that business started to take off. Then I went back to Sony Pictures Television, right after they acquired a company called Grouper. They rebranded it as Crackle. My team started to incorporate it into our digital networks group and convert it f to an ad supported streaming video service using premium media mainly from Sony Pictures film and television library.
TVR: So you’ve been getting video and other content to people in lots of innovative ways for years. It seems to have turned you into an advocate for users.
RB: I remember asking a distribution executive, “How long before Showtime and HBO go direct-to-consumer?” His response was “Never, because there’s so much money in the output deals with the studios and the pay TV providers.” I was thinking (it would happen within) two to five years and it happened within a year and a half with HBO NOW. I don’t think that it’s that I have any magical crystal ball. Being so much in the headspace of the consumers forces you to think of it from the consumers perspective, because ultimately, you have to meet the needs of the consumer. It’s a different mindset. And now they don’t have a choice.
TVR: So how has that experience shaped what you’re doing with Paket?
RB: Sometimes a lack of resources is your best asset, because it forces you to think really strategically. You have to make a product that’s going to resonate with users. And in the case of Paket, it has to not only resonate with users, but also with the service providers who are the other side of our customer base. We’re servicing those as customers as well as our end users.
Paket is really designed to help consumers make sense of an increasingly confusing media landscape specifically around subscription video-on-demand services, as well as AVOD services. We’re offering a unified authentication, billing and discovery platform for consumers to basically have a portable plan that they can take anywhere. And what I mean by that is the current state of affairs in streaming media is you have a lot of media companies that are buying up smaller media companies, essentially creating their own bundles of service providers that they then are going to go sell for a discount. But you’re still within that media company’s portfolio of products.
TVR: So why are they going to third-party services to manage what they’re watching?
RB: Because there is no solution to manage for them to say, Okay, I want to watch this movie, where do I go to find out where it’s playing? That’s fine if you have an Apple TV, or if you’re locked into Apple’s ecosystem, or if you’re locked into Amazon’s ecosystem. But that brings me to the problem for the streaming service providers. If you’re a streaming service provider you’re going to see so many new services launching with a lot of money, a lot of marketing, and they’re going to all have some kind of incentive to get you locked into their ecosystem. So if you think consumers are confused now, just you wait.
TVR: But you’re trying to fix that problem for consumers while still fixing it for all the indie streaming services. How does that work?
RB: How do you compete with Amazon’s content budget? Not only are you paying them to run your services in AWS, they’re taking a piece of your (subscription) revenue when you distribute in their environment.
The founding ethos of Paket is why not create a platform that is fully independent, has all the benefits, but that isn’t taking the revenue from streaming providers that are competing with them. It’s almost like giving a platform as a service to the streaming providers to have the platform efficiency of an Apple or an Amazon. But we’re making the platform independent, it’s not tied to any kind of incentives.
TVR: So what’s next in the streaming-video ecosystem?
RB: Over the course of the next year, we’re going to see a great leveling off on two fronts. One is going to be major service providers. They’re going to launch strong and they’re going to see their subscriber base go up tens of millions, but eventually they’re going to plateau.
And then the question is, ‘Where do we go from here?” They’re gonna have to ask themselves, “What is your content worth? Is your content just a value-add marketing cost?”
Apple is selling TV+ for $4.99 a month, HBO is selling HBO NOW at $15 a month. So there’s a huge delta there. Certain services may find they’re overpriced, and they’re going to have to move down. Apple might someday get sick of commoditizing their content, just giving it away, and they might raise it a dollar or two, so I think they’re going to bundle it (with other Apple services such as iCloud, News+ and Apple Music). The bundle hides the actual costs. We’re realistic about the reach that Paket Media could have in the near term and midterm. Long term, it’s anybody’s game.