|Gene Hoffman - CEO, Vindicia|
|Profile of the week|
Monday, 11 January 2016 15:49
Recognized by the San Francisco Business Times with the “40 under 40 Emerging Leaders Award” in 2012, Gene has deep experience with building companies that disrupt markets.
Prior to Vindicia, Gene co-founded eMusic in January 1998 and served as President, Chief Executive Officer, and a Director. As head of eMusic, Gene was featured on the cover of Forbes Magazine as a member of the July 1999 E-Gang, and named one of the 100 most influential entrepreneurs in technology in Upside Magazine’s November 2000 Elite 100.
Gene led the acquisition of eMusic by Vivendi/Universal in June 2001.
How did you become the CEO of Vindicia?
I co-founded e-music.com and really learned how subscription was going to be the way that we all handled digital piracy and the sasification of everything.
Customers correctly feel like things should be cheaper when there are no physical boxes or trucks involved anymore and so Vindicia was very much taking the learnings I had at e-music and really starting to get us all the infrastructure necessary for content owners and software developers and information services to roll out and scale subscription services and also understand our subscribers.
One of the hardest things about subscription is that historically it’s been back-catalogue, things like record of the month, to put it in its historical perspective and so what does an NFL games subscriber metrics look like and why and how does that work, so it’s very much a business that we co-founded to create the opportunities for people who made premium content of all sorts to easily roll it out, scale it up from a business perspective.
Is the sports industry learning from the music business?
I think the music business was the canary in the coal mine for everyone and by being recalcitrant and not embracing consumer change, they cut the global music business in half.
The neat thing for the sport industry is that piracy is a different animal, today’s event really matters today and it falls off in value quickly, but at the same time the sports leagues around the world have been wise to follow their fan and their fan wants to consume sports in any manner they can, if they cant make it to the pitch, if they cant make it to the stadium, then they want to see iton their phone, on their ipad, on their tv, they don’t want to spend a lot of time figuring out how to do that, they want to think about inviting their friends over and pouring a pint.
What does Vindicia do specifically?
We manage the entire subscriber or video on demand customer life time. So from the moment that a debit or credit card or a direct debit payment is started to begin that subscription, we then manage the entire life time of that customer and then enable marketing operations so that you can do things like discounts and promos and bundling subscription services, all the more complex things that you have to do and the place where we really shine is around customer retention, we’re very good at keeping that subscriber into season three, season four, season five.
What are the sports and teams you work with?
We represent Chelsea Football Club in London, in the states we are NBA League Pass, NASCAR Track Pass, NFL Sunday Ticket online and also Telstra has various sports properties in Australia that work with us as well. It’s almost easier to tell you the leagues we don’t work with in some ways than the ones we do.
What are the sports you would like to work with in the future?
We’re certainly impressed with MLB in the United States, but the rest of the English Premier League is very interesting to us and I think they have a real opportunity because they have that worldwide fanbase to be able to drive significant traction and online ROI around both video on demand, subscriber services and more than just television, it’s a fan experience and it’s a lot more than just the TV stream to monetise and make personal.
Do you only work in the OTT market?
Our core strength is the OTT television market today, but we are broader than that, so we’re things like LifeLock in the United States, the BBC’s store in the UK and all sorts of information services, Motley Fool, Intuit in the past, Symantec, these are the kind of software and entertainment properties that we run the scaled back end infrastructures of.
What does OTT mean exactly?
I’d like to call it internet television, that’s an easier answer and it includes movies and sports so its hard term to define, but its really cutting the association with your cable modem or satellite dish to getting television content and moving to where it’s just a cable modem and you’re directly grabbing movies or sport or television content pretty broad to define, the definition of movie is undergoing an interesting change, for example is The Sopranos a movie, is it a mini-series, all of that is very different so Netflix style services around the globe is a great way to think about it.
Do you think sport will be doing more live streaming like the NFL did with Yahoo?
Absolutely, well in fact the NFL with Sunday ticket and direct TV, if you can find addition in the United States you can just subscribe directly so dorm rooms and condo buildings are just grabbing it and putting it on their Apple TV or the Rokue device and watching it like it was a normal stream from their device.
How do Vindicia’s partnerships with companies outside of the sports arena work?
A lot of these partnerships are about going to market. They are about working with the same customers and making sure we have deep access in the MasterCard, Visa, and American Express world so we are able to keep that customer still subscribed four or five seasons later.
Obviously the technology here matters so being able to tightly integrate and make that consumer experience of finding what you want to watch on TV then actually streaming it very easily.
Is buffering still a major issue in live streaming?
I think the problem of buffering or bad streaming experiences is absolutely a regional question. In Germany I was surprised to find when we did an international study how low the broadband penetration rate and wireless is not the easiest way to solve this, LTE is great but you still run into only so much radio spectrum out there.
When you start to go to places like the US you start to find the average broadband connection to the home is north of five megabits which is more than enough to get to 4k television.
Now you get to a place where memory and these devices have got cheap enough to do the right thing to buffer the content up and you have the connectivity.
In the States you have Google Fibre driving a local revolution in all of the Warners and ComCasts to head towards gigabit per second and at that point it only takes three megabits per second to stream a high quality HD stream.
Do you think that the subscription model will take over advertising?
I think that there is a mix and I also think that premium subscriptions will be like newspapers and that you may still have adverts in some premium subscriptions because the advertiser would rather pay for that subscriber who has money to spend.
I think that the content we are most going to care about, so sport and movies are going to be fundamentally monetised through subscription services. I think we will get to windowing where a lot of older content will be available through an ad model where we are watching interspersed or its part of another service you’re doing something else to get.
So I think there is going to be a broad set of these, certainly the YouTube era is still going to be there so there is no way that YouTube advertising is going to die but I think the types of content is segmented.
What happens in subscription is that you build these strong fan bases which generate amazing cash flow and these things lead to, like in the States, the band of brothers or the sopranos where its billions being handed to an artist to create something. This will create the virtuous circle which will drive in even more subscribers which drives up the budget on the next major thing you do.
What are your goals for the future?
We want to make sure we own a large proportion of the OTT transition. We think we are uniquely situated to help companies scale. It is kind of a weird thought that we are at internet scale so during football season in the US, direct TV would get a huge crush of new users two/three weeks before the football season.
Now they will get the influx two/three minutes before the kick off and so suddenly you are handling 100,000 users a minute trying to sign up and watch football.
This scale is critically important and we want to be there to make sure these services don’t have the issues you talked about like buffering or you can’t log in which is just a horrible customer experience.
For Vindicia that means high growth, we have been growing north of 50% year on year and were a relatively profitable organisation, but we immediately re-invest all of that so growing into the 50-100 million revenue range and head towards a public company is the goal for Vindicia in the next 5/10 years.
You can also watch this interview in full on iSportconnect TV HERE.