with John Hendricks, Founder & Chairman, Curiosity Project
Hendricks (Source: Curiosity Project)
It's been a long, strange trip for video on demand over the past few years, but thanks to over-the-top streaming, the concept of VOD is finally coming into its own. One person who's excited about the potential of OTT is John Hendricks, founder of the Discovery Channel and until last year the chairman of Discovery Communications. In 2014, Hendricks signed off of Discovery to found a new venture, Curiosity Project, and its progeny, CuriosityStream--a pure-play OTT service that provides subscription VOD content similar to that of Discovery, History and other linear channels in the nonfiction/factual television category.
Hendricks spoke with Samantha Bookman, editor of FierceOnlineVideo, about the soon-to-be-launched SVOD service, the content niche it fills, and the parallels he sees between the cable revolution of the mid-1970s and today's online-video disruption.
FierceOnlineVideo: CuriosityStream will launch on March 18 as a $2.99 monthly service, with several licensed programs, such as Age of Robots and The Twilight of Civilizations, and at least one original series. Do you have plans for additional original content?
John Hendricks: Absolutely. We will follow the successful way of building an SVOD service, where you try to capture the best licensed product that you can to build up a nice library of choices for the consumer. That's what certainly Amazon, Hulu and Netflix have done.
It [original content] can really distinguish your product. There have to be things that only are available on your SVOD service. So that's behind Netflix investing significant dollars in its original content productions like House of Cards. And certainly that's our intention as well.
FierceOnlineVideo: How much of your lineup will be originals as opposed to licensed content?
Hendricks: Over time, I suspect our original productions might make up 30 to 40 percent of our venue in two to three years. We'll start off with probably about five percent.
We have three originals that we're developing, one of which we've just commissioned. That's Big Picture Earth [in 4K]. We have a producer lined up for that; we will own the worldwide rights. So that should be something of value to all of those people who buy 4K television sets this year or next, and we expect that by the end of 2016 there will be 10 million households with 4K TV sets and we hope to have a pretty good penetration within those households.
Then we have two others that are in development; we're still working on the production partnerships for those. One is called Deep Time History, an eight- to ten-part series that will really explore history in depth. Going beyond just the written word, back into archaeology, back into geology. It's really understanding the British Isles, for example. Not only their history over the last two thousand years, which has been largely recorded, but going back into deep time. That's something I'm really looking forward to developing.
Then finally I've always thought there needs to be a great television series, in eight parts, that really tells the story of the computer revolution, from its very beginnings through the Internet, to speculation on the future of artificial intelligence and virtual reality. The working title is Digits.
We expect that we'll have other concepts as well. We will probably have five in development by the time we launch.
FierceOnlineVideo: Why did you decide to start CuriosityStream and go with the SVOD model instead of founding another TV channel?
Hendricks: I've been thinking about this for a long time. A lot of people said, when did you come up with this idea? Thinking that I would say, 'within the last few months or the last year.' But this is something that has really been incubating in my mind since 1993 to 1994.
I was chatting with Howard Stringer last summer about our experiment that we did in television about 20 years ago that we called Your Choice TV. I organized a research project where we were able, quite amazingly, to take over within cable systems that served 20,000 cable subscribers back in the 1993-94 era. These cable systems were overbuilt with coaxial cable, so each of them had a coaxial cable that was not being used that could carry 54 channels.
We created a menu of 54 shows, ranging from everything from Seinfeld to Discovery specials, to CBS' 60 Minutes, to Saturday Night Live. Each of them had their own channel, and they would run, like 60 Minutes would go on the channel for three days following the Sunday broadcast.
The response by these 20,000 homes was just spectacular. They would order Seinfeld for $1 and watch it. They could just wait until the top of the hour and just watch it. It was what we called near-video on demand.
At the end of the test, rather than charging people $1 per episode, we posed a question: Would you be interested in a monthly subscription to Your Choice TV for about $8? And again the response was overwhelming.
FierceOnlineVideo: Why didn't the near-VOD concept take off back then?
Hendricks: The challenge was the rights situation, and especially all the legacy entanglements of the broadcasting services. The affiliates really protested, even the networks participating in the test, because as you can imagine the local New York affiliate of CBS or the local Washington affiliate of ABC didn't want there to be any other way to get that content other than through broadcast transmission.
For 20 years television on demand has kind of been possible, first through near-video on demand and now through true video on demand, through SVOD venues. It's just been over the last three or four years with the development of over-the-top infrastructure that Netflix has pioneered that has allowed us to now start constructing the subscription video on demand windows.
FierceOnlineVideo: Do you think broadcasters like CBS will successfully move into the OTT space?
Hendricks: It's very difficult to have one foot in a previous evolution of television, to participate fully in a new platform. For example, it was very difficult for CBS back in the '80s to contemplate starting a channel on cable. They actually did start a cultural channel, and then it folded.
It's the same way, I think, with folks that are working in the cable world. It's difficult to develop a service fully in the SVOD world without thinking about of all these concerns with your legacy business. Will you cannibalize viewers? Will you upset your cable distributors who helped pay for the content that you're airing anyway?
For me, it reached the point where last year I felt like I was so excited about the SVOD platform that I wanted to take early retirement from Discovery, set up a new independent venture that I'd been planning for years, and set off and really exploit this without any legacy entanglements within broadcast and cable television.
FierceOnlineVideo: This is a very interesting period to enter the online video market segment. Do you see competitors coming in that would challenge your content niche?
Hendricks: What we've learned, and what HBO recently learned, is this is a challenging thing to build, a reliable SVOD platform. …We've been working on this for over a year and so we're doing it in partnership with existing companies that already have hundreds of engineers. Limelight will be our partner in hosting our platform and streaming it.
It's just not affordable to do it for niche services right now. The way I think of it is what happened back in 1975, when HBO pioneered cable television and the infrastructure to deliver cable television via satellite. …And then the huge entrepreneurial opportunities were to create, like HBO did, a dependable platform for delivering an entire category of content. HBO did it for movies; ESPN did it for sports; Ted Turner did it for news; and I had the great fortune to be the first to do it in the nonfiction/factual category.
Then over time there are subniches that can arise. Like within sports there's a Golf Channel, a Tennis Channel, those are subniches. They don't have the potential or the scale that the whole category player does.
I'm looking at [OTT] as a repeat of cable development. [For example], one big category was just a repeat of hit TV shows. So USA Network sprung up in the late '70s, and also WTBS, and basically they aired syndicated product from the broadcast channels. Well, that's Hulu. So you have Netflix playing the role of HBO in the cable revolution, and you have Hulu playing the role that WTBS and USA Network played. So what we're looking at is that whole big area of factual that Discovery exploited in the linear world. CuriosityStream is my attempt to deliver on that content promise in the big world of SVOD.
It's a fascinating time. We're just so excited about it. A lot of risk involved, but we know if you get there first in a category of content and do it well, and gather up not only some of the world's great pre-existing content but go into production on new original content that only your platform delivers, we think that's a winning proposition over the long term.
FierceOnlineVideo: How much of a role will audience measurement and analytics play on CuriosityStream? Will you customize content to audience feedback and analytics data?
Hendricks: We expect that we're going to be examining our usage. In the world of SVOD, it's not estimated numbers like you get from Nielsen, it's actual numbers. How many people actually watch a particular title. That will give us some guidance--if there's a real popularity to current events, if there's a real popularity to certain topics like computers or the Internet, or certain people wanting to know more about a country like China or India.
I was a history major, but I realized that I should have really studied more than just American or European history. I should have studied Indian history, I should have studied Chinese history. So none of us are going to go back to school to do that, and so that's what we see CuriosityStream as: a great way that we can further our formal education. Part of that will be the analytics. We'll be looking at not only people's programming preferences, but how many people are streaming us in HD, how many are streaming in 4K. There are different expenses involved in delivering standard definition vs. high definition vs. 4K, those are going to be interesting dynamics that we're going to study as well.