Xumo has a two-pronged business model. It has its direct-to-consumer streaming service that has attracted a sizable audience. It also has an enterprise business where it builds experiences for LG, Hisense, T-Mobile and Roku, and then manages those services on behalf of those companies.
Xumo CEO Colin Petrie-Norris said his company’s strategy has placed it at the center of the ad-supported video streaming space.
“What we’re seeing is a three-way convergence of interest in free ad-supported streaming television,” Petrie-Norris said. His company is seeing interest from device manufacturers looking to embed experiences that offer linear TV over IP, content partners that are accelerating plans to reach consumers who are unavailable through traditional means and advertisers that looking for big screen TV marketing combined with data and targeting at scale.
“Xumo sits at the intersection of these forces,” he said. “It’s a good place to be.”
Petrie-Norris also said that the consumer is the key at the center of all this interest and that consumers are increasingly discovering the appeal of free content in a world of subscription services. Better serving consumers was at the heart of a recent conversation FierceVideo had with Petrie-Norris about user growth, tech stacks and Xumo’s magic Elixir.
The following transcript has been edited for clarity and length.
FierceVideo: In April, Xumo said it had 5.5 million active users. Is it safe to assume that the user base has grown since then?
Colin Petrie-Norris: We are going to put out some new stats in a little while that are going to illustrate the impact which we achieve through our platform. I would say that number is now out of date. I can’t at this point share an update. We’re working through a new story that is going to show a significant change to that number.
The reach in terms of households, particularly since the inclusion of our T-Mobile partnership…are you familiar with that?
FierceVideo: The snackable video service, correct?
Petrie-Norris: Correct. That is running out aggressively through our partnership with Metro and that has been an enormous impact on our overall numbers. That has been a quick growth area for us.
FierceVideo: How big of a growth driver is the enterprise business for Xumo? Is it equal to the direct-to-consumer business?
Petrie-Norris: We’ve been doing that longer and it’s been a bigger part of our business historically. The growth is similar in our direct-to-consumer and enterprise businesses on a year-over-year basis. I think we quoted stats in Q1 or early Q2 of 300% growth and that is still tracking. That trajectory is still there.
It’s a wonderful stat to quote, new users growing and engagement growing, but there’s also an enormous amount of engineering effort that goes into it. Because you have to anticipate enormous volumes and demand from the service.
We’re constantly having to reinvent, redesign, upgrade and improve our systems to keep pace with where we think the business is going to go. It’s not just about what happens on the outside, quoting the stats, but we’re very proud of our server, our infrastructure, our proprietary system that we built for video delivery, which I think is one of the best in the world.
Something I want to talk about is Xumo Elixir. We have a proprietary engine which does a number of very clever functions in a highly automated way. Elixir is the way we can create our 180 channels of programming with only five people on our operations team. We can dynamically adjust what people are watching in real-time. We can adjust the ad loads based on the yield and full rates of those ads and the types of content being consumed. We can run what amounts to a cable TV-like experience with a very small team. We’re less than 50 employees at Xumo. We’re starting to help other companies manage their experiences with Elixir as a standalone enterprise offering.
[Elixir] is an algorithmic, highly automated, smart system that can adapt in real-time to bring together business rules on the content delivery side together with yield management. And nobody has anything like this in the industry. So, you talk about what drives our growth, I want to give a lot of credit to Elixir.
FierceVideo: Are your partners using Elixir seeking it out to reduce cost or streamline workflows? What’s the draw for them?
Petrie-Norris: Essentially what we’re doing for the Roku Channel is making use of Elixir to curate channels on their behalf. It allows us to dynamically manage and optimize from a library of content what goes into a stream. The programmatic ad space is all about optimizing the yield in the moment. You make as much money as you can on every single ad impression and that is what programmatic ad success looks like. That looks great when you have pre-roll. But when you have a linear experience, when you want that person not just to enjoy something in the moment but have a good experience and come back the next day, and the next week, and the next month, then you’re making decisions differently to maximize not just the experience in the moment but the experience over time.
That ability is what makes us unique. We actually may take a less high-performing ad to make sure the diversity of ads is higher so as to maximize the benefit over time.