FilmOn, the movie and TV on demand service recently announced it has gained £43 million in funding to develop its hi-def online film service and mobile app.
Although it is still in beta, the service has gained huge popularity due to its free access to live BBC content and thousands of films available on pay-per-view.
The company's Chairman Alki David sat down with TechRadar recently to discuss how the service came about, how it is succeeding in a saturated online market and what its plans for the future are.
TechRadar: So, how did it all start?
Alki David: We started beta testing Film on HDI at the end of January. We have done zero marketing and zero promotion, other than a couple of news stories in the UK.
The initial start was 205 beta users. Since then, it's being growing incrementally – we had 664,000 users just yesterday.
Somewhere along the line we had a surge. I put Sky Sports illegally on to the site for about a week. Our figures almost doubled overnight and the response from forums was phenomenal. We took it off a week later, and it obviously dropped down but figures since then have been on the rise, and that is totally organic.
TR: How did Sky feel about this?
AD: We got slapped on the wrists by them. There's a funny story about that. I was introduced to Terry Blake, the former head of marketing at the ICC and we now have him on staff making deals with all the major sports – the premiership and PGA etc. So, we are looking to provide branded channels for all of them. This is the way our business model works. We have a patent on certain functions of our players.
TR: What are the most popular channels?
AD: The most popular channels on the website are by far the adult ones. We have worldwide rights for the entire Playboy catalogue, non-exclusive rights.
TR: Is video-on-demand the way to go?
This business started as a VOD business. You downloaded a widget, you see it, you like it, you play the trailer.
We heavily advertised this arm of the business around two and a half years ago and the site crashed because of the amount of traffic we were getting. We were inundated. But as a model, it was a f**king disaster. VOD is a disaster.
TR: What tactics are you using now?
AD: The tactic originally was to create white labels for content partners. We did this for Granada, for example. All they had to do was deliver us the films and we would encode and do all the rest. But this wasn't working.
It works in the sense that we now have 120 content partners and over 142,000 titles available, making us the single largest VOD provider anywhere on the internet. But the business model wasn't right.
So we have come up with branded white labels. Now we have things like the My Space white label and the Coca-Cola white label – all of this branded with the FilmOn logo. That was great people loved it, but it still wasn't doing it.
TR: So, what was the next step?
AD: We started the live streaming feeds in January, and we are still in beta at the moment. We are in the process of closing a number of major deals at the moment. There are all sorts of people interested from telcos, to major publishers to television broadcasters.
Once we have signed up the UK we will be doing the exact same thing with US providers. The ones that are in development right now are Tesco and BT Vision. Our model is both subscription and advertising. Because of this we have two types of player – a core player, and one that has the adult content.