One way to think about the entertainment industry is as a massive war for attention. Within that war rumbles the battle for at-home video dominance (often itself called a streaming war, which feels a bit like calling the Pacific theater of World War II the Pacific War).
At that battlefront, giants like Netflix and Disney spend boggling amounts of money and rack up mind-numbing debts. On the periphery, several smaller battalions like Tubi and Vudu wield their ad-funded service weapons. And scattered about it all, minor militias scurry in search of a patch to claim their own.
Orby TV thinks it's found one -- starting at about $40 a month compared to more high-priced competitors.
"We're looking at what we feel is an underserved segment," said Michael Thornton, Orby TV founder and chief executive. Previously chief revenue officer of Starz after stints at Disney and DirecTV, Thornton launched Orby TV in early 2019 out of Studio City for "people that are fed up with high prices and want a lean-back experience" where you "hit power, and then it's on."
For an installation fee and a monthly payment of less than half of what most cable or satellite services charge, Orby TV customers get dozens of cable channels via satellite dish, plus dozens more over-the-air (OTA) broadcast channels via digital antenna, all beamed through one coaxial cable into a TV that turns on with the click of a remote, complete with a program guide.
Orby TV's program guide integrates its broadcast and satellite channels
TV for a Toll
One reason Orby TV is relatively affordable is that it doesn't carry sports channels. Foregoing national and regional sports networks means saving on licensing costs, which the company can pass on to customers. Sports coverage from broadcast networks (ABC, CBS, NBC, Fox) and Turner stations (TNT, TBS) remains available.
Orby TV also eschews channels that can only be had as parts of a bundle, many of which are owned and operated by the networks. Those bundles tend to be an all-or-nothing proposition.
"The industry has been and always will be very paranoid in terms of how it sets itself up," Thornton told dot.LA. "They have most favored nations clauses out the ying-yang (so there's) very little ability to cherry pick services."
The upshot is that Orby TV viewers can lean back and watch Fox (via broadcast), but not its cable channels like Fox News or Fox Sports; NBC, but not Bravo, MSNBC or Telemundo; ABC, but not ESPN, Disney Channel, or National Geographic.
Nevertheless, with a stable that still includes TNT, A&E, CNN, AMC and others, Orby TV's basic package includes 46 satellite cable channels, per its website, with upgrades available for an additional charge.
The digital antenna, meanwhile, picks up not just the major network broadcasts but also the OTA "digital subchannels" that flow alongside these transmissions in the government regulated broadcast spectrum. (Think stations like ABC-2, ABC-3, NBC-7, etc.) Reception quantity varies by location but the company noted that 150 OTA channels are available in Hermosa Beach, and 88 just outside of Denver. These all fit on the broadcast spectrum thanks to decades of digital compression advances, noted an Orby TV representative.
Throw in the technological infrastructure afforded by the cloud, remote communication tools, and data management systems, and Orby TV's innovation is simply taking advantage of a set of "tried and true" technologies and combining it with a prepaid business model to enable a simple, flexible, low-cost service.
Customers can cancel their monthly subscription anytime and return at leisure, and meanwhile keep the broadcast channels coming in from the antenna – which remain on the program guide. Add it all up, and media analyst Dan Rayburn calls Orby TV a "niche service that works well for what it does." Affordability and flexibility, notes Thornton, could be "particularly relevant right now given what people are going through" with the coronavirus crisis.
Who's it for?
Thornton cited the growing pool of the Pay TV-world's net losses–six million in the past year–as a potential source of subscribers, who could be looking for cheaper options.
Michael Thornton, CEO of Orby TV and UCLA Anderson Alum
"The downward trend in traditional (cable) that we've seen for the better part of a decade has been accelerating as consumers look for less expensive and more flexible options," noted Ian Olgeirson, senior analyst at SNL Kagan.
Rayburn sees a smaller addressable market for Orby TV: those who live in rural areas with poor access to broadband. Such technological deprivation often forecloses internet-delivered alternatives like YouTube TV, Hulu TV, or Sling TV
Leichtman generally concurs. Orby TV, he says, is primarily for "rural, non-sports fans."
One plus side of that, added Rayburn, is that "it's much easier for them to have lower customer acquisition costs because they can target specific people in a zip code or zone."
Thornton, though, is more aspirational. He sees an addressable market that includes not just those lacking broadband and Pay TV's net losses, but anyone currently with an OTA-only setup (difficult to precisely quantify) and even the 40 million-plus who "have a prepaid cell phone service and are familiar with the model," he said.
But even modest numbers might be enough.
"They don't need a lot of subscribers to be profitable," said Rayburn.
Thornton pegs it at around 80,000. Already claiming "tens of thousands of subscribers and growing," across all 48 states, with Best Buy as its biggest retailer, the plan is to break even by no later than early next year.
"We're essentially on schedule," he reported.
Orby TV's lead investor, a pension fund that requests anonymity, will presumably be pleased.
"We've always told our investor that we're open to exit strategies," Thornton said. "(But) it was always about providing a self-sustaining service."
"There's value in being a small company that's profitable," said Rayburn. "Everybody is trying to build such a big company. What's wrong with being a small company that grows every year and makes a profit?"
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At a time when the clinical health care workforce is suffering from burnout and attrition in the wake of the pandemic, Regard’s technology looks to alleviate some of the pressure on health care workers. The startup’s AI-enabled software is integrated directly into a provider’s system and uses an algorithm to analyze patients’ medical records, allowing physicians to more easily diagnose them.
Since launching its flagship product in 2020, Regard’s technology has been used on more than 30,000 patients, according to the company. The startup charges health care providers around $500 to $700 per month for access, co-founder and CEO Eli Ben-Joseph told dot.LA, with its customers including Torrance Memorial Medical Center, Cedars-Sinai Medical Center and roughly a dozen other hospitals across the U.S.
“We’re building something that’s a game-changer for doctors,” Ben-Joseph said. “It’s helping them catch medical conditions that they would have missed. So regardless of market conditions, we’re able to have value and I think investors saw that and got excited.”
Co-founders from left to right: CEO Eli Ben-Joseph, CTO Thomas Moulia, and COO Nate Wilson. Courtesy of Regard
Founded by pre-med students Ben-Joseph, Nate Wilson and Thomas Moulia in 2017, Regard got its start through Cedars Sinai’s Techstars-backed accelerator program. It was at the accelerator program that Ben-Joseph observed physicians’ workflows and saw the need for a product like Regard’s; he recalled noticing how doctors would constantly pop in and out of a patient’s room, shuttling between the patient and a computer where they could enter data and notes.
“I think that’s why so many doctors are burning out now, as they just don’t have software that really enables them,” Joseph said.
Ben-Joseph—who coupled a bachelor’s degree in bioengineering from MIT with a master’s in computer science from Stanford—noted that Regard’s technology can automatically detect up to 50 of the most common medical conditions, including heart failure, diabetes, obesity, depression and anxiety.
“We have a 90% accuracy rate at the minimum,” he said. “Physicians will look at our software and accept it, but it’s not perfect. We tell physicians to treat it like the relationship [with a] medical student.”
This year’s focus will be different from the typical accelerator: Startups in this group will test their products directly with companies active in the ocean economy for four months, collecting data on what works, what doesn’t and further developing proof of concept. Braid Theory will help these startups come up with their business plan and pitches, and connect them to investors and potential partners in the field. In return, it takes an equity warrant that can be converted after three years.
The startups joining Braid Theory typically span industries like port logistics, aquaculture and energy, all of them aiming to test their technologies and untapped opportunities of the burgeoning industry. The accelerator’s goal is to bring those companies from pre-revenue into commercialization.
And all of them are looking to solve challenges within the blue economy ecosystem, many of which have also been exacerbated by the COVID-19 pandemic. With 31% of all goods floating across the ocean to and from the U.S. pass through the Port of L.A. and the Port of Long Beach, COVID-19 strangled supply chains and increased the volume of goods handled at L.A. 's premiere dock by nearly 16% between 2020 and 2021. This created numerous logistical challenges for the dwindling workforce at the nation’s busiest ports while increasing emissions.
“The thing that we're trying to think about are ways in which we can leverage biological systems and software to make more immediate changes in markets that have a low barrier to entry,” Braid Theory co-founder Jim Cooper said of accelerator’s approach to addressing a wide range of climate and logistical issues.
Cooper founded Braid Theory with his colleague Ann Carpenter after the pair left PortTechLA, a maritime and logistics incubator that shuttered in 2016. The two wanted to create an accelerator for port and ocean startups that went beyond logistics and took into account other promising sectors of the ocean economy, including sustainable fish and plant cultivation as well as tools to make the shipping sector more efficient.
Jim Cooper co-founded Braid Theory with his former colleague from PortTechLA, Ann Carpenter.Image courtesy of Braid Theory
Accelerators like Braid Theory are attempting to fill a void in the blue economy ecosystem. Despite being home to several universities with robust maritime research centers and a giant port infrastructure that could be better optimized, few startups survive in Los Angeles due to a lack of early stage funding, according to a 2020 report from the Los Angeles Economic Development Corporation. The accelerator provides funds and lab space and investor connections to nascent startups tackling a wide range of ocean-related problems.
The same report found that ocean startups, particularly early-stage ones, have a difficult time getting funding to accommodate the need for expensive lab equipment like centrifuges, chillers and pipettes. Startups in the blue economy space are primarily funded through federal and state dollars, NGOs and philanthropies, and competitions. But while angel funding has historically been slow to trickle into blue economy startups, some are starting to take note of the size of the market. In the first cohort, eight out of 12 startups received federal funding and investor funding with the help of Braid Theory.
The accelerator’s first graduating class included Florida-based Tampa DeepSea Xplorers, which makes seafaring autonomous vehicles that can scrape the bottom of the ocean and collect data faster for researchers to use as they study climate change impact or source for different medicines. Irvine-based ReCreate Energy is another graduate, which sources algae to create a more sustainable bio-crude oil that can be used at gas and oil refineries. While FlashQ, a Canada-based AI platform, is trying to reduce truck congestion and the emissions caused by them at the port by creating a scheduling platform that optimizes waiting and shipment times.
“The key is the opportunity, the opportunity was there,” Mimi Carter, a biotech investor with the Pasadena Angels, said of the business opportunities in the ocean market. “We saw a market that was unaddressed and is still an emerging market.”
A cluster of cranes at the Port of Long Beach.Photo by DJANA 575/ Shutterstock
To Carter’s credit, L.A. County boasts 75 miles of coastline that the LAEDC expects by 2023 will produce more than $80 billion in regional output, make roughly $50 billion in gross county product, and create over 200,000 direct and indirect jobs, according to a 2020 report. And, according to the Los Angeles Economic Development Corporation, economic and job growth in this sector relies heavily on the creation and implementation of new technologies, making angel investors necessary players in bolstering the ocean economy.
“Not only do we want to be investing in a sustainable product, but someone we count as a first mover,” Carter said of her investment approach. Already, groups like the Pasadena Angels and Techstars L.A. have made investments in the space. Reece Pacheco, a blue economy angel investor, is quietly working on a new venture fund around the blue tech space that hasn’t been announced yet.
“What we're starting to see is there are entrepreneurs who are either coming up through these research firms, or there are entrepreneurs who have cut their teeth elsewhere but care about the ocean,” Pacheco said.
There’s also Braid Theory’s neighbor (and landlord), AltaSea, the nonprofit research hub that has facilitated a number of partnerships with companies across the world.
“We do want to become the leading destination for the blue economy in terms of technology, finance, the education pathways it takes for students to get into these jobs in the future, and then the actual workforce development for the jobs of the future,” said Terry Tamminen, the new CEO of AltaSea.
Braid Theory’s makeshift shipping container-turned-lab is next door to a slew of other startups and projects in the blue economy space. USC researchers are incubating bubbling cauldrons of kelp that could create biofuels and alternative food sources. While Oceanographer Robert Ballard, who found the Titanic wreckage in 1985, set up a sea exploration program a few doors down.
“The ocean is more than a destination for tourists and a place for Jacques Cousteau and David Attenborough to go diving,” Tamminen said. “It's actually something right at our doorstep that we need to protect for our own survival, but it’s also an economic opportunity.”
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