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.
<p>"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." </p><p>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. </p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzMwNzc4Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwNDgyMzE0NX0.tbHHvLADSJX00FWyfh41zeoisjg2-LcsE7IsyNM8ZCo/image.jpg?width=980" id="04eec" class="rm-shortcode" data-rm-shortcode-id="bdfe51bbb792b89b2bdd1fbefbc8fbd7" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Orby TV's program guide integrates its broadcast and satellite channels</small></p><h3>TV for a Toll </h3><p>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. </p><p>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.</p><p>"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."</p><p>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. </p><p>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.</p><p>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.</p><p>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.</p><p>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. </p><h3>Who's it for? </h3><p>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.</p>
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzMwNzg2NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTU5NzYwMTQ4N30.bulOxiKZ4o1KVTw5ElPt53dotJCIPh8ym2My7cUxg-A/img.jpg?width=980" id="de719" class="rm-shortcode" data-rm-shortcode-id="d62d7994c1bbd8d7f0ee1e924a8b691f" data-rm-shortcode-name="rebelmouse-image" />
Michael Thornton, CEO of Orby TV and UCLA Anderson Alum
<p>"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.</p><p>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</p><p>Leichtman generally concurs. Orby TV, he says, is primarily for "rural, non-sports fans."</p><p>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."</p><p>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.</p>
<p>But even modest numbers might be enough.<br/></p><p>"They don't need a lot of subscribers to be profitable," said Rayburn. </p><p>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.</p><p>"We're essentially on schedule," he reported. </p><p>Orby TV's lead investor, a pension fund that requests anonymity, will presumably be pleased. </p><p>"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."</p><p>"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?" </p>Related Articles Around the Web
Read more
Show less
He Was Once Widely Considered the Heir Apparent at Disney. Now He’s the Chief Executive of TikTok.
May 18 2020
Kevin Mayer, once widely considered Bob Iger's heir apparent at The Walt Disney company, will become chief executive of TikTok and chief operating officer of ByteDance, TikTok's Beijing-based parent company.
Rebecca Campbell, a 23-year Disney veteran who was most recently president of Disneyland Resort, will replace Mayer as chairman of direct-to-consumer and international, the company reported. Disney also announced that Josh D'Amaro, previously president of Walt Disney World Resort, will become chairman of Disney's parks, experiences and product – the role formerly held by Bob Chapek, who succeeded Iger as Disney chief executive in February.
<p>That selection of Chapek precipitated expectations around Hollywood that Mayer – who had overseen a successful launch of Disney's streaming service, Disney Plus, and had previously helped orchestrate Disney's acquisitions of Pixar, Marvel, Lucasfilm and 21st Century Fox – would likely look elsewhere for his next move. </p><p>More surprising than Mayer's exit is the appointment of Campbell to fill his shoes. The coronavirus crisis has <a href="https://dot.la/disney-the-most-magical-place-on-streaming-2645928478.html" target="_blank">clobbered</a> Disney, but the company's prior decision to invest heavily in tech – epitomized by its acquisition of BAMTech, subsequently spun off into Disney Streaming Services, which powers Disney Plus – has been a relative saving grace. While Campbell oversaw the launch of Disney Plus in Europe, the Middle East and Africa, the majority of her experience has been in the legacy business of Disney's ABC television unit. Campbell now helms the most future-oriented piece of the conglomerate, which despite its strong start must contend with fierce competition from <a href="https://dot.la/netflix-google-los-angeles-2645965570.html" target="_blank">tech giants</a> like Netflix, Apple and Amazon. With Cambell and D'Amaro moving up the ranks, Chapek appears to be installing a new regime of executives whom he has worked with before; both will report directly to the new CEO. </p><p>Mayer, meanwhile, goes onto one of the hottest media companies around. His experience with M&A should serve him well as COO of ByteDance, and his Disney Plus reign should prove useful for capitalizing on the momentum of the social media app that has reportedly been downloaded over two billion times. Mayer is also inheriting a company, however, that has been under <a href="https://dot.la/tiktok-privacy-issues-2646002525.html" target="_blank">increased scrutiny</a>, including a complaint filed last week to the U.S. FTC that it is openly flouting child privacy protections.</p><p>---</p><p><em>Sam Blake covers media and entertainment for dot.LA. Find him on Twitter @hisamblake and email him at sam.blake@dot.LA</em><br/></p>
From Your Site Articles
- Disney's Bob Iger Will Focus on Digital Innovation - dot.LA ›
- Bob Chapek Named Disney's New CEO - dot.LA ›
Related Articles Around the Web
Read more
Show less
Google Ventures Guru & Former Studio Exec Craig Kornblau Talks the Future of Film in a Streaming World
May 18 2020
Craig Kornblau, now entertainment and media advisor for Alphabet's venture arm, GV (formerly Google Ventures), is familiar with disruption.
As president of home entertainment at Universal Pictures managing revenue over $2 billion, he saw his booming DVD business blow up during the 2008 financial crisis as consumers tightened their spending, having decided that what they wanted from their films was not ownership but access. But that experience showed Kornblau, who began his career at Disney, that adversity also creates opportunity. Out of that sea change emerged the rise of Redbox and Netflix rentals, which, he says, kicked off the modern era of entertainment.
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI4NTcxNi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NDU0MDM4N30.8UaQOEcvDFOCz_C_1Evti5bPX7qAeXdyxWWbjpD0F_U/img.jpg?width=980" id="47bf8" class="rm-shortcode" data-rm-shortcode-id="f56f20e5ce877aac04424e5f949ba4d5" data-rm-shortcode-name="rebelmouse-image" />
Craig Kornblau is entertainment and media advisor for Alphabet's venture arm, GV.
<p>Today many argue that disruption of the entertainment industry has been accelerated by the coronavirus. As consumer behaviors and habits change, one increasingly vulnerable bulwark is the long-entrenched theatrical window, which has historically reserved an exclusive exhibition period for movie theaters.</p><p>Meanwhile streaming is increasingly available in the homes that are now our cocoons, and appears to be strengthening its hold on the future of video. As an example, Disney revealed in its most recent earnings report that its legacy businesses built on theme parks, retail and movies have been shellacked, while its streaming service Disney+ has outperformed expectations.</p><p>The upshot is that a film industry that was long tethered to screenwriter William Golding's maxim that "nobody knows anything" now finds itself shrouded in perhaps more uncertainty than ever.</p><p>For some clarity, dot.LA caught up with Kornblau to hear how his experience at both major studios and startup ventures shapes his thoughts on what the coronavirus pandemic will do to Hollywood, how the streaming wars will unfold, and which entertainment innovations he's most bullish about on the horizon.</p>
<p><strong>As the</strong><strong> forced shuttering of theaters has brought tough decisions to studios regarding what to do with their already-produced films, the sanctity of the theatrical window has come under scrutiny. Tension boiled over with a very public open-letter battle between leaders at Universal Pictures and AMC Theaters. You used to lead a business that directly followed that window of exclusivity; how do you see this playing out?</strong><br/></p><p><strong>Kornblau</strong>: In reading all the articles covering those comments by Jeff Shell (Chief Executive of NBCUniversal) and Adam Aron (Chief Executive of AMC Theatres), you'd imagine the studio wants movies to come out at home the same day they reach the theater. But I don't think there are a lot of executives that want that. I think they want to not have a blackout period.</p><p>Historically, up until the pandemic, movies would come out in theaters and there'd be a 74-to-85-day delay until they were available in the home, which is absolutely the silliest thing ever. 90% of the box office is generated in 30 days on almost all movies, so films usually start to leave theaters after 30 days. Is there another industry where hundreds of millions of dollars are spent creating and marketing a product, it's only available for 30 days and then there's nowhere to use it or see it again for another 45 days? </p><p>If you're doing 90% of your business in 30 days, it's silly that there isn't an opportunity to see films at home on day 31. I think that's where the rubber will meet the road: the exhibitors will acknowledge that has to happen.</p><p><strong>What do you think the studio heads are thinking about right now regarding their release strategy?</strong> </p><p>A lot of what they do will depend on how the coming-out party occurs. In the U.S., will theaters open incrementally, first in certain areas where people feel comfortable going to a theater? Will theaters open in some places but stay closed in places with a big chunk of America's theaters, like L.A. or New York? I think studios are thinking about whether they want to wait to release their films until they have 80% or more of the theaters open. Plus, how do you market a movie that won't come out around the country all at once?</p><p>Then on the other side, it's crystal clear that consumers are bingeing and taking full advantage of streaming. Now that we're all bound at home those consumers that haven't gotten into the SVOD/AVOD game are learning about it very quickly and embracing it. It's clear consumer habits are shifting much more broadly and quickly.</p><p>The result will be continued investment in your home theater. This has been going on for a long time but the pandemic has given more reason to invest in your home, since it's where you're spending so much time. The tech keeps getting better and people are spending more and more on their in-home experience. It may not be the home theater of a movie mogul, but it's yours.</p><p>So the hurdle to leave your home to go to a theater will keep getting higher. It's been doing that for years; it's not a radical change but it's an acceleration and amplification of a trend that's been going on for a long time. </p><p><strong>Speaking of streaming, with so many players in the space, some analysts describe the current situation as unsustainable. Where do you think it's headed? </strong></p><p>I think there's going to be more consolidation. The one thing that's crystal clear about technology and the world we live in today is it's made up of very few enormous companies that control an awful lot. I don't see that being any different in the world of entertainment. You don't have to look further than what's happened in music, where the six majors eventually shrunk down to three. There are an awful lot of streaming services and already consumers are questioning whether they need them. I think there will be fewer services but I think they'll have an extremely wide breadth of product to satisfy the consumer. </p><p>What's interesting to me is the appetite for risk that the major tech companies have. If you look up the top R&D spenders for last year, what you'll see at the very top is several of the biggest tech companies that happen to have streaming services. They're spending over $20bn on R&D every year. The entertainment companies aren't even on the list. You could argue their spend on content should be included in their R&D, but even if it was they may not make the list. I think we live in a world where the big get bigger and the appetite for risk gets bigger. </p><p><strong>Do you think that appetite for risk will lead to tech companies making acquisitions?</strong></p><p>I remember being at the studios and being fearful that Microsoft or Apple or Google was going to buy us. What became very clear very quickly, though, is that they really didn't need us. What they needed was creative talent. And with their money and their appetite for risk, they're a magnet for creative talent. It goes back to the big getting bigger. There are few tip-top creative names that haven't aligned with these big companies but the ones that have't probably will very soon. So the companies will increasingly have the content along with their tech. These are complex companies that see the power of entertainment and want to use that power to drive their entire business.</p><p><strong>Why do you suppose they view entertainment as the way to do that?</strong></p><p>It's the emotional connection with consumers. In my career, I stayed in home entertainment for 30 years because I never thought my business was about convincing someone to own or buy something; it was all about providing consumers an emotional experience, with amazing, culture-changing storytelling. I think the tech companies approach it similarly. Their entertainment business provides consumers with emotionally resonant experiences and stories, and that can help the rest of their business whether you're Apple trying to sell devices or Google selling services. </p><p><strong>What types of entertainment innovation are you excited for on the horizon?</strong> </p><p>The reason I decided to work with early-stage and growth companies is, having lived in big corporate America and big entertainment companies, it's really hard to find massive innovation in large companies. I think real innovation is going to come from small companies.</p><p>There's an awful lot of attention on AR. As you sit at home, you can have experiences as if you're not at home, and I think that's a super interesting space. I'm not necessarily talking about big goggles, but experiences you can have on your smart devices -- tablet, phone. I think AR is poised for a massive explosion of growth.</p><p>The other area is the cloud. It's fascinating how before the pandemic many companies were already moving quickly to the cloud while others remained hesitant. What it translates to is now some companies are really hurting, those who had their equipment on premises, while companies that had moved their business to the cloud and can still run their business relatively easily. I think the pandemic will accelerate the movement to the cloud -- it's been happening, but I think it will create much more rapid movement there. In entertainment it'll change the face of production and distribution.</p><p><strong>How have you seen the Los Angeles tech scene evolve throughout your career?</strong> </p><p>It's been extremely exciting to see the movement of all these enormous tech companies to L.A. They may not all be based here but they have a significant presence. It's not just Silicon Beach — it's all over the city, from Santa Monica to downtown. The spark of creativity that's been brought by these young companies that have chosen L.A. as their home rather than what may have been the traditional choice of the Bay Area is very exciting. And it's just starting. </p><p>(<em>This interview has been edited for clarity and brevity</em>)</p><p>---</p><p><em>Sam Blake covers media and entertainment for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA</em><br/></p>From Your Site Articles
- The Fund Launches a Venture Capital Firm in Los Angeles - dot.LA ›
- What Venture Capitalist Brian Lee Looks for in a Startup - dot.LA ›
- Q&A on Future of Film with Google Ventures & Studio Exec - dot.LA ›
Related Articles Around the Web
Read more
Show less