Thursday, September 5, 2013
M-GO's Take On The Digital Entertainment Streaming Market, with John Batter
Story by Benjamin F. Kuo
Does the world need another, online streaming media service for movies and television? Culver City-based M-GO (www.mgo.com) thinks so, with its own twist on providing content to consumers. We caught up with M-GO's CEO, John Batter, to hear about where M-GO fits into the streaming media market.
What's the story behind M-GO?
John Batter: M-GO was formed about two years ago as a joint venture between DreamWorks and Technicolor. I personally come from DreamWorks, and was President of Production previous to taking the opportunity to come run M-GO. One of the things we recognized at DreamWorks, based on surveys we had with consumers, was that we were seeing an erosion in the DVD business, as all studios have been seeing. It's been a year on year rapid erosion. As we surveyed consumers, many of the had the intent to transact digitally, but just weren't doing so for a number of reasons. It was just too hard, or too scary, or too difficult to find what they were looking for. So, they just ave up.
We had the notion that we could create a service that was aimed at the mass market, which was really user friendly, which provided a service to the consumer, and that helped bring back the fun in the entertainment experience, so that we could help the consumer bridge the digital divide. As it turns out, as we thought about that, we started looking for partners to help us build a platform. It turns out that Technicolor had already been separately developing a platform for digital media distribution. We saw that platform just before CES in 2011, and since it did about seventy percent of what we envisioned, we put the joint venture together.
Why a new, streaming service -- and how is this different from Netflix, YouTube, Hulu, etc?
John Batter: One of the first decisions we made, was about the type of content we wanted to offer. We wanted to offer premium content, and the freshest content, with first availability. Our strategy has been to offer movies, day and date with DVD, or earlier, if there happens to be a pre-release, digital only window. We're next day TV with the networks. We've gone out and got content deals with all the major studios, with the exception of Disney and ABC. Stay tuned there. That was based on our wanting that fresh content, and our experience in the DVD market, where our experience was that consumers value highly, and want the newest, freshest releases.Once we decided that was the content strategy we wanted to pursue, that means we were, which meant that we'd definitely be transactional. That's how content deals work in Hollywood.
How long has the service been available?
John Batter: We went into beta about eight months ago, last December. We have been out of public beta for about four months now, and we're just in the process of starting the cycle of delivering our second generation application across the platforms we support.
Talk about that platform strategy?
John Batter: The strategy is to be available on any sort of device that consumers own, and wherever consumers want to meet content. That means smart TVs and other devices in the living room, to tablets and laptops, to your phone. For instance, you can start watching a movie on your phone, pause it, start it up on your laptop or tablet, pause that, and then go watch it on your TV. We're already preloaded and prominent on Samsung, LG, and Vizio smart TVs and Bluray players. We're a button on Vizio. We're now preloaded on about two thirds of smart TVs, and half of all Bluray players. That has us preloaded on 40 million devices in a prominent position.
How do the economics of the content work out for you?
John Better: Essentially, the margin and business model looks awfully like a large, retail model, and those businesses work very well at scale. What's needed here, is to get to scale. The wind in the sails is really twofold, with consumers moving from physical to digital. If you look today at physical and digital transactions, it's a $20 billion market, and more than half that market is still physical today. Lots of consumers are still making the transition. The second piece, is you asked about Netflix, and we're really not competitive with Netflix at all. We're complementary to Netflix and to HBO, the subscription services. In the same way that rentals and physical sales lived side by side with subscriptions for years and years, digital rentals and digital sales will live side by side with digital subscriptions. While we've had many HBO and HBO go subscribers, and many Netflix subscriptions, I feel we're completely complementary to them. We like the way that Netflix has been training consumers on streaming, that it's okay to stream, and we find that our content doesn't overlap a lot. We've got different offerings and a different business model, which is highly complimentary.
Where do you think we are overall in the physical to digital transition?
John Batter: It's happening. I think it takes services like M-GO and others, who are built for the mass market, to take the mystery out of what's going on with digital. We've got to try to reduce the mystery, and make it fun, and provide a safe way to transact
Finally, is all the development for M-GO happening here in LA?
John Batter: We have 135 people in LA, about 80 percent are in technology and product.