All posts in “Media”

Real Vision, a media platform for finance and business, raises $10 million

Real Vision is entering the crowded business and financial new space with a bang. The company, which recently raised a $10 million Series B after a $5 million A round, is working on a number of new initiatives including distribution on Apple TV, a content distribution partnership with Thomson Reuters and an upcoming documentary on PBS.

The documentary, “A World on the Brink,” will focus on threats to the global economy. The team is aiming at viewers ages 36-45 instead of the older Boomers who prefer cable financial news far.

“Unlike most video-based media businesses where short-form video is deemed to have the highest user engagement, Real Vision have found that almost 70% of their customers who start a half, or an hour-long, video will watch all of it. This engagement in long-form content is breaking boundaries within the industry,” said co-founder and CEO Raoul Pal. “Sensationalism and clickbait is at an all-time high. Traditional financial news has continued to degenerate into attention-seeking sound bites that are at best of little value and at worst, downright dangerous.”

Pal worked at Goldman Sachs before moving into media.

“I lamented on the state of financial media – how it had let the ordinary person down repeatedly in 2000 and 2008 and was busy treating finance as entertainment and not taking into account that this was people’s life savings they were dealing with. I also noted how far financial programming had become versus the fast-changing world of on line video. Viewing habits and content types were changing but the financial TV incumbents hadn’t changed,” he said “I decided that it was time for someone to disrupt the way in which television worked – particularly with regard to financial and business information.”

The team will use the cash to create programming aimed at “those who want to create new business opportunities and startups, manage new enterprises and leverage new technology.” The videos can run as long as 90 minutes but usually hit the five to thirty-minute mark. They are also distributing their content to Thomson Reuters . It uses a subscription-based model and costs $180 annually.

The team met at a bar in Jesus Pobre, Spain. Pal and his co-founder Damian Horner found each other during their travels and had drinks at a place called Rosita’s where Horner, a former ad exec, learned of Pal’s experience in finance and they both mapped out a new type of online news channel with some real energy. Thus was born a model that mixes on-demand with high-impact news, something that few cable stations can manage.

“Almost all traditional media outlets rely on an ever-dwindling advertising revenue model. Real Vision is subscription-based and built that way from the ground up,” said Pal. “Most media business are still trying to figure out a subscription model to diversify away from advertising. In a highly competitive digital world, the pressure ‘to get clicks’ has a massive impact on the tone, direction and quality of the editorial content itself. Real Vision’s subscriber model means there is no need to sensationalize, no dumbing down of ideas, no incessant ‘breaking news’ headlines, no clickbait soundbites and no cutting things short for commercial breaks.”

TheSkimm closes its $12M Series C with big names Shonda Rhimes and Tyra Banks on board

In March, the female-led media company and newsletter provider theSkimm reported it was raising a $12 million Series C from Google Ventures and Spanx founder Sara Blakely, along with several existing investors. Today, the company is confirming its Series C round has closed with a number of new, mostly female investors joining — including big names like Shonda Rhimes and Tyra Banks.

Variety was the first to report the news of the new investors.

The Series C’s additional investors include former TV journalist Willow Bay, now dean at the USC Anneberg School for Communication and Journalism; Jesse Draper of Halogen Ventures; Shonda Rhimes; founder and CEO of GingerBread Capital, Linnea Roberts; CEO of ELY Capital, Hope Taitz; as well as the Goldman Sachs Group, Inc.; and Michael Karsch of Juice Press.

Earlier Series C investors included GV (formerly Google Ventures); Spanx founder Sara Blakely; plus former lead investors 21st Century Fox, RRE Ventures and Homebrew Ventures.

TheSkimm began its life as an email newsletter, founded by former TV news producers Carly Zakin and Danielle Weisberg. The newsletter targets millennial women who want an easy way to keep up with the key news of the day. What makes the product so appealing is how it’s written in a conversational tone, making it accessible to a wide audience who often finds reading the news a dreary but necessary chore. Mixed in with its highlights from key U.S., political and international news are samplings of stories from pop culture and the entertainment industry, which gives the newsletter a bit of a palate cleanser — something that’s much appreciated these days.

That newsletter has now grown to around 7 million subscribers, the company says. (This is the same number it reported in March.)

The company has also expanded to other products since its launch, including a $2.99 per month subscription-based app for keeping up with upcoming news and televised events, a podcast, as well as original videos for YouTube and Facebook Watch via its production arm, Skimm Studios.

Its video offerings include Skimm’d with…” and “Get Off the Couch” for Facebook, and digital series “Sip n’ Skimm,” which landed an interview with Canadian Prime Minister Justin Trudeau, followed by a discussion with House Speaker Paul Ryan assessing the proposed GOP tax plan.

Meanwhile, theSkimm’s podcast, “Skimm’d from The Couch,” reached No. 1 on Apple Podcasts hours after its launch.

The company generates revenue from a variety of sources, including its app subscriptions, native ads, affiliate, content licensing and distribution, theSkimm notes in an announcement. The company is not offering revenue details, however.

“As a female led and founded company, we are excited to have the opportunity to bring such an impressive and dynamic group of female investors into theSkimm fold,” co-founders and co-CEOs Zakin and Weisberg, said in a statement. “With a majority of our audience being female, it’s vital to the success of our business to involve women at every single level, and that includes our investors. With their added perspective and resources, we look forward to this next chapter in our company’s history.”

Banks added she had a personal appreciation for the product, in addition to her desire to support female entrepreneurs.

“Going from one business meeting, to the next studio set, and as a new mama, it’s more difficult than ever to stay up to date on the day’s headlines,” the media mogul said. “theSkimm created a media platform that works seamlessly with on-the-go lifestyles. As a fervent supporter of trailblazing female-led businesses, I am thrilled to be a part of the next phase of theSkimm’s development,” Banks said.

The company didn’t offer many specifics in terms of how it plans to utilize the additional capital, but told us that it plans to “continue evolving the brand” and grow its product offerings — both premium and free. One of its plans involves expanding its No Excuses political-engagement campaign, reports Variety, which registered 110,000 U.S. voters.

New York-based theSkimm has 72 full-time employees and has raised $29 million to date.

A leaked look at Facebook’s search engine for influencer marketing

Facebook’s next money-maker could be this tool for connecting marketers to social media creators so they can team up on sponsored content Facebook ad campaigns. The Branded Content Matching search engine lets advertisers select the biographical characteristics of creators’ fans they want to reach, see stats about these audiences, and contact them to hammer out deals.

Leaked screenshots of Facebook’s promotional materials for the tool were first attained and published in german by AllFacebook.de. TechCrunch has now confirmed with Facebook the existence of the test of the search engine. Facebook first vaguely noted it would build a creator-brand tool in March, but now we know what it looks like and exactly how it works.

Even though Facebook will not actually broker or initially take a cut of the deals, the tool could equip brands with much more compelling and original marketing content. That could in turn encourage them to spend more on Facebook ads to spread that content, while also making the ads users see more entertaining and tolerable so they spend longer on the social network. By getting creators paid, even if not directly by Facebook, they’ll invest more in the quality of their content and size of their following on the app instead of with competitors.

How Facebook’s influencer marketing search engine works

A Facebook spokesperson explained the motive behind the tool like this. Facebook wants to help businesses find creators who can reach their target audience in an authentic way, while allowing creators a path to monetizing their Facebook content and fan base. Creators opt in to participating in the test and set up a portfolio showcasing their audience size and metrics plus their best branded content. Facebook is starting the program primarily with a set of lifestyle brands and creators.

Advertisers in the test can search for creators with specific audience demographics using a wide range of targeting options. Those include both general and industry-specific parameters like:

  • Top countries where they’re popular
  • Interests
  • Gender
  • Education history
  • Relationship status
  • Life events
  • Home ownership status
  • Home type

The search engine’s results page shows a list of creators with each’s audience match percentage to the search terms, percentage of their followers they reach, engagement rate, follower count, and video views. Advertisers can save their best matches to private lists, and reach out to contact the creators, though Facebook is still figuring out if it’s best to connect them through their Facebook Page or traditional contact info. One question is how Facebook will ensure it’s only connecting businesses to brand-safe creators who won’t get them in trouble by posting racist, sexist, or objectionable content the way star YouTuber PewDiePie did.

The deals for product placement or sponsored content creation and sharing are then worked out between the brand and creator without Facebook’s involvement. The platform is not taking any revenue cut during the testing phase, but longer-term will evaluate whether it should. The only thing Facebook doesn’t allow is pure re-sharing deals where influencers are paid to just post the brand’s pre-made content they didn’t help create.

The crowsourced future of advertising

Foreshadowed the launch of its dedicated Facebook Creator app in November, this is the company’s first serious foray into influencer marketing. This emerging industry holds the potential to overhaul the way advertising content is produced. In days of old, brands couldn’t target very narrow segments of their customers since they were using broadcast mediums like TV commercials, magazine ads, and billboards, or endoresements from mainstream celebrity like movie actors. They might only make a few separate styles of marketing compaigns that would appeal to wide swaths of their target audience.

With the Internet and targeting data-rich social networks like Facebook, they can reach extremely specific subsets of their customers with marketing messages tuned to their identity. But reaching these niche audiences with corporate content that feels authentic rather than fake and smarmy is difficult. That’s where social media creators come in. Not only do they have a pre-existing and intimate relationship with their fans who’ll take their endorsements to heart. They’ve also already spent years figuring out exactly what type of content appeals to these specific people. When they team up with brands, the businesses get their products recontextualized and interpreted for that audience with content they could never come up with themselves.

Twitter realized this early, which is why it acquired creator-brand deal broker Niche for a reported $50 million back in 2015. [Disclosure: I got fascinated with this industry because my cousin Darren Lachtman is one of the co-founders of Niche] But now as Facebook seeks to attract influencers and their audiences to its social network, it’s trying to find ways to get them paid. Otherwise, they’re likely to stray to YouTube’s ad revenue shares and Patreon’s subscription payments. So far Facebook has tested tipping and subscriptions from fans, as well as letting creators host ad breaks — essentially commercials — during their videos. But brands want the creators’ help designing the content, not just distributing it.

But what about Instagram and YouTube influencers?

The Branded Content Matching search engine will help brands find those creators…but only on Facebook for now. The tool doesn’t pull in their audience sizes and metrics from other important platforms like Instagram, YouTube, Twitter, Snapchat, or Twitch. Brands don’t get a holistic view of the value and reach of a creator, who might be way more popular on another platform than Facebook.

And really, Instagram is where all these influencers spend their time and share their content. Though Facebook owns it, it says it’s not showing Instagram influencers in the tool at the moment. Adding them in, the same way advertisers can push ads to Facebook and Instagram from one interface, would make the search engine much more powerful.

There’s already a whole industry of independent creator search engines and databases for marketers like Hypr, Whalar, Fohr Card, Tap Influence, and Creator IQ. If Facebook built one with first-party data from across its properties, or even pulled stats from competing platforms, it might squash these startups. Alternatively, it might buy one to ramp up its efforts here like how Twitter bought Niche.

Facebook is running out of ad inventory in the News Feed. It needs to make each ad better and more watchable so it can grow revenue by charging more per ads rather than selling more ads. Meanwhile, yesterday it started testing ads in Facebook Stories, where brands will need help navigating the more personal, vertical video format. Awesome content made by creators could be the answer. And Facebook could finally start helping more of these artists, comedians, and storytellers to turn their passion into a profession.

MoviePass parent drops another 46%

There’s been another bomb at the box office, and it isn’t a movie.

MoviePass parent Helios & Matheson lost nearly half of its remaining value today as investors continued to flee the cash-burning movie service. That drop followed a 31 percent dive yesterday, after the company filed a statement with the SEC warning that it would have to sell equity in the coming weeks for it to remain solvent. Since Thursday’s opening bell last week, the stock has moved from $2.13 to $0.79, a drop of 63 percent. The company’s market cap is now $51.44 million (TechCrunch parent company Verizon owns shares of MoviePass through its sale of Moviefone).

MoviePass CEO Mitch Lowe said in a written statement that “Our burn rate has been slashed by 35-40% by the implementations and abuse prevention measures we have put in place over the last few weeks. We have always known, from when MoviePass took off in August, that it was going to be a high cash burn business model. We are not changing our guidance on 5 million subscribers by the end of this year – which should make us profitable/cash flow positive according to our business model. We have access in capital markets to over $300 million. So there is plenty of cash available to sustain the subscriber growth and movie-going habits of our users.”

Those are the facts as we know them, but let’s consider some of the options the company has now.

Even if you believe the market demand for Helios’ stock (I, for one, find them incredulous), there is an enormous challenge of converting that money into equity now. The envelope math looks like this: A month ago when the stock closed at $4.21, buying 20 percent of the company would have cost roughly $55 million. At the company’s current average burn rate of $21.7 million per month, that cash would have lasted approximately 2.5 months.

Now though, with the stock price so low, getting cash on the balance sheet today is a much harder proposition. That same $55 million that bought an investor a fifth of the company last month would be a complete buyout today. Buying 20 percent only costs a bit more than $10 million now, or roughly two weeks of burn.

So what’s the trick here that will save the company?

The obvious option is to radically control burn. The company could offer pricier tiers for heavy users of MoviePass, and could put a ceiling on the number of films a customer can watch per month as it did temporarily a few weeks ago. Lowe seems deeply committed to overall subscriber growth though, and that makes any sort of constraints on the product unlikely. The reason is that subscribers are the leverage Lowe needs to negotiate better partnership arrangements with theater chains, so he has to keep trying to grow users rapidly.

One theory is that the company could be negotiating equity deals with theater chains like AMC, which could be enticed by the low price of the stock to “buy in” to MoviePass’ popularity. Such media equity partnerships are not unusual — Sony, for instance, was a major shareholder in Spotify, as was Warner Music group, although both have since sold off large percentages of their holdings. Given the reliance of MoviePass on theater chains, building an equity partnership could prove to be the service’s savior.

A well-publicized partnership — including discounted movie tickets for MoviePass — could boost the stock significantly since the cost savings would improve the company’s burn rate. That could be an enticing proposition for the chains, since they could realize an almost immediate gain on their investment, plus the ongoing proceeds of a partnership going forward.

The other tactic would be to sign up more MoviePass subscribers who watch limited films. This is what might be called the “gym membership model” of trying to identify customers who want to buy a membership as an aspirational purchase, but who won’t actually use the facilities often. The challenge, beyond the incredibly short time period to try to build that marketing funnel, is that MoviePass appears to lose money on the very first ticket a customer purchases. The question isn’t how much revenue each customer generates, but how much the losses can be minimized.

The situation is a high-wire act, and the company will either hit the ground in the next few weeks, or it will right the ship, limit expenses and get enough equity investors to give it some cash to burn and keep on growing. I’d say use your MoviePass while you have it, but then again, that’s exactly why the company is faltering to begin with.

MoviePass parent drops 31% on looming cash crunch

The big question in the media world today is whether MoviePass parent company Helios and Matheson can stanch the bleeding of its cash flows before it becomes insolvent.

In a new filing today with the SEC, Helios informed investors that it had $15.5 million in available cash, with another $27.9 million in accounts receivable from members of MoviePass on longer-term subscriptions. Under accounting rules, those dollars can’t be used to fund current expenses. The company said that it has lost $21.7 million a month between September and April this year.

Investors dumped the stock following the filing, and the stock was down 31 percent at the close of the equity markets today (TechCrunch parent company Verizon owns shares of MoviePass through its sale of Moviefone).

While linear math would seem to indicate that the company is on track for insolvency in a matter of days, the filing and its CEO are maintaining an optimistic line. The company said that following a series of product changes, including more verification that a subscriber actually watched a film themselves, it should reduce its cash loss on the service by 35 percent during the first week of May.

In an interview with TechCrunch, MoviePass CEO Mitch Lowe struck a positive view on the future of the business. He argued that unlike in the past, where a new app or service would raise venture capital and then invest it in the business, you can just handle capital concerns as you need them. “Today what you do is you raise enough money month by month to fund essentially that negative cash flow,” he said. “We are 100% confident that we have the committed funding to do it.”

In order for the company to avoid insolvency, the company will need to continue to sell its common stock to investors on a regular basis to fund that negative cash flow. The company said that sales of its common stock will need to begin this month in order to fund operations. If the company is unable to do so, “we may be required to reduce the scope of our planned growth or otherwise alter our business model, objectives and operations, which could harm our business, financial condition and operating results,” it wrote in the filing.