For anyone searching for more evidence that online TV is becoming more like linear TV, look no further than the recent acquisition by German free-to-air TV giant ProSiebenSat.1 (P7S1) of a 14% stake in US OTT start-up Pluto.TV – part of a $30m Series B financing round led by P7S1 in mid-October with participation from Scripps Network Interactive.
As Pluto.TV CEO Tom Ryan describes it, Pluto TV is a “virtual MVPD” which delivers “a lean-back interest-led channel offering”, and aims to become “the global destination for free Internet television.”
In its U.S. emulation, it consists of more than a 100 live streamed TV channels displayed in a conventional EPG grid, which currently attract around five million monthly viewers, who pay nothing to watch it: it is entirely ad-supported.
As part of the German deal, Pluto.TV is acquiring P7S1’s new linear VOD platform Quazer, and merging it with the Pluto.TV platform. Quazer consists of over 60 live factual channels, and – according to a recent P7S1 presentation – had notched up 430,000 live test users by September this year, demonstrating a 45-minute average viewing time per monthly active user.
Quazer, like Pluto.TV, has adopted what it calls a ‘lean-back’ approach and an advertising-funded business model, achieved through what P7S1 describes as “targeted short in-stream ad breaks.” Ryan notes that the Quazer app has “already achieved the number one spot on the Apple TV store in Germany.”
If there is a difference between the two companies’ approaches, says Ryan, it lies in the fact that Quazer has a different UX – “its got more of a swipe-based – dare I say Tinder-esque type of UX” – and has chosen to adopt “more of an algorithmic curation approach than our human curation approach.”
Since the involvement of real people in the selection and presentation of content is one of Pluto.TV’s USPs, one can speculate that this might be one of the first changes the merger implies for the current Quazer product.
However, Ryan isn’t prepared at this stage to say exactly what the end-product of the merger with Quazer will look like, noting that he’s only just back from a visit to Berlin, where Quazer is based, during which he met the whole team for the first time.
However, one aspect of the German market that will need to be addressed is that free-to-air TV offerings are already pervasive there. While there’s a novelty value to Quazer being free in the US, notes Ryan, “there’s more differentiation to a product that’s a free TV service in the US than there is, I’d say, in Germany.”
What seems certain is that Quazer will remain a “localised product” – however it’s branded. “As a general statement,” declares Ryan, “entertainment services need to be localized to be successful. Of course, you can have content from one country be successful in another country and a lot of content from the US is popular in Europe – but if you’re an entertainment service, whether that be a video service, TV, music, you name it, I think that that requires a significant amount of localised content that is local to that specific country, culture, language.”
Thus, in terms of Pluto.TV’s global strategy, “there’s a variety of market differences that we certainly look at as we’re thinking about what the right long-term product is for each market, not just US and Germany but other markets around the world,” says Ryan. “We are in the process of really refining the product in the markets that we’re in and then looking at where we expand to, based on that success.”
Currently, the Pluto app is being tested “in different countries, including the UK and throughout Europe,” says Ryan.
For UK viewers, a stripped-down version of the service is currently available through its website using a subset of its U.S. content, but it appears that most of the company’s current UK activities are focused on its relationship with Pay TV operator Sky – which invested $500,000 in the company back in October 2014 as part of its Series A financing, and also participated in the latest Series B round.
Back in 2014, Sky said that the partnership would enable Sky “to draw on the ground-breaking work Pluto.TV are doing to help viewers discover and enjoy the best of online TV through an intuitive and editorially rich TV platform.”
Not much has publically been said about the relationship since then, but it now appears that behind the scenes, Pluto.TV has been actively involved in Sky’s next-generation Sky Q product, which launched in February – and ‘curation’ is a major part of the support it has been offering.
“We have helped them with the delivery of the online video section of the Sky Q set-top box offering,” reveals Ryan, “so we are already working with them on delivering a great curated online video [service] to Sky’s customers. […] There’s an online video section which is quite a prominent section of the interface on Sky Q and if you navigate to that, it’s a Sky service – Pluto has been helping Sky with the creation of that curated video offering.”
Ryan makes clear that in no way can this be said to represent a UK version of Pluto.TV – indeed, it’s part of a premium paid-for service, while Pluto.TV remains committed to its free, ad-supported model.
Perhaps the pre-existing relationship with Sky is one reason why Pluto.TV chose to launch its first localised service in Germany rather than the UK, where – on the face of it – the lack of a language barrier and a range of content much of which would be familiar in the UK – would seem to create a more propitious environment.
For the moment, however, Ryan says he has no “specific timeline” to discuss on the possible launch of a localised service in the UK, or indeed, any other country.
“Pluto right now is focused largely on the North American market,” he says, pointing to the fact that “we have the American or North American product available in other countries, more on a sort of a test limited basis, without investing in localising.”