Future Design Podcast #017 with Ian McKee (CEO Vuulr) – Refining Content Discovery

Future Design Podcast #017 with Ian McKee (CEO Vuulr) – Refining Content Discovery

Have you started to notice more and more international content like Money Heist and Dark hitting the global market through Netflix and other streaming services? We are now in the era of being able to access so many varieties of movies and series than ever before. It’s only about to accelerate.

Vuulr is a company that’s creating an open marketplace for global content creators to have access to distribution channels that were never accessible before. Ian McKee, their CEO, talks to us about how they are driving the traditional film industry into a game-changing digital transformation.

Guest: Ian McKee (https://www.vuulr.com/)

Host: Takatoshi Shibayama (https://www.linkedin.com/in/takatoshi-shibayama-9a7b022/)

Music: ShowNing (https://www.showningdj.com/)

 

Transcript

Takatoshi Shibayama

 

In the traditional sense of the industry where content creators meat distributors how is it done traditionally?

 

Ian McKee

So that’s a good question. This is a very old industry so the TV industry itself is nearly a hundred years old but the way that they’ve done business hasn’t changed in the last hundred years which is done face to face. Trader links called markets so if you’ve made a film when you’ve got a TV show and you want to monetize it then you have to license it to broadcasters around the world for the right to be able to broadcast it to their audience and every month there used to be a big trade event somewhere in the world and basically the industry spends its life flying around the world staying in hotels  building booths and having meetings on stands which made it very slow very manual and very  expensive and we’re changing that by bringing that all online. It’s a surprisingly massive industry. It is valued by Boston Consulting Group at 240 billion dollars a year growing at 10% CAGR. So a large growing industry that is just starting to go through its digital transformation.

 

Takatoshi Shibayama

Right, and before when movie creators or TV series any type of content creators met with these distributors they get a chance to explain themselves what they’re doing what the script is are all about and how they want to provide their message across. And maybe there is some kind of dialogue between those two parties to understand more about what they’re creating and have that chance to really understand each other. Now how does the online platform substitute for that kind of human to human interface?

 

Ian McKee

So I think probably it’s worth remembering that there are probably three key stages that a film will go through before it’s kind of seen by an audience. The first is when you know you’ve got the idea for a film and it’s pitched in a like 2 line 3 line concept and then somebody likes it and will fund that idea to go into develop. And so that’s the first stage. At the end of that development you basically got what’s called the Bible but it’s effectively a business plan for the film. The shoot schedule, the budget its idea about the cast and the crew where you’re going to shoot locations all that information is captured in the Bible. And that Bible then is what gets out taken out to be pitched for investment so that people can raise the money to go out and produce the film. Then they go once they raise the money to go into production and you shoot the content they’re going to post. And then at that point when post is finished you’ve got a piece of finished content.

 

So we start at that point when the content is a piece of finished content. And at this point you put all the money into creating the product and now you need to be able to license that out. That’s the function and at that point then doesn’t need to be quite so much human interaction because there’s a trailer which is designed to gonna give you to a taste of what the product is. And our platform also allows the seller to load the screen so screen  might be a watermark version or a reduced resolution version but up a whole piece of content so that the buyer can search based on the metadata and the attributes and the keywords, shortlist mind drill into a title look at the poster look at the cars look at the crew what’s the trailers idea like the trailer decide to watch the screener so they can look that. At the end of a day content stands for falls based on the quality of the content as a matter where it come from, who it’s come from, whether it’s distributed by a company that has a lot of distribution muscle or whether it’s with first-time film maker.

 

So one of the things that we’re very passionate about, is democratizing the access to distribution so that good content can float to the top, being seen by broadcasters, bought my broadcasters and  shown to us as the audience. And average and poor content will sink to the bottom and hopefully we don’t have to see that on TV so much anymore.

 

Takatoshi Shibayama

And what has created this barrier for this industry not to have a digital platform to make this happen because as I said it’s a very old industry maybe they were really stuck in their old ways or maybe there were other barriers that made coming online in meeting content creators to the distributors made it really difficult for them to make this digital transition to happen?

 

Ian McKee

I thought long and hard about this. Why it is like it is? And I guess my personal opinion it is this. So first of all this industry has been absolutely fabulously profitable up until yesterday and the reason it that TV stations were a government granted monopoly right? Every government would grant a limited number of TV stations and that meant that they had a monopoly access to eyeball so advertisers wanted to pay for which means they could charge whatever they liked so TV stations were very profitable and that means that they could pay very high prices for content. Which means that the whole value chain was exceedingly profitable. And  when you’ve got a profitable business, the argument of why do we need to change, it’s not broken. So one of the reasons they haven’t changed is because up until yesterday they were really, really profitable but a few things have happened that have kind of upset that applecart and it’s all tech driven and the thing that really upset that applecart now is that you can deliver video streams not just over an antenna and not just over a collateral like a pay TV in a set-up box but you can deliver it overnight over the Internet. So all of a sudden entertainment becomes an Internet delivered product and that has meant that there is the rise of the global broadcaster Netflix /Amazon some of these other guys who are doing what broadcasters have never been able to do before which is to address the global market. And of course that gives some economies of scale and that’s changing that whole equation. Again also going from linear with advert breaks to video on demand paid by subscription has also changed that equation and all of that means that  for the last 100 years it hasn’t had to change but since just a few years ago there’s been an increasing impetus to change and of course COVID has just put that on fast forward.  Standing in a booth or in one of the cafes outside so to do a business just it’s possible anymore so everybody has been forced to find digital ways of doing that has tilted the landscape in our favor a little bit.

 

Takatoshi Shibayama

Right and but still Netflix and all the other streaming companies also have a criteria on what kind of shows they can put on to the website or the streaming service. It’s not like YouTube where any or the premium version or YouTube where any content creator can put their product onto YouTube for free and distributed widely for free. You still have to meet the judgments of Netflix and the likes to get it onto the streaming site so it’s not a complete democratization even if there is streaming so you still have to fight against other content creators to get their distribution out there. So in terms of trying to get your product in front of the other competitors you still need to do a lot of legwork to get your video to be shown so is there a way that they’re actually doing this may it could be online or maybe it could be on a human-to-human type of basis

 

Ian McKee

Yes the whether you’re an acquisition person for a free-to-air channel or an acquisition person for a pay TV channel or you’re the acquisitions persons for Netflix or Amazon it is your role to search for content and so then evaluate it and then to negotiate the best possible price to acquire the rights for that content. But it’s a buying function both it leads these organizations and if you’re a content creator your first challenge is actually to get your content in front of these people. And if you’re a content creator that isn’t in one of the big kind of media capitals of the world like Los Angeles or London  some of these other places but you came from somewhere a little bit unusual like Papua New Guinea or Iceland or  you would have a really hard job to get your content in front of the buyer to even have a look at it. If you’re a new content creator  you would have a very hard job to get a distributor to take you on the books and they might charge up-front fees just to rip your film with no guarantee of getting any returns at all. But without paying that you had no chance of getting your film in front of the guys at any of those broadcasters it’s free it’s free for you to register on Vuulr it’s free for you to list your content on Vuulr. We don’t charge for this and then we use our own marketing techniques to market content to payers and try and get really a deal so our interests are directly aligned with the content sellers interest because until they make money we don’t make money. So they know we’re working hard to try and get their content and let me do that all around a lot more globally so I mean live on global reach and get their content put in front to broadcasting 249 countries in the world which I have no other way of doing any other means.

 

Takatoshi Shibayama

In bringing on these distribution giants on to your platform seems like a very difficult task. You have to negotiate with that many and spark their interested on getting their business or their even their eyes coming into your online marketplace for your content what was your journey to getting different types of distribution companies to register to your marketplace?

 

Ian McKee

Yes so spinning up a marketplace is really a three phase process. So the first thing you need to do is to put some stock on the shelves so the first phase of our marketing program was to go out to the people with the film with the TV shows and saying please although it’s free take the time and effort to come and list your content on our platform how many buyers they would say well none at the moment so that’s always  that zero to one is the hardest step in the whole process. So but we managed to do that. We got some good content on. Then we have to start gently marketing out the buyers to get the buyers to come and register on the platform so they can understand what the platform is all about. And then once we’ve got enough buyers then we start to start matching content to buyers and start the marketing of the content to the buyers and we really just kind of into that phase at the moment. So where we stand at the moment is that we’ve got about 5,000 registered and approved B2B users that are split between people who are buyers and people are the sellers. There are some people who wear both hats and they’re both about 2,000 people whose role it is to buy. So that’s one of the bigger databases we’ve got nearly 80,000 hours of content listed which makes us I think one of the biggest in the world in terms of content catalogs. So I mean for the buyer that’s makes it a great one-stop shop because they can search a single destination they can search a big catalogue of content from  about 60 different genres in about 70 different countries and languages. They get enormous amount of choice and some powerful easy-to-use tools to help them zoom in on the kind of content that it’s going to be appealing to their audience. So that was a journey really. First of all, get the by the sellers onboard then get the buyers in bull now start matching tell us the buyers and we’re seeing great growth great traction in the industry now.  We are making it really big. The average time for a deal to close if you’re doing it manually is about three to four maybe five months. Deals on our platform close in nine to ten days so not only do we make it more convenient we make it for the buyer we give them the ability to search much more widely and much bigger to catalog and see content that they would never get pitch to them in the traditional. And then they’re kind of streamlining that our platform means that they can get the deal closed in about ten days rather than taking three months between throwing their email and WhatsApp messages and phone calls.

 

Takatoshi Shibayama

Yeah what is the process of they’re actually getting that their contract done so you said before it takes three or five months now it’s ten days. How does that work?

 

Ian McKee

How did we do that magic okay so one of the things that when I was researching  the  problems space the things that I noticed was that a lot of the people in this industry come from the creative side of the industry. And they do the business side because they have to because they need to make money but these are guys who make money so that they can make films they don’t  make films so they can make money right? There they’re almost all creatively led. I can’t remember if that’s left brain or right brain. But it means that they’re not very thorough, they’re not very specific and so part of the reason that it takes a long time because emails go back and says oh I like your film have you got rights availability for this country and the answer has to come back he takes a week because somebody is standing on a boozthat some trade show till they get to their email we come back and they say what rights type do you hunt for that country well I need this right stand what period do you want it explicit non-exclusive whatever hold back. So because it isn’t that interchange of emails is own structured and 99.999% of the time not all the information is in that email at the first part it has to go backwards and forwards many times till enough information has been exchanged that quote can be made. And what we do is we simplify that process by capturing everything in one go up front from the buyer so that when it presented to the seller they’ve got everything they need so that they can immediately make a decision to say that’s a decent deal I will take it or I’ll reject it or I need to change the term surprise the time the exclusivity and counteroffer it back. So we streamline that process by removing that kind of or structuring that exchange of information between buyer and seller so that everything’s there they can just make a decision in the spot.

 

Takatoshi Shibayama

Yeah that’s very useful actually. Yes as you say a lot of the content creators can be using more of their right brain more creative and think about different things other than business. And given your platform where they streamline all of these for that they can know exactly what are the terms that they’re offering before they can they even talk to the potential buyers usually facilitates these transactions much faster I understand that.

 

Ian McKee

W we think about it as the analogies it’s an e-commerce journey so  you need to be able to look at the shop window you need to come in and then we’ve run the ability to check the rights and availability online dynamically to be able to watch the trailer and watch the screener on demand they don’t need to email and ask for a link it’s all there. So that they can go from discovery to being interested to make an offer in a matter of 2, 3, 4 minutes right then they can make an offer that’s how we can get that whole time compression and since today now I talk about entertainment being an Internet deliver product it needs to live by the Internet’s rules and  it’s very hard to run a business when the front of what you’re doing is an internet business but the back of it is very old-school. It takes six months to kind of negotiate anything. We’re helping the industry can have become more nimble and more agile.

 

Takatoshi Shibayama

And were there other online marketplaces that were distributing what you’re trying to do before you started this business ?

 

Ian McKee

Actually there was one in the UK and was one in US and there’s us in here in Asia the two others the one the UK no one knew us have a different business model they follow a subscription business model. The old school classified ads that the Yellow Pages business model where, if you’re a plumber you have to pay to get a big box on the page and hope that means that you’ll get more business. It’s the same business model that they’re following right if you’re a filmmaker you have to pay have a space on their site that’s gonna get you buyers. So yeah we don’t think that the subscription model really is a good fit for the industry and for an online or an internet-based business. It’s a little bit old-school so we’ve gone with the pure playing marketplace model so we don’t charge a subscription just take a 10% commission on when we generate revenue  for the for the seller so that makes it easier for us to onboard sellers because they sell as no that Aaron just are aligned. And so that’s what’s allowed us to grow the marketplace so quickly so that  in the less than 18 months that we’ve been live we’ve gone from 0 startup position to actually having  become bigger than them in terms of catalog in terms of number of buyers and certainly in terms of deal flow through the platform.

 

Takatoshi Shibayam

I find out a lot of these marketplaces or whether it be software businesses the freemium model has been a winning business model because it requires no upfront cash of any sort and it’s very free to get on and make a transaction. So I think really the model here is that it’s free and everybody can start using it. You started off as a media startup company using blockchain technology so can you describe to us how blockchain technology kind of is used in your business model?

 

Ian McKee

Looking at the problem space we realized that tracking ownership is one of the kind of really solid use cases for a distributed ledger and that’s a key problem for the industry is to register and have a an immutable record of who owns the rights to a film and to whom have distribution rights being appointed because it does happen that some people run around the industry saying they’ve got a right to distribute a film when they perhaps don’t. And then also when a transaction has been made that different from say exclusive rights for a particular rights type pair actually a particular time period that also needs to get recorded and that needs to be kind of a trusted with piece of information. So when we saw that problem space we recognized that that’s a great kind of problem space to be using a blockchain solution. That came at the point in time when the Singapore government, the IMDA, was running a national challenge and we submitted our content industry supply chain protocol, which is a blockchain implementation on how to do this. And we won the national challenge when we rewarded the ground and got some support from the NGO right and where we are now is that we’ve built out a working proof concept of how to tokenize that whole transaction and then we’ve now taken that out to the industry and we’ve shown it to some of the majors like Mediacorp, the national broadcaster here in Singapore, and bigger names like Turner and some of the others and I think what we then was that they were fascinated by the idea and they saw the future. But I think it was this moment they’re still struggling with kind of the leap forward into just traditional kind of AWS based cloud-based businesses so the blockchain will be maybe five steps ahead of them.

 

So for the moment the blockchain element for us is an R&D project where we’re continuing to kind of develop and refine the platform but the actual live trading platform that we’ve got at the moment is built traditionally. The relationship database on AWS but the intention is that as the industry matures as the understanding the blockchain matures as a technology matures a little bit there will come a point where we’ll be able to pick up the body of data that we had on the on our AWS instance and move that and deposit that information into our protocol on the blockchain. And that will kick-start that protocol as being the protocol with all of the data about all of films and all of the sellers and so we see that we will simply lift up our tech stack, take out to one side  the parts the relationship database that we no longer need and fit a blockchain based protocol underneath to support that. And the idea that we want to get to is almost like a clearinghouse idea. Use the blockchain and infrastructure on top of blockchain to provide a neutral trust for independent clearinghouse for ownership and the rights availability transactions. And let inhouse organization and companies like Disney are big enough to build their own internal IT can plug into that because it’s openly accessible. Other companies that make rights management software will be able to plug into that so that this clearing house becomes the single trusted repository for the industry’s data

 

Takatoshi Shibayama

So it’s almost like a stock exchange for securities or other things I guess

 

Ian McKee

yes the analogy it was actually one of the one of one of the industry people and said well it’s a bit like the global distribution system in the travel industry right there’s a little bit older in its architecture but you’ve got many sellers of airline seats and hotel rooms and you’ve got many providers of Airlines and hotel rooms and that many remaining is done by the GDS Sabre and Galileo and that’s correct the analogy that we have in mind is to build back on a clearinghouse infrastructure a GDS infrastructure but build on new technology building on a distributed ledger technology.

 

Takatoshi Shibayama

Right and I remember you guys also did in ICO back in the day in 2017 or it was 18. How are the tokens been used?

 

Ian McKee

So the tokenomics that  we’ve developed for that is for what we call the metadata refinery. So the metadata refinery is a platform that we envision building to solve another of the industry’s problems. Which is that the metadata that the industry needs isn’t always available. Let me give an example. If you’re a streaming platform you’ve got should we say 10,000 titles on your platform and some of those titles are films in which case you just need  one piece of metadata but some of those titles are series they’re episodic right you’re Breaking Bad or you’re  Friends or one of those then you might be into five six eight ten seasons each season might be thirteen or twenty episodes and so each episode there’s a synopsis of what’s happening on that. So you multiply that and then you realize that a company like Netflix runs in 120 something countries which have done the math on that let’s say that comes down to at least 50 or 60 different languages. When you multiply the number of titles by the number of episodes and the number of countries and the number of languages you’re into a Herculean task to be able to have the information that you need about what’s happening on season 7 episode 53 of that that thing in Russian, German, Portuguese, Korean, Thai, Vietnamese, and in all the different languages. So the metadata refinery is about using crowdsourcing for fans who are native language speakers to be able to engage to do this work and the token is what rewards that whole process. And is driven and funded from the profit from the marketplace from transacting. So we’re still in phase 1 of getting that going which is getting the marketplace to be successful and phase 2 is to build the metadata refinery and get the people involved. So that’s so we’re on track for delivering that but  clearly it’s a sequential thing and this is how we architect the idea that a successful business infrastructure using fiat currency drives that token, the value of the token because its profit from fiat based business that’s driving the value of the tokens.

 

Takatoshi Shibayama

Yeah I work in the blockchain technology solution space as well and trying to get the governments or different enterprises to get comfortable with the idea of how to use blockchain is taking a very long time. Of course a lot of companies are doing POCs and different types of projects and seeing how this works  there are live product projects out there they’re actually doing it by getting that over to where  a lot of the business is gonna be using blockchain whether it’s large enterprises or SMEs it still seems like a long way ahead. And I love to see companies like yourselves are trying to use this technology to bring forth a new way to preserve data or authenticity over certain content or creation and I hope that you continue doing this and keep your business profitable until then. Well thank you very much for your time.

 

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