My Interview with TotalVid’s Founder Karl Quist
TotalVid is a new internetwork that is broadcasting in the land of internet television. TotalVid has specialized in offereing various long tail extreme sports, a natural place to start, to it’s viewers and is now beginning to branch out into other long tail content areas.
I had an opportunity to do an email interview with Karl Quist, the founder and General Manager of TotalVid, and talk about TotalVid’s role in the new world of internet television.
TH (Thomas Hawk): Tell me a little bit about Karl Quist, what is your position at Total Vid? When did you start Total Vid? What did you do before Total Vid?
Have you ever been or are you personally involved in extreme sports?
KH (Karl Quist): I’m the GM (General Manager). I started the company in July of 2003 for Landmark Communications, our parent company. Before founding TotalVid, I had worked as Director, New Ventures for Landmark. My role there was primarily focused on identifying promising online and offline media investments for the company to invest in. Within Landmark, we had really developed a conviction that broadband was going to create distribution opportunities for content that has traditionally not been carried by traditional media channels. If you look at Landmark’s history, it’s really one of building media businesses that take advantage of changes in media consumption habits. The company was founded as a newspaper business a hundred years ago, but evolved into broadcast TV ownership and was early in the cable business with The Weather Channel. More recently, the company has made significant investments in leading online businesses. TotalVid was launched to provide broad distribution for video content that traditionally hasn’t penetrated the TV and video rental markets.
Our initial launch included Extreme Sports and Travel, although we’ve added several new categories since then (Anime, Martial Arts Instruction, Home Improvement DIY, Music Instruction and Motorsports). I’ve been a long-time action sports participant and fan. I’ve windsurfed for 18 years. I drove my wife crazy watching the same windsurfing videos over and over again, because the videos were so hard to come by. I even had my TiVo programmed to record anything having to do with windsurfing — it never finds anything. I’ve been a surfer and skier as well, and these markets are similar in that you can’t just pop into Blockbuster and find a good selection of current surf or snow films.
TH: Tell me about Total Vid. What is it? What is your vision for the company?
KQ: TotalVid offers a video download service that allows customers across a wide range of enthusiast categories such as action sports, anime, martial arts and others to view high-quality, full-length videos in categories that are important to them. Our current product is a 7-day download that a consumer can view an unlimited number of times for $1.99 to $3.99. All of our titles have traditionally been sold through specialty retailers for $20-30 each, and because they can’t be found at the video store, we’re finally giving users a way to view these videos at a price-point that encourages more frequent consumption.
We don’t focus on major studio releases. Our belief is that these markets are very well served by the traditional & emerging distribution channels. Our goal is to expand across a large number of enthusiast/hobby categories so that when a consumer comes to TotalVid, they can find a video that speaks to his/her unique interests. Typically, that interest has gone unserved by traditional media channels who’ve focused on categories with broader appeal.
What’s interesting, though, is that when you combine our categories, they collectively represent a huge market. Over 50 million Americans participate in one of the action sports represented on our site. Add travel, home improvement and Anime, and all of a sudden, we have a library that offers something for most broadband users.
TH: Extreme sports seem like a natural place for long tail content. There are so many niche sports. Can you tell me about the ones that you guys are offering and which niche sports that you plan to offer in the future?
KQ: Exactly. We definitely like the action-sports category. There’s so much great content that’s being produced out there in each of the sub-genres. Within action sports, we offer BMX, Inline, Kiteboarding, Mountain Biking, Skate, Ski, Snowboard, Snowmobiling, Surfing, Wake, Windsurfing, Motocross, Off-road, Whitewater and Climbing. When you peel back action sports, you see that it’s not a category in itself, but rather a collection of very unique markets.
As I mentioned, we launched a great martial arts instruction category. We offer street racing videos. Our home improvement, music instruction and travel videos are a great resource for people as well. We’ll enter several new categories this year. Some will be in the action sports category — categories like paintball; and some will be in totally unrelated categories.
TH: At your site people can opt to buy a video tape or DVD of a program or they can also choose to by a VOD downloadable version. Are you able to share with me the percentage breakdown of your volume? Are more people opting for VOD or is DVD still the primary choice for people in purchasing content?
KQ: We do offer both formats, although we have an interesting hybrid approach. One of the benefits of our service is that consumers can try at a low price point before they purchase the full DVD. If you get a download and then purchase the DVD from us, we’ll credit your rental towards the purchase price. Also, if you buy the DVD from us, we give you a permanent download. The benefit there is that you can start watching it right away rather than wait for the DVD to be shipped.
We actually see our users opting for the download option by a significant majority. We also are finding that the vast majority of our DVD buyers are taking advantage of the download that we give them.
TH: One question that I think VOD still needs to grapple with is the broadcast quality of content, particularly as it relates to HDTV. Do you guys offer HDTV downloads or is the bandwidth cost still prohibitive? What would you have to charge to make it economically feasible to offer a program in HDTV quality? What do you see as the future for high quality VOD content? I would think that with extreme sports especially that the oohs and ahhs of HDTV would be especially compelling. Also can anything be done with peer to peer to cut down the cost of distributing HDTV quality content?
KQ: Good question. There’s definitely a cost increase associated with delivering true HD content, but I think as bandwidth costs continue to drop, that will become less of an issue. Currently, a bigger issue is the amount of time it takes a user to download a HD file. Having to wait 2-3 hours for a video to download detracts from the on-demand nature of the experience. Again, this will change too as broadband providers like Comcast, with whom we have a partnership, continue to ratchet up their download speeds. As long as consumers are viewing the content on a computer screen, the current bitrates work quite well. However, as more consumers push video content from their PC to the living room, we’ll all have to adapt by offering higher-quality
TH: Are you able to share with me the economics of your content? There is obviously a split between you guys and the content creators. How does that work? Is there some kind of revenue sharing agreement? How does your affiliate program work?
KQ: We have over 200 producers that we work with across our various categories.
We offer them an attractive revenue share so that as our business grows, they benefit from that growth. It’s a pretty easy process. They send us their videos and we send them checks every quarter. Because most of these creators aren’t in the rental market today, we’re bringing them incremental revenue. We’re really getting some great results for some of these producers.
We have an affiliate program for publishers/partners that allows them to earn a commission on sales that they drive through our site.
TH: What about advertising revenue. Do you guys put advertising in your content or can you to offer lower cost versions of some of your programming?
KQ: At this point, we’re focused on a user-paid model as opposed to an ad-supported one. For long-form content such as ours, ads just don’t make that much sense when you consider that the ad revenue you could derive from a video wouldn’t even cover the bandwidth costs, much less provide a meaningful payment to the content creator.
TH: It looks like you guys have agreements in place with Microsoft and
Akimbo. I know that you guys are available through Akimbo now. When will you be available through the Microsoft’s Media Center Edition platform? Do you have any plans to offer your content through TiVo? What about cable or satellite VOD? Can you get Total Vid on Comcast right now?
KQ: That’s right. We’re working with Microsoft to become more integrated in the MCE platform, which we think is a great fit with our content. We’re talking to a number of partners about incorporating our growing library into their offerings as well. Because our content is so compelling, yet hard to find through traditional channels, we really are a natural partner for companies like TiVo and others who are looking to bring internet-delivered video into the living room. To this point, our discussions with the cable operators have been limited to the internet side. Our library is a great extension of their VOD offerings–it complements rather than competes with what they offer through their digital offering.
TH: What would it take to have more niche mainstream sports on a VOD basis? Do you ever see a day for instance when you can see your grandson’s Little League game or your old high school alma mater play their rival via VOD? What are the barriers to getting more mainstream sports on a VOD basis and how important is it that mainstream sports be broadcast live?
KQ: Internet VOD definitely changes the distribution economics in a way that enables content to be produced that appeals to very narrow audiences. Generally, sporting events, I believe, will be viewed primarily in real-time. Most sporting events are far more compelling to view when you don’t know the outcome already. There are certain types of sporting events, however, that also carry some sentimental value that people would pay for on a VOD basis.
TH: What other non-sports content would make for good VOD internet TV? I know you guys are doing Anime animation as well. Where are the other sweet spots of the long tail?
KQ: Well, we see a ton of potential out there. Certainly, we’re in a number of categories outside sports (travel, anime, music, home improvement). Think of what people get passionate about and there’s probably an underserved market waiting for video to be made available in a convenient, download format like the one that TotalVid offers. You could imagine foreign language programming for people living outside their home country. Videos for auto enthusiasts….new parents….brides….these are the kinds of things you’re likely to see on TotalVid as we expand to new categories.
TH: Thanks for taking the time to do the interview Karl!