Can Loyalty Balance the Unit Economy?

September 8 2020

Do niche services have a role to play in the streaming wars, or are they a musket in a battle of machine guns?

Heavyweight streaming services like Netflix, Peacock and Amazon are fighting for supremacy with broad, everything-for-everyone models.

Niche streaming services, by contrast, focus on a specific type of content for a specific audience. They pride themselves on being able to curate viewers' experiences with shows and movies they might not otherwise find. They often highlight their service's authenticity, efficiency and focus as competitive advantages. But as the behemoths spend big and increasingly expand their content libraries, is curation and community enough to survive?

However, niche streaming service have cracked something the big players have not been able to, attracting and maintaining high-quality subscribers. By providing content for a group of neglected viewers and offering a subscription model instead of an advertising model, the niche platforms have the highest-paid subscriber ratio as well as renewal rate in the industry.

However, the question remains, is niche streaming profitable? Regardless of the subscriber base, the cost of content acquisition is the same. Niche streaming platforms might have a stickier base, but with only a few million subscribers, will they be profitable?

The outliers are the niche platforms that are subsidiaries of big media companies such as Crunchyroll (of WarnerMedia), allowing them to have niche loyalty as well as the deep pocket cash to create high-quality exclusive content.

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Niche Streaming Startups:

Founded in 2006, Crunchyroll is currently headed by general manager Joanne Waage. Earlier this year, Crunchyroll announced its inaugural slate of originals, with 12 total series announced to date. The first two originals “Tower of God,” a Crunchyroll and Webtoon Production, and “The God of High School,” both set new viewership records on platform, according to Otter Media.

CuriosityStream is a factual media and entertainment company that offers video programming including documentaries, TV shows, and short-form video content to subscribers. It was launched in 2015 by the founder of the Discovery Channel, John S. Hendricks.

Pluto TV is a streaming service, but it stands out thanks to more than 200 channels you can watch entirely for free. You can find everything from the All Day Anime channel to non-stop wrestling thanks to Impact! Wrestling. Pluto TV is available for download from most major app stores and comes built-in on many smart TVs. Basically, anywhere you can download streaming apps, you can find Pluto TV—and more channels than you know what to do with. There’s even a channel offering nothing more than cute animal videos, all day, every day.

A potential Bumble IPO could bring a new swarm of interest to Match Group

Whether Bumble can turn investors’ heads likely has less to do with what it could print in a public offering filing and more to do with the pace at which it manages to grow over time.
[Read more].

Juul Shelves Plan for Feature That Counts Puffs

E-cigarette maker Juul Labs Inc., facing budget cuts and regulatory scrutiny, has shelved the development of a puff-counting feature that some company employees say had the potential to help users wean themselves off nicotine. [Read more].

Since last week, PrivCo has added:
634 Companies | 74 M&A Deals | 289 Funding Activities

Funding & Deal Highlights:

Legion, an artificial intelligence-driven platform for workplace management, raises a $22M Series B round led by Stripes, with participation from Workday Ventures and others. Legion is designed to help employers better manage their hourly workforces by automating certain decisions, like how much labor to deploy to meet the needs of the company and when to schedule workers.

Bangalore-based online learning startup Unacademy announces it has raised $150M in a new financing round that values the Facebook-backed firm at $1.45B (post-money). SoftBank Group — through its Vision Fund 2 — led Unacademy’s Series F financing round, while existing investors Facebook, Blume Ventures, Nexus Partners, General Atlantic and Sequoia Capital participated in it. The new deal pushes four-and-a-half-year-old Unacademy’s to-date raise to about $350M.

Boundless Immigration, an organization that empowers families to navigate the immigration system more confidently, rapidly and affordably, announces the acquisition of RapidVisa. The deal will allow Boundless Immigration to help thousands of additional immigrants each year and improve organizational efficiencies.

Canadian trucking and logistics firm Mullen Group acquires Pacific Coast Express Limited, a cross-border less-than-truckload carrier-based near Vancouver, British Columbia. Alberta-based Mullen purchased the outstanding 60% of shares in Pacific Coast Express (PCX) in a transaction that closed on Monday. Mullen bought a minority stake in PCX in 2018.

U.S.-based global insurance broker Hub International Limited acquires Elevate Insurance Brokers, a property/casualty independent insurance agency based in Grande Prairie, Alberta, Canada.

World Insurance Associates LLC acquires Advantage Benefit Concepts Inc. of Blackwood, N.J., on April 1, 2020. Terms of the transaction were not disclosed. Advantage Benefit Concepts Inc. specializes in employee benefit services. They provide health and dental insurance packages in addition to insurance solutions for individuals.

Jones Industrial Holdings, Inc., the parent company of Universal Plant Services and its affiliates, announces that funds managed by Oaktree Capital Management, LP, a leader among global investment managers, have completed a non-controlling investment in JIH. The proceeds were used to purchase a minority investment previously held by MML Capital Partners and to provide the Company with capital for further growth. Additional terms of the transaction were not disclosed.

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