In a world of ever-expanding options for consumers seeking OTT content, ad-supported streaming service Xumo has successfully leveraged partnerships with smart TV manufacturers to get into more consumers’ living rooms. And after a year of what Xumo CEO Colin Petrie-Norris calls explosive growth on the platform, the company is looking to expand both into new markets and through new means of distribution.
CED chatted with Petrie-Norris about why Xumo and ad-supported models are gaining traction and what’s next for the 5-and-a-half-year-old company.
Petrie-Norris spent much of his career in advertising, including time at Specific Media, an advertising solution powered by Viant, and led international expansion and managed European business operations for Advertising.com and AOL.
Xumo was born from seeing how awash online advertising was in advanced data targeting, user profiling and behavioral categorization compared to traditional TV, and how those qualities could translate to OTT channels, according to Petrie-Norris.
“The first basic principle behind Xumo was we need to be able to help users find good content and in an easy to access place and began from an advertising side,” Petrie-Norris says. “And now, I believe the case has been proven that ad-supported content can be extremely high quality if it’s delivered in the right format.”
Smart TV integrations
Before you can collect viewer data, you need to get in front of viewers, and much OTT content is relegated to an app store alongside a variety of other options.
“It’s great if you’re a big well-marketed brand like HBO or Sling TV or you have a billion dollar band helping guide users to your app in the app stores,” Petrie-Norris notes. “But there’s an awful lot of high quality video that don’t necessarily have that kind of branding money.”
So instead, Petrie-Norris has spear-headed partnerships with some of the world’s largest smart TV manufacturers that provide access to Xumo’s more than 160 free channels, not through the app store, but plumbed natively into the smart TV OS.
Xumo has partnerships with nine smart TV manufacturers, including its first partner Panasonic, and its largest partner LG, as well as Vizio, Hisense, and Sharp, to name a few. Combined, Petrie-Norris says Xumo is integrated in close to 37 to 40 percent of all smart TVs sold in the U.S. and direct connected TV integrations are now up to 17 million.
On LG TVs, the linear channels, which include content from partners like Film Movement, PGA Tour, Refinery29, NBC Universal, CBSN, A+E Networks, and Cheddar, are embedded right into the tuner of the TV. So when users are surfing local affiliate stations, they can seamlessly move from a tuner-based signal into an IP signal by pressing channel up or down.
“If we were confined in the app store you’d be lucky to get single digit activation of our service, but more than half of the buyers of these TVs use the service and discovery for our brands and our content partners is enormous,” Petrie-Norris says. “Millions of users have seen their channel rather than being stuck in the app store.”
Petrie-Norris says Xumo is unique in that it doesn’t charge any upfront fees for the TV manufacturer to integrate, and that it’s a revenue share model where any consumption that’s driven to the TV is shared back to them as the originator of that traffic.
“So it’s a very positive relationship because we’re both similarly aligned in getting as much exposure of the service to the users and driving as much consumption as possible because we both benefit, as well as the content partners and the advertisers integrated with us,” he explains.
An explosion in growth
Xumo has also recently experienced upsurge in growth, announcing last month that viewership on the platform soared 325 percent over the past year along with a 90 percent increase in user consumption.
Petrie-Norris told CED that the service is seeing users tune in for 50 minutes on average per session.
This is exciting for the company’s partners, he says, who for years have been using social media to distribute videos and were lucky to get 30 seconds to one minute of engagement as a user scrolls through a feed.
“You take those same videos and you curate them using our intelligent logic, put them into a nice well-packaged program format linear channel and make it really easy to find and you don’t have to fish around through an app store, you can just quickly tune in,” Petrie-Norris says, adding that it drives massive engagement per user.
Petrie-Norris says Xumo has seen growth pretty much from the start, but the immense acceleration in the last 12 months has been due to two factors. The first being that consumers now recognize linear, ad-supported streaming content as a viable alternative to other forms of television.
The content and the low ad-loads compared to other types of TV, along with the personalization and curation offered by Xumo, “is suddenly making it resonate with users in a way that it now competes for their attention in the home.”
The second factor, Petrie-Norris says, is the content industry
“Whereas in the early days we were mostly getting digital-only, strong social media brands wanting these 24-hour experiences, we’ve seen right across the spectrum now,” he explains. “From the big traditional media companies to movie studios, to even cable companies seeing the yield metrics they get from the service as being superior to even paid platforms. So the type and nature and quality of the content has improved dramatically.”
Four months ago Xumo launched movies and TV as a new genre, which has since become the second most popular category behind news. Xumo works with close to a dozen movie studios now and offers 14,000 free movies. Petrie-Norris says to expect seeing much more in the way of movies from Xumo in the near future.
Xumo is seeing week over week performance as well. Petrie-Norris notes that earlier this month during a heavy news cycle, the service saw a 22 percent jump in news consumption in one week, much of which is retained the following week.
High utility advertising
To the user, the experience is much like traditional linear TV, Petrie-Norris says, but there are about half of the amount of ads per hour that viewers see on cable TV. However, advertising partners have a suite of tools to select and slice and dice who they want to reach.
“Invisible to the user is the ability of all these advertisers to target,” he says. “They can employ every technique commonly used in digital advertising, but in this big screen 55-inch, beautiful linear experience.”
Xumo partners with companies, like Tenga, who can opt to buy local ads or small campaigns for a local car dealership for example, while some companies look at certain behavioral characteristics.
“So high utility, lots of options available for advertising, you can buy self-service through a programmatic DSP partner or [advertisers] can work with us on big sponsorships,” Petrie-Norris says.
For example, Xumo partnered with Titleist and the PGA tour on a sponsorship that utilized overlays and first ad-in breaks.
Petrie-Norris says what’s good about digital is that it’s also measurable, with partners able to perform attribution and see the effect driving tune-in to their other shows, measure people’s propensity to go to the company’s mobile app following exposure to a show, and even measure through to in-store sales of a product after viewing the service.
He notes that it’s also attractive to content partners who can be live with their own 24-hour channel across 17 million homes in as little as a week. Content partners own and operate their own channel on the service, and are allowed to sell their own advertising.
“We are an enabler of the content industry to get into hard to reach pockets, to get really high exposure and high activations, in a space which has been difficult to navigate up until now.”
Expansion plans
Xumo is also working on expanding its reach. Currently available in the U.S. and Canada, Petrie-Norris said the service will be available in seven new countries by next summer, and is very well positioned for international expansion.
“The beauty of launching internationally is our service is already embedded in the TV, and while not a flick of a switch, it gives us the ability to turn on a new market and get massive penetration through our smart TV partners very quickly,” he notes. “So we can get high amounts of traction for local content partners as well as global content partners that want to deploy around the world.”
Petrie-Norris also hinted at new distribution partners, saying the company is in discussions to be distributed via “a number of IP-friendly” devices.
While Xumo would not comment further as to whether that may mean traditional operator’s set-top boxes, Petrie-Norris says he predicts Xumo will be in more than 40 or 50 million homes by this time next year through deals with “larger companies” looking to integrate the service.
He also points to digital-first brands like Mashable and Tastemade that are putting out quality content and attracting younger viewers, as a unique aspect that’s attractive to partners.
“[Digital-first brands] are not just putting out one minute clips, they’re producing 30-minute specials and highly immersive, very interesting content,” Petrie-Norris says. “And that content, when curated into a linear experience, is extremely attractive to anybody in the distribution game.”