You Want to Cut the Cord, Will You Be Able to Find Compelling Programs For Free? XUMO says YES

The biggest changes in the TV world have to do with how consumers are choosing to get their programming. For decades cable companies grew happy, fat and dumb laying cable and connecting subscribers. Direct broadcast satellite came along to shake things up, and cable fought back when fast internet delivery became the alternative to agonizingly slow telephone dial up. But like the snake eating its tail, that same internet delivery affords consumers myriad choices to cut the cord. Sorry for mixing metaphors, but it is a good introduction to discussing online alternatives like XUMO. I spoke with the company’s CEO, Colin Petrie-Norris about his company’s strategy.

Colin described the “current democratization of TV.” He cites smart TVs as evidence of the streamlined process by which viewers can get what they want, when they want. In the case of XUMO, the consumer has an array of 160 channels across nine genres. But facing a firehose of choices, how does a consumer find the content?Absent a recognizable channel brand, how do you get consumers’ share of mind?

Colin spoke about “deep integration, the ability to infuse channels into the TV, into the operating system.” By partnering with TV manufacturers, the hardware has created an addressable market of millions of viewers. XUMO is currently available on 35% of smart TVs, including models from Hisense, LG, Magnavox, Panasonic, Philips, Sanyo, Sharp and VIZIO.

XUMO is an over-the-top (OTT) service providing premium channels for free, delivered via the internet. He outlined XUMO’s three step approach, enabling the company to reach and impressive 4.5 – 5 million viewers each month:

1. Distribution= via smart TV, Roku or Layer3TV, as well as mobile apps.
2. Content= “resources to build a channel already exist,” asserts Colin, “but with so many channels emerging which could warrant a 24 hour linear channel, we provide consumer exposure in a way that traditional cable companies can’t.” Colin points out that it is hard for a channel without brand awareness to successfully compete in the app store, but XUMO can deliver that programming.
3. Advertising= targeted, therefore fewer ads. XUMO has built an economically viable option, with a lighter ad load for consumer of about 8 minutes per hour. Part of XUMO’s special sauce is to dynamically alter the advertising mix by time and content, and XUMO can tweak ad delivery in real time “allowing consumers to choose and determine the ad load.”

Colin was quite convincing that XUMO is at the intersection of major market forces: programming distribution is provided across screen sizes (from mobile to huge TVs), the content is broad and advertisers are ensured of an environment safer than what scares them away from YouTube programming.

Nascent programmers lean into XUMO heavily, with no holdbacks. “Other companies play more on defense, the larger brands test with XUMO,” reveals Colin. “It is a positive experience for advertisers, we have broad scale reach and we are brand friendly.”

But I was most intrigued at how XUMO assembles the content on a personalized basis. Colin explained that his company’s complicated algorithm assembles the videos into linear streams and into an attractive, familiar schedule grid. When coupled with optimal ad insertion the programming achieves a proper balance, and ends on time as scheduled.

Colin concluded our chat by offering some supporting statistics: the average daily time spent per household is 50 minutes.