JTS.tv founded a new network that offers original, online-only television programming exclusively through subscriptions. CEO Carter Mason spoke to us about how the site is curating original content through exclusive and semi-exclusive licensing deals and converting 80% of trial takers to paying subscribers.
Company Profile
Founded: Feb. 14, 2012
Employees: 4 executive members. No one is currently salaried, but one is getting paid in equity.
Business Model: Subscription-only
Paying Subscribers: Undisclosed
Location: Los Angeles, CA
Website: www.jts.tv
Target Market
JTS.tv targets 25- to 45-years old men and women (though they have more male subscribers). The site’s users are usually “cord-cutters” looking for “Smart TV,” or Internet-based, options (i.e., Roku, Samsung, etc.).
Content
JTS stands for “Just the Story,” and thus, the site primarily curates original, professionally-produced online-only short-form television shows. The site is modeled after HBO and Showtime, carefully selecting shows to be aired without commercials.
Most of the shows are 5 to 10 minutes long scripted fiction — usually in the comedy, crime or sci-fi genre — and feature mostly unknown but professional actors. There’s no reality or non-fiction/documentary type shows. The site currently hosts about 20 shows, and adds one new item (i.e. episode) per business day each week. It also adds one short film per week, usually in the same genre as the television shows, but around 15 minutes in length.
Site visitors can view a preview episode of any show for free, but must pay to see any subsequent episodes. Shows are able to be screened on multiple devices and platforms including desktop/laptop computers, mobile devices, tablets and set-top HD televisions.
The site is pay-worthy because it has content people want to see that is not available on any other platform commercial-free (some shows are available on other sites, but have advertising — see below for more on the site’s licensing deals). There is no user-generated or user-uploaded content.
Based in LA, the site has in roads with a lot of independent television producers and associations. Therefore, they receive a hefty number of submissions. Of these submissions, about 95% are rejected. Chosen selections usually have two things in common — high production quality and a quality story. JTS.tv does not cater to any one genre, but they look for quality shows across genres. The goal is “if someone walks into a room and our shows are playing, he/she would just assume you’re watching regular TV, not a Web show.”
If a show is in production and only has a pilot ready, JTS.tv usually has a relationship with the creator and will know the full story and number of episodes before airing an episode. Most of their contracts require five to six episodes at minimum, but each project is looked at individually, in order to best meet the needs of the producer and JTS.tv.
The site has two types of licensing deals — exclusive and limited exclusive. Exclusive deals give JTS.tv the exclusive rights to air a show (such as their shows Bullets and Blue Movies). Limited exclusive contracts lets the content creators sell the show to other online networks, but JTS.tv is the only place where the show is aired without commercials (for example, Asylum just got a deal with Hulu, but will have ads).
Most of the new shows the site picks up are exclusive for a period of six months; after that time the show is free to syndicate to other networks/sites.
In order to protect copyright, the site is hosted on a secure video hosting server and uses expiring URLs so that even if someone finds a way to steal a URL to a direct video, it won’t last very long.
Revenue Streams
JTS.tv is 100% subscription-based. Interestingly, the site makes it known that they split all revenues 50/50 with the content creators. In addition, 25% of the site’s 50% cut goes into marketing and “getting the word out about our shows and the independent television movement.”
There are two subscription plans available to subscribers:
- Monthly for $3.99
- Annual for $39.99
Of those two plans, about 85% of subscribers take the monthly plan, and 15% take the annual plan.
The site has not conducted A/B price testing, but it did have a July 4th promotion offering the annual subscription for 50% off. Mason said this didn’t increase their subscription take-rate much since prospects who see JTS.tv as too expensive are “usually too cheap to pay for TV at all.”
The site is currently looking for VC funding in order to experiment with offering genre-based channels — like comedy, soap opera, horror –and then price-testing what subscribers will pay for putting together what channels they want.
Marketing Tactics
JTS.tv gets most of its new site traffic through affiliates. It also uses social media and word-of-mouth tactics, strategic partnerships, and some PR.
Affiliate Marketing
Some JTS.tv shows are available on other Internet networks, but with ads. JTS.tv does not get a cut of these advertising dollars, but each episode has a link to JTS.tv and the site will pay affiliates to promote these shows on their network. The site has its own system for affiliate management system and will pay $4 to any affiliate for an annual subscription or a monthly subscriber who stays for three months.
JTS.tv is also in the process of developing a player that will let people embed preview episodes in articles. If affiliates use this player, the URL will be embedded with the affiliate code, so this may also serve as a way for affiliates to promote the site’s shows.
Social Media and Word-of-Mouth
Site visitors and subscribers can “share” any episode of a show through Facebook, Twitter, LinkedIn, Google+ or StumbleUpon — in front of or behind the paywall, although only subscribers will be able to view the content behind the paywall. Each episode’s viewing page also serves as a paywall (see screenshot below). There’s a call to sign up for a free trial right below the video, and then the show’s title, the episode title, a synopsis, and credits precede two buttons — one for a monthly subscription and one for an annual subscription. In addition, testimonials and a listing of the site’s other shows are displayed in the right-hand column.
The site also has Facebook and Twitter accounts, which converted well in the beginning but is now being used more for brand awareness. However, social media blasts about preview episodes can still get the site new subscribers.
Lastly, each email the site sends has a “share this email” link to help spread the word.
Strategic Partnership
Roku gave JTS.tv four Roku boxes, which the site distributed at the shows like the New Media Vault (an event attended by about 500-600 people in new media business). The giveaway helped brand the site with Roku in the mind of content creators, which is beneficial since Roku has a good name in the Internet media world. Roku also promotes JTS.tv to its 3 million users as a “featured” channel and has banner ads running promoting the site’s shows and films to all Roku users. The site has several million impressions through these banner ads, which tend to have a higher conversion rate than banner ads on websites or Tivo because the ads advertise channels and shows available exclusively on Roku.
PR
The site just hired a PR director and since there is a lot of media interest in new media and video general. The site is pushing that its model means people don’t have to be bothered by ads and don’t have to pay cable fees.
Conversion Tactics
The site does not require email registration, but it does offer a free 3-day trial, which requires a credit card number. The site converts about 1-3% of site visitors into trial-takers. It also has a very clear cancellation policy (see below).
The site’s conversion rate on trial-to-paying-subscriber is about 80% (i.e., 20% of trial-takers cancel). Members are converted by being taken to a page immediately after they sign up offering recommendations. Also, the marketing copy pushes the fact that these shows can’t exist without subscribers. Mason says that sometimes they get people who sign-up and watch an entire season of a show in three days and then cancel, but other shows available on the site sometimes seduce early cancels to stay longer.
Retention Tactics
The site’s best retention tactic is to continue adding not simply new shows, but also continuing seasons and episodes of favorite shows. In addition, the site continually receives and broadcasts user testimonials, which helps recommend other shows to subscribers.
About Carter Mason
Carter Mason was a content creator himself and is intimately acquainted with how difficult it can be for independent television producers to monetize their creations. With most ad-based Internet viewing, few people want to watch a 30-second spot for a 5-minute show, and therefore, new shows are not sampled; people prefer to watch what’s recommended to them. In addition, ad revenues on short-form shows are rarely profitable — 30 second spots for 5-minute shows means the show can’t have multiple advertisers. Plus, digital ads are still not commanding the prices that broadcast ads do.
He started pitching to sponsors and brands, but then the brands have some creative control. He eventually realized that a subscription model was best way for independent television to deliver a high-quality product.
“The reason HBO and Showtime clean up at the Emmys is because their only question is ‘How do we make this show the best show possible?’ When they are looking at renewing a show, they’ll look at buzz not how many views; they’re willing to take longer-term bet.”
His advice for other paid content sites is to adopt the same model JTS.tv is using. “I think we need more channels like us for it to be a viable model. But people want to pay for content they want — they don’t want to pay for content they don’t want. That’s why there are ‘cable cutters.’ We’re a little ahead of the curve, but there will be a day when Smart TV is more popular with Roku, Samsung and other boxes.”
Vendors and Technology
Hosting — Amazon for video content
http://aws.amazon.com/digital-marketing/
Streaming — Amazon CloudFront
http://aws.amazon.com/cloudfront/
Payment processing — Authorize.net and PayPal
Visa, MasterCard, American Express and Discover
http://www.authorize.net/
https://www.paypal.com/
Email management — MailChimp
http://mailchimp.com/
Web design & development –Independent contractors and in-house
Content management — WordPress with Digital Access Pass powering the subscription site
http://wordpress.org/
http://digitalaccesspass.com/
Content creation–Submission-based
Analytics — Google Analytics
http://www.google.com/analytics/
Subscription Site Insider Analysis
JTS.tv is a great example of how independent television, for the first time, has a viable platform on which to thrive. The Internet makes content curation more important and subscription revenues more possible. We especially like how the site has launched with a clear paywall, trial offer with credit card, and a profit-sharing structure that also makes great marketing copy!
We suggest the site begin A/B testing as soon as possible, especially its trial sign-up form, which really needs to get rid of the “reset” button and put some snazzy color and copy on the submit button. Also the site should A/B test their paywall in order to get it ready and optimized for a viral phenomenon. With Google, Apple, Hulu and Netflix now all supporting original online-only television, competition in this niche is astronomical and well-funded, but one break-out hit can put JTS.tv in a good position to either hold their own or get acquired by one of the big boys.
JTS.tv should also invest in some more SEO tactics and maybe some PPC ads. It should get off Authorize.net and use a major processor like Chase Payment Tech or Litle, which will cut down the site’s processing fees and allow it to use the Account Updater service provided by MasterCard and Visa. JTS.tv may also want to conduct some price testing; while $39.99/year is a discount from $3.99/month for a year, we suspect that a more clear discount — like $19.00 — would convert more subscribers into annual subscriptions. Like Hulu, the site should get a recommendation engine in order to recommend new shows to existing subscribers based on viewing preferences. And like Amazon, JTS.tv should offer a space for subscribers to write reviews of shows. And finally, while JTS.tv’s marketing copy and PR activities center around the lack of ads, it would be more user-centric for the site to push the face that this is original programming not available elsewhere. Television fans don’t watch a show because there are no ads — they watch a show because they like the show.
