This has not been a good month for streaming video-on-demand subscription services. First, Comic-Con HQ, now Fullscreen. On November 3, we reported that Lionsgate was bailing on the Comic-Con HQ SVOD app, just 18 months in. On Monday, Fullscreen founder and CEO George Strompolos announced he would shut down his subscription service in January. The service launched in April 2016, reported Tubefilter. Their launch date was just a month before Comic-Con HQ’s beta test.
‘Decisions like this are tough, but I’m extremely proud of what we accomplished,’ Strompolos said on Medium.
Here’s an excerpt from Strompolos’s employee email, which he shared on Medium:
‘When we set out to launch our own SVOD service, we knew it would be a huge challenge. We wanted to provide a new platform for the breakthrough creators, personalities and storytellers of social entertainment – and the fans who love them.
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A lot went right. Our talented team built and launched a best-in-class OTT product experience from scratch. We created bold, first-of-its-kind original programming that resonated with young fans. Millions downloaded our app and hundreds of thousands became paying subscribers.
Despite our momentum, we’ve made the difficult decision to shut down the Fullscreen SVOD service in January 2018. We came to the conclusion that funding SVOD?-?a longer-term investment?-?was limiting our ability to invest in our dynamic Creator, Brand, and Rooster Teeth divisions that have more established scale and immediate impact. I shared this news in person with the core SVOD team earlier today,’ Strompolos wrote.
Geared toward a teen audience, Fullscreen offers originals like Jay Versace Is Stuck in the 90s, The Skeptic’s Guide to Wellness with Jaclyn Glenn and Prank Me with Corey Fogelmanis, weekly talk shows like Not Too Deep with Grace Helbig and Apologies in Advance with Andrea Russett, popular TV shows like Parks and Recreation and How I Met Your Mother, movies including Rudy and Men in Black, video podcasts and other programming, sorted by genre and mood. The subscription service was $5.99 a month after a free trial week. According to the Hollywood Reporter, Fullscreen will stream its last show this Friday and either sell or shelve its other shows.
What’s next? Strompolos said that the company would ‘double-down on its mission to empower creators and bring brands closer to fans.’ They would leverage the technology they’ve developed and build new brands and content. He promised to share details with staff in a December meeting.
In August, Seeso, another niche streaming video-on-demand service, shut down as well. This all-you-can-watch OTT comedy channel launched in January 2016 by NBCUniversal, offering Seeso originals, animated and live-action comedy and other shows. According to The Verge, the service had been in trouble for a while.
Why aren’t these niche OTT providers making it? There are likely a variety of factors at play here, but the primary reasons for their failure are probably significant competition and the high cost of content acquisition and development. It takes millions of subscribers for a sustained period of time to break even, let alone profit in such a competitive marketplace. Netflix has been at this longer than anyone else, so it has an established market and success formula. Newer players like Amazon Prime Video and Hulu have big financial backing to support their original programming and content acquisitions.
There are two niche services that stand out as sustainably successful – CBS All Access with its popular current and classic TV series and original programming (Star Trek: Discovery and The Good Fight), and WWE Network which has exclusive content and a built-in audience in wrestling fans all over the world. Each of these subscription services has provided a great user experience and exclusive content at a price point fans are willing to pay. If niche services want to do OTT right, they would be smart to adopt some of the best practices of these two OTT stars.