Welcome to tech Stuff, a production from iHeartRadio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeart Podcasts and how the tech are you. I am wrapping up my vacation as you listen to this. I am sadly bidding a fond farewell to the Caribbean, unless, of course, hurricanes ruined my trip, which is entirely possible. I'm watching every day as storm systems form out there, so we'll see. But anyway, I am incapable of recording a new episode today. So this episode originally published on May twenty second, twenty twenty three. It is titled Streaming Services that sunk Golly, I'm on a boat and I've decided to run an episode with the words sunk in it. Y'all, just don't be me. Hope you enjoy. So. Back in two thousand and seven, a rent by mail video business made a move that would be a true disruption. We talk about disruptive companies, this was definitely one of them. It had already shaken things up by taking aim at a huge company that had dominated the home video rental market for decades through offering customers the chance to access a huge media library from the comfort of their own homes, albeit they had to wait for titles to make their way through the postal system before they could enjoy them. But now, this upstart company in two thousand and seven had set up a service where, if you can believe it, you could actually connect to a media player through the Internet and watch movies and television shows by streaming them to your device. The upstart company was, of course, Netflix had battled with Blockbuster, which actually had the opportunity to buy Netflix at one point, but walked away from that deal, and Netflix quickly became a big concern for the major studios, which understandably and arguably correctly worried that unless someone took action, Netflix would become a powerful monopoly for prestige media streaming services. I'm not talking about the user generated stuff which you would find on platforms like YouTube, but rather studio produced stuff. Now, at that point, Netflix would have a lot more leverage when negotiating with studios if it was the one and only place where customers could go to watch stuff online, and studios hate when leverage is given to anyone else. See also the Writer's Guild of America Strike. Lots of other streaming services would upear over the next decade and a half. Some of them were the product of collaboration. Hulu initially was I'll talk a little bit about who later on in the episode. Some streaming services launched as an extension of a television or cable channel, so eventually you would get things like Peacock or HBO Max or Disney Plus or Paramount Plus, which draws heavily from CBS, and lots more, including ones that aren't extension of media companies, like things like Amazon Prime Video and Apple TV Plus. There are so many streaming services now that if you subscribed to all of them, you would be probably paying more per month than you would if you went with one of those gargantuan cable TV packages. The landscape is crowded and it's complicated. I mean, sure, if all you consume are Disney films, and let's be honest, the way we're going, pretty soon every movie is going to be a Disney movie because the Mousehouse just gobbles up everything. Well, if that's all you do, then Disney Plus might be all you need. But most of us are likely to find ourselves subscribing to, or at least wanting to subscribe to a few different services to get access to all the stuff we like, and even then we're probably giving up on a couple of things. For example, I think at this point, I have Netflix, I have Amazon Prime, I have Apple TV Plus, I have Disney Plus, I have HBO Max. That might be at oh, I've got Peacock. So like, that's ridiculous, right, I Mean there are ties where I sit there and think, do I really need all these answers? No, I don't need them all, but there are programs that I can only watch through one of those services, and there's not really other alternative. So there I go. Now, the last couple of years have shown us that on the business side, if we go to the other side, yeah, things kind of stink if you're a consumer because they're all these different competing services. But on the other side, things aren't that rosy either. While the consumer struggles with which services they're gonna subscribe to or pass up, the media companies behind the services are trying to carve out a profitable path while also competing with one another. Now, maybe that involves producing new films and shows that are exclusively for the streaming service. Maybe it involves securing licensing for old favorites before a rival can do it, though a lot of that stuff ends up getting sewn up in existing libraries. Maybe it means taking some stuff off the service so that you know you're not paying people who made it over and over the residuals. Cough. David Zaslov does this a lot, cough. The point is, the streaming service business is really, really tough. I mean it's great when you're on a meteoric rise. You know, you launch, people find you, they talk you up. Your subscription rates soar. You're just doing gangbusters. It's growth all the way, baby. But eventually you start to hit a plateau and fewer people are signing up this quarter compared to last quarter, or worse, you might hit a point where you actually see subscriber numbers go down, and that's super bad. Now, maybe you supplement your revenue by showing ads against content. Maybe it's not just subscriptions. Maybe advertisers offer some stuff for you as well. Maybe you give customers options. Maybe they can subscribe it a higher tier and they can get an ad free experience. That's pretty common these days and then if they subscribe it a lower tier, they're spending less per month, but they're also having to sit through ads to watch the content they want. You still have to balance costs with revenue, and if you have to keep producing high quality content to both attract and keep customers, you might find that your profit margins are so thin they only have one side, or maybe even that you're losing money. And if you're seriously unlucky, you might find that you're on borrowed time, that you're losing money, and there's no pathway out of that. You know, the hope is that you scale up to a point where you ultimately are making more money than you're spending, but depending on how the landscape is, that might not even be a possibility. So we're going to take a look at some failed streaming services, ones that made an effort to hang with the cool kids, but ultimately flopped or faded away, as the case may be, and in one case, stopped a month after it had started. Now, I think I'm gonna start with a fairly recent example, one that I talked about a lot as the service launched, faltered, and then flopped. And that's quibi do you remember Quibi. In case you don't, here's the deal. So Jeffrey Katzenberg, who famously founded DreamWorks Animation after he left Walt Disney Studios. That story is a crazy one, by the way, full of like corporate drama, a lot of like like executives being really bitter about each other. Unfortunately, it's the kind of stuff that really blogs in a different kind of podcast. So as much as I would love to gush about it, I'm just gonna leave it here. Anyway, he decided he wanted to create a short form, highly produced video delivery platform aimed at the smartphone market. So you know, like TikTok is a user generated platform, right, But what Katzenberg wanted to do was make a studio produced version of short form video platforms. So instead of it being you know, some kid hitting on a really cool dance or something and then getting virally famous, it would be studios making content and then using this platform to distribute that content. And you could sort of see the logic behind the decision because people are on their phones a lot. They are using their phones more and more to access entertainment, and short form content works well in situations where you might not have the time or desire to sit down to an hour or more of video, so why not create a platform specifically for that kind of audience. Katzenberg founded QUIBI, which kind of stands for quick Bites. He founded it in the summer of twenty eighteen. Originally it had the name new TV, but it would change to QUIBBI a little bit later. In twenty eighteen, he hired Meg Whitman, who was the former CEO of Hewlett Packard, and she became the CEO of Quibi, and Katzenberg and Whitmen very quickly were making the rounds to various studios in an effort to drive up investments for Quibi, and they did. They raised like a billion dollars in the process. So the plan was to get production ramped up in twenty nineteen in preparation for a launch of the actual platform in the spring of twenty twenty. The hope was to create all sorts of different kinds of content across all genres reality, television, comedy, action, everything, and that they would take the form of stuff like short form television episodes, so things that lasted like ten minutes, to films that could be divided into ten minute long chapters, again, all designed to be watched on your mobile device. In fact, they even had this weird morphing technology where you could watch content either in portrait or landscape mode, and your experience of watching that program would depend upon what mode you were using, because you would get different views. Like it was shot with this in mind. It was kind of it was really ambitious, but also kind of odd to make that choice. It almost meant like you had to make two versions of your movie in order to do it so that way, like, if you're watching it in portrait mode, you're not missing some pivotal piece of information way off to the side in the frame, because it wouldn't show up due to the fact that your screen is vertical rather than horizontal. Anyway, they really pushed this, and producing stuff takes a lot of money, right You mentioned that earlier, like it is expensive to make studio level content, highly produced content. Even if you're cutting corners, it's still expensive. And meanwhile, the launch date was getting closer. Now It is impossible for us to say if Quibi would have survived if things had been a little different. Personally, I think Quibi was doomed to fail no matter what, But the decline may have taken a lot longer if things had been very different in twenty twenty, because it seems to me like the mobile focused approach really limited Quibi's usefulness. But maybe it would have held on, and maybe it would have even been a success. I'll never be able to tell, but you know, something major happened in twenty twenty. We had the COVID nineteen pandemic hit and nearly everyone was stuck at home for a long time, so the use case for Quibi was reduced significantly. I mean, here was a product that was intended to go to folks who were looking for some sort of entertainment while they were like on a bus or on a subway or standing in line, you know, doing all the things that they could not do because they were stuck at home. And at home they had access to tons of other entertainment services that were designed to work with their lifestyles. So trying to fit Quibbi in when they were no longer in those use cases it just didn't really catch. Now. At launch, Quibi did see quite a few downloads. I think it hit like number three on the most popular apps for the week that it debuted, but then the following week, those download numbers dropped drastically. Signing up would give you access to Quibi for three months for free, and after that you were supposed to pay for a subscription. So about three quarters of Quibi's users just opted to bounce off the service rather than convert to a paid subscription once their free trial was up. So the company attempted to bail water out of the sinking boat, but six months after going live, the writing was on the wall, so in mid October twenty twenty, the Wall Street Journal reported that Quibi was on the way out, and by December of twenty twenty, the lights had gone off in Quibi. Roku ended up purchasing Quibi's library, and thankfully creators retained the rights to their intellectual property, which gave them the chance to find some other platform to host their work. We're going to talk about a different company later here, where it's like the opposite of that to an extreme. But yeah, Quibi came and went so fast it didn't even say goodbye. Now there's a lot more we're going to talk about today with various failed streaming services, But before we get into all of that, so that we don't fail. Let's take a quick break to thank our sponsors. So yeah, Quibi. There were some major players in entertainment behind the scenes, both directly working for Quibi and also investing into the company. But our next example was an actual extension of a truly massive media conglomerate. So NBC Universal, which itself is a branch of Comcast, decided to dip its corporate tow in the subscription based video on demand service back in twenty fifteen. So a media executive named Evan Shapiro led the charge, and the goal was to create a video service centered around comedy. So the question was could yuck yucks bring in the buck bucks. The service would be called CISO, and it launched to a small beta test in December twenty fifteen, but the actual service went live in early twenty sixteen. Shapiro spared no expense when it came to curating content for the service. He wanted all things comedy, including older material like episodes of Monty Python's Flying Circus or the Great Sketch show The Kids in the Hall. That Saturday Night Live library was part of it. Remember this was an extension of NBC Universal. He also initially had eyes on making CISO the exclusive platform to stream episodes of the Office and Parks in rec Those plans would ultimately fall through, not Shapiro's fault, really, but it was a part of his plan where he thought, if we can do this, then that's going to attract a huge base of users. He made licensing deals left, right and center. He brought in a ton of popular comedy under one roof, and he also empowered his staff to produce original content for the platform as well. NBC Universal was kind of using CISO as a sort of experiment mental platform, the idea of being that if a comedy centric video on demand service and over the top streaming service, if that could work well, then NBC Universal might launch other genre or interest specific streaming platforms in the future, like maybe one based around horror. Universal famously has a really deep horror library that they keep trying to exploit in the modern era and often failed to do so, or maybe like a streaming service that's really focused on things like reality television programming, which arguably can be scarier and more disturbing than horror is. The cisow subscription was just three dollars ninety nine cents per month, when it launched. The initial catalog was heavy on stuff that comedy fans were likely to gravitate toward, including a sizable library of British comedy that could actually be a little tricky to access here in the United States outside of some notable exceptions like everyone's heard of Bonty Python's Flying Circus. But there are a lot of other British comedies that the average American may not be familiar with. Some of them are really famous. I mean, like some you might have encountered on other channels like Adult Swim showed The Mighty Boosh for a while, which is a bizarre, absurd comedy series. And then there were some sketch comedies, like one of my favorites was that Mitchell and Weblook, which Netflix carried briefly and then it became unaccessible to an American public. I finally ended up breaking down and buying the British DVDs and a region free DVD player so I could find I could watch them again. But anyway, the goal of CISO was to create original content. That was the long term goal, to make its own content that would build its own following, much like Netflix had done with things like Orangees of the New Black and A House of Cards and Stranger Things. Now every streaming services is following that same kind of philosophy. So you use the library to first attract your ground base of subscribers, and then you create original content to attract new ones and to keep everybody there. Now, one early mistake that the executives made over at SISO, though according to Shapiro, was actually folks higher up at NBC Universal that made this mistake, was to flinch at a deal that would have made CISO the exclusive streaming home for the Office. As I mentioned earlier, so Netflix was really interested in having access to the Office. They really, really really wanted it, and the plan was originally that CISO was going to get the exclusive deal. But Netflix made NBC Universal executives an offer they couldn't refuse, and they agreed to let Netflix get access to those programs, which meant SISO would not have that exclusivity. And even if SISO were to show episodes of the Office, the fact that you could already get it on Netflix and a lot of people were already Netflix subscribers meant you weren't going to lure Netflix users to SISO, just based on the office, so one of the things that possibly could have brought over a larger base of subscribers fell through. On the flip side, it also meant that Ciso had some budget freed up for making original content. Now apparently, Shapiro initially was told that NBC Universal was going to have this enormous marketing campaign to promote Ciso, like a ten million dollar effort to highlight the service across the company's various networks, But that really didn't manifest and Ciso received relatively little marketing support, which not surprisingly meant that subscription numbers were lackluster. I mean, it's hard to get excited about subscribing to a service if you've never heard of it, or if the promotion you see doesn't really talk it up enough. Making matters worse is that Ciso had its own video player that occasionally had technical issues and wasn't compatible with some of the hardware consumers used to access streaming content. So again, let's contrast this with Netflix. Netflix had made a decision a long time ago to pretty much make sure it was anywhere where there's a screen. Netflix worked to create apps that were compatible with video game consoles with streaming boxes connected to televisions to smart TVs. In fact, like if you have a fridge that has a video screen incorporated in it, there's a chance that there's a Netflix app native for that particular device. But Comcast's approach wasn't as broad a and this is kind of a pun a spectrum as what Netflix was taking now. CISO did end up joining Amazon's streaming partners program in mid twenty sixteen. That helped a little. By the end of twenty sixteen, it was finally compatible with Apple TV. But you know, this was like a full year in operation when these things started to click into place. While CISO failed to take off to the moon, it did grow in its second year, so in twenty seventeen it began an upward trajectory for subscriber growth. The famous podcast My Brother, My Brother, and Me launched a television show on the network in twenty seventeen. They often joke about how the CISO platform subsequently died on their podcast a lot, But while they make jokes about it, their show was not likely to have been a contributing factor to ciso's demise. The service was spending a lot more money than it was bringing in and Arguably this was necessary in order to scale to a level that could compete with bigger, more established services like Netflix, But a prestige show on cso called There's Johnny About Johnny Carson may have been the straw that broke NBC Universal's back. It was an expensive show to produce and with the numbers headed in the wrong direction, At least for the higher ups at NBC Universal. It meant Evan Shapiro got his walk in papers in May twenty seventeen. CISO kept on going for a little bit, but it didn't last long. A couple of months after Shapiro had left, SISO announced it would be shutting down by the end of the year, and it didn't even make it that far. It actually went dark in mid November twenty seventeen. Ciso's failure is complicated. It probably relates to a lot of different factors. One is that it didn't get the marketing push it needed from its parent company, a less an NBC Universal appears to have learned because you can't turn around without running into a promo for Peacock these days, so they've definitely changed their tune on that. But for another SISO failed to explore ad supported options, which potentially could have brought in revenue to help offset the costs. Third, some of the moves to produce original content might have been a bit too ambitious so early on, Like it's really good to have the goal to create prestige content, but it's possible that the service needed the ground to be a touch more firm before trying to create something like There's Johnny. This is no shade on There's Johnny. I'm not saying that that was a bad series by far, just that it was. It was a big risk considering how much it costs, and maybe the wise move would have been to hold off just a bit longer to try and establish a standing before going into it. It's hard to say, like these things in hindsight, it's really easy to say one way or the other. But at the time, I'm sure these decisions were not easy ones. Some of the content that was on CISO would end up going to other platforms, including another one then no longer exists VRV or VERVE. So the history of VRV or I'm just gonna call it VERV why not. The history of VERV is also pretty short. So for one thing, it launched in late twenty sixteen, so CISO was wrapping up its first year in twenty sixteen. That's when Verve launched, and it was sort of a sister service to the anime focused streaming platform called crunchy Roll. Crunchy Role still exists. Verv was kind of a similar streaming service, but Crunchy Role focused on anime. Verve would end up getting lots of different content from all sorts of companies. They included companies like Geek and Sundry, which was really a YouTube studios channel. Rooster Teeth was another company that provided content to VERV, and other partners included College Humor, which would subsequently develop its own subscription streaming service called Dropout TV Machinima dot Com, which we will talk about more in a second. So there's a spoiler. We know Maine is not gonna last forever. They were also a partner with VERV. Shutter provided content to verv for a while. Shutter is a horror based company Rifftracks, which is made up of people who used to be part of Mystery Science Theater three thousand. They partnered with VERV while and like crunchy Roll, Verve wasn't over the top streaming service. It contained multiple channels of content, ranging from animation to geeky lifestyle programming to horror. So you could log into the little service, you know, you subscribe to Verve and you could access all this different stuff. So partners joined and dropped out of Verve over the years, so it's actually really hard to talk about what was on Verve because it all depended upon what year it was. So, like I said, at one point you had Shutter as part of Verve, and then Shutter would leave Verve in twenty nineteen. That same year, Nerdiced left Verve, Curiosity, Stream, Geek, and Sundry they all left Verve in twenty nineteen, but others would join the service. So there was this fluctuating list of content that was available throughout its short history. Makes it a little difficult to talk about Verve because it's not like there was a central identity you could easily point out, because it was serving as a distribution platform for lots of different partners, and those partners kept changing. By early twenty twenty two, all those partners were pretty much gone. They had left after the terms of their licensing contracts expired, and in March twenty twenty two, word got out that verv was going to cease to exist to be its own thing, it would merge with crunchy Roll. The Verve app went dark just a couple of weeks before I recorded this episode on May eighth, twenty twenty three. So even the backup plan needed a backup plan, And this really shows how challenging it could be to run a streaming service successfully. Now, a lot of partners I mentioned they still have their own platforms. Many of them are part of much larger companies. So even though Verve doesn't exist anymore, some of a lot of the partners that worked with verv, they do still exist in one form or another. So, for example, rooster Teeth, which initially launched as a sort of independent content company, is today part of Warner Brothers Discovery Shutter, the horror themed over the top streaming services owned by ABC Networks, and it can also be accessed not just through its own app, but also through Amazon Video. So there are different places you can find this content. You just can't go to one central location and find it all there anymore, which is part of the problem. Right. It's a big challenge we consumers face is that we might hear about something we're interested in. Just figuring out where the heck you can get hold of that content can be a huge headache. Figuring out, Hey, do I actually subscribe to the service that runs this thing or am I going to have to subscribe to something else? All Right, we're going to take another quick break. When we come back, I've got some more failed streaming platforms to talk about. We're back, And as I said, I had mentioned Machinema earlier. By that, I mean machinima dot com. It has also ceased to be It operated for about twenty years before it went away, and it's a fascinating story all by itself. And I'm going to give a very brief one. I could do a full episode about Machinima dot com because holy cow, there's a lot to talk about, both from a tech side and from a business side, and really a talent side as well. Uh. It launched a ton of different shows, including one that I still followed today, though you could argue that the show I followed today is very different from the show as it originated back in the Maschionama days. But but Machinima is a portmanteau of machine and cinema, or sometimes machine and anime. It typically refers to a type of entertainment where you use computer generated characters, often video game characters, and you use them like digital puppets, and you tell a story, and that includes stories that have nothing to do with the platform you're using, the video game you're using. So in the old days, folks did this just for the fun of it. They used in game tools to cobble together and record short sketches or stories. So typically your camera was provided by someone who is recording their point of view as the story played out, or maybe they were using in game tools to position a virtual camera somewhere in an environment. Rooster Teeth, which I mentioned earlier in this episode, had a monumentally successful show in this genre called Red Versus Blue. They used the Xbox game Halo as the foundation for that show. Anyway, a mashinima creator named Hugh Hancock registered mashinema dot com in two thousand. The site would serve as a place for creators to store and make available their videos two thousand. This was before YouTube. If you created digital video, you had to host that somewhere online. Typically you would host it on a server, and then people would have to navigate to a web page and download the video in order to watch it, because streaming was not really a thing yet. So the website let creators tap into a growing audience for the medium. So there became like this kind of clearing house for machinema based entertainment, so people knew where to go to get it, and then creators had a place to put it so that they didn't have to try and do everything themselves, you know, host the material, market it, get people aware of it, that kind of thing. But hosting media files is expensive, right, especially if people are downloading them. That's a lot of bills you have to pay. So Mashinima was making revenue through an online store, so they would sell various types of merchandise to fans, and they also sold ad space on the site. And Hancock was pretty much responsible for running the whole darn thing for about six years, and in two thousand and six he decided that he needed a rest. That he had been running it and did about as much as he could as a single person, so he sold it to the former operators of a company called Creative Planet. Now not long after that you had the impact of YouTube, And in two thousand and seven, Mashinima established a YouTube channel and began to upload videos to YouTube itself. The company became rather dependent on YouTube actually, both as a place to store videos and to monetize them. Mashinima grew rapidly. It hit one billion monthly video views on YouTube in November twenty eleven. That is an incredible statistic. Mashinima was one of the largest most successful channels on YouTube. I think the only one that was ahead of it was Vivo, the music video channel. It had incredible engagement. People would go to Mashinema and stay there for more than an hour. But the company was also spending money very quickly, and in twenty twelve that caught up with them and they had to make some cutbacks because they were running out of cash. So they laid off more than twenty employees, which doesn't sound like a lot of people, but Mashinima was a lean operation that was like ten percent of all staff at the time. Then there was this expose and this is where I was really talking about how Mashinima was different from Quibi. You know, like Quibi creators, they retained intellectual property rights for their stuff. That wasn't how it was a Machinema. So this expose showed how predatory Mashinima could be. The Dallas Observer published an article that said when creators were signed on with Mashinema, they were agreeing to a lifelong contract that everything they made from that point forward would essentially belong to Mashinema forever. Even if they left the company, Mashinima would retain rights to that and to all the stuff they made afterward. That, y'all, is a bad deal. I mean pulling back the curtain. iHeart owns the rights to text stuff, so if I were ever to part ways with iHeart, I would not be able to take tech stuff with me. It does not belong to me. It belongs to iHeart. However, I could still create my own shows later on, and those would belong to me, because that's reasonable, right. But Mashinima's agreements sounded like something out of a fairy tale, like you belong to me forever. Like Ursula was in charge of the contracts department at Mashinema. The company was growing but also operating at a loss. In twenty fourteen, Warner Brothers invested around fourteen million dollars in the company. Masha got a new CEO in the form of Chad Gutstein, He reorganized the company, He landed some licensing deals with Warner Brothers, and he managed some other deals that have ultimately tempted Warner brook There's even more, and in twenty sixteen, Mashinima accepted a buyout offer for one hundred million smackaroos. So Gutstein joins in twenty fourteen and twenty sixteen, he says, my job here is done, and he leaves because he was essentially leading the company toward this acquisition, and Russell Aerins, who was a Warner Brothers executive, became the new head of Mashinema. By the way, this is also around the same time when AT and T acquired Warner Brothers and formed Warner Media. It is weird to think that it hasn't been that long since AT and T bought Warner Brothers, much less than divested itself of Warner Brothers, where Warner Brothers then merged with Discovery. It's crazy how much has changed in just in less than a decade. It's it's bonkers, all right. So anyway, WarnerMedia reorganized and put Mashinima under a division call Otter Media. This was in December twenty eighteen. Another company that was under Otter Media Rooster Teeth. Well. Then just a few weeks later, on January nineteenth, twenty nineteen, Otter Media wiped all of Mashinima's YouTube videos off the face of the earth, like the whole channel was nuked from orbit. It's the only way to be sure. Every single video was deleted or at least removed from public view. Then, at the beginning of February twenty nineteen, word got out that Otter Media had laid off every single Machinema employee. All eighty plus of them were fired or moved to a different division within Otter Media. So what gets Why was Machinima wiped out like that? Well, the idea was to consolidate digital media offerings in WarnerMedia, so the company owned a whole bunch of different digital media production companies and channels like a bunch, including Rooster Teeth, Full Screen, crunchy Roll. Warner would later sell Crunchy Role to Sony in twenty twenty, and they just wanted to kind of streamline things they felt like there was too much overlap. It probably ended up being for the best, because, as we all know, Discovery would acquire Warner Brothers after AT and T decided that its earlier decision to buy the company was a booboo, and knowing how David zaslovorx I imagined, Mishinima would have been an early candidate for the chopping block in an effort to reduce costs if it had still been a thing. On a similar note, here in Atlanta, we had a company called film Struck. Technically this was a division under Warner Brothers and Turner Classic Movies. The service launched in twenty sixteen with two tiers, so for six dollars ninety nine cents a month, you would have access to a basic digital library of various movies, mostly film classics. But if you coughed up ten dollars ninety nine cents a month, you would also have access to the criterion collection libraries. There's lots of different, highly regarded movies, so the whole concept behind this particular streaming platform was to attract movie lovers who wanted to be able to watch classics and foreign films and independent films the stuff that you often can't find on most streaming platforms. They said, well, here's the solution. We're going to make this platform and you'll be able to access those titles here. The service lasted two whole years and then shut down in twenty eighteen. So why did it shut down? Well, remember how I said AT and T merged with WarnerMedia. Well, part of that process involved slimming down and streamlining things, and film Struck was struck because it was seen as having a limited appeal. It was a niche product, so it didn't last at all due to corporate maneuvers. I mean that was the reason why it died. So if that hadn't happened, if the corporate manu had not been a thing, if giant companies weren't trying to figure out what can we strike from our record books to make this deal look better, then would Film Struck have been a big success. Probably not, but it might have done just fine, especially being supported by a community of film lovers. But we're never gonna know. Also, we had another streaming service launched out of Atlanta that lasted a whole month and then it was a shock when it got shut down. So in this case, and it relates back to Warner again. I'm talking about CNN Plus, the subscription based streaming service related to CNN, but it was going to carry things like documentaries, TV specials, that kind of thing, stuff that goes into much more depth than would be a lot of original programming. The division spit something like three hundred million dollars in building up to the launch, because, as I mentioned, this sort of production ain't cheap. Throughout twenty twenty one, it was gearing up for this event. It actually launched on March twenty ninth, twenty twenty two, and it didn't immediately crush it. It's not like they suddenly were overwhelmed by subscribers, but you know, they had just gotten started. But by the following month it got shut down. So again this would be because of David the Grim Reaper Zaslov because CNN was part of Warner Brothers. Discovery merged with Warner Brothers after AT and T bounced off of that partnership, and Zaslov needed to take a serious swing at cutting costs because both Discovery and Warner Brothers were in some fairly tough times. So once upon a time, this show tech stuff was actually part of Discovery Communications, and David Zaslov was CEO of Discovery and now he's CEO of Warner Brothers Discovery. So I got to see how things operated to a certain extent. It's not like I was in the room where it happens to quote Hamilton, but you know, I was in the company, so I could kind of see what was going on. And the cable business is really tough, similar to streaming. You know, things are great when you're pouring on subscribers. It's a money train at that point, baby, All those monthly fees are pouring in throughout the year, those big carriage deals with cable companies, they're huge and they bring in billions of dollars. However, eventually you hit saturation and it gets a lot harder to grow as a company, and growth is what investors want. So yeah, you could still be making huge amounts of money, but if you're not growing, that's a problem. So Discovery was kind of running up against that. Back when I was there. The company was focusing a lot on establishing a presence in countries where it previously didn't have service, like Central America or South America, and it was because that represented a place where it could actually grow. You couldn't really grow in the United States because the Discovery channel was already on pretty much all the different cable packages it could be on in the US, so you're not really growing there. Once you established your presence in a part of the world that dried up so that you had to go into different It almost becomes like colonization, but through cable channels again, kind of similar to streaming, right, Like, once you reach a saturation point where the people who are likely to subscribe are already subscribed, you don't really grow after that. That's a problem. So anyway, Zasov took a look at CNN Plus's business plan and its performance figures, and he said, well, there's no reason to keep this around. It's super expensive, it's going to take forever for it to reach a point where it might be profitable, and in the meantime, we need to cut billions of dollars off of our costs. So he shut it down after it had been open for a month. Now, there's no denying the service was costing Warner Brothers a lot of money, and that subscribers have exactly gone gaga over it. Plus both Warner Brothers and Discovery also already had their own streaming services, which of course raises the possibility that it could end up competing against itself in the market. You know, maybe one streaming service is a little more expensive than the others, but it doesn't have the number of subscribers that it should because you've kind of already convinced people to go to this other subscription service for less, even though it's a different offering. That's a real issue, right, So the plug got pulled. Now, there are lots of other streaming services that didn't stick around. Like I didn't even touch on Vine, which is another user generated one. We've talked about that one in the past and how Vine was kind of a precursor to Mega hit like TikTok. But yeah, there are other examples, not just the highly produced stuff that I focused on in this episode. Also, a lot of these existing streaming services are headed toward consolidation, right, Like we know that Discovery and HBO Max are becoming Max. That Max is going to be this combination of material. Although from why I understand, Discovery is still going to continue to operate its own independent streaming service because there's a fear that by combining, some of those subscribers will just jump ship because they don't want the max stuff, they don't want to spend more money on content, so they might leave. So I think that both of those are going to continue to exist. We found out not long ago that Disney is merging Hulu and Disney Plus into a single service by the end of this year, and that the Disney Plus subscription, at least for the ad free experience, will also be going up. So yeah, we're still seeing stuff consolidate. We're seeing streaming services merge together because I think all of them have come to the same conclusion that it's clear there's a demand for these services. It's clearer people want them, but it's also clear that there are real challenges to making it a profitable, scalable business while also producing you know, the content that's going to keep people there, because that content is so expensive and it's not like you know, serving ads against stuff. I mean, even though some of these streaming services do serve ads or have opportunities for people to subscribe it an ad supported tier, but there's no like Box Office for these streaming you know, pieces of content. So it's it's harder to get it to monetize properly. You know. It's the old models don't work on the streaming approach, so new models need to be formed. And I think we're still seeing that shake out, which is kind of funny because, like I said, Netflix launched theirs way back in two thousand and seven, not long after YouTube had become a thing. So the fact that we've been around this long with these streaming services and we're still trying to figure out a way of making them, you know, make money at a level where we're gonna get that prestige content, it's really interesting. I don't think it's gonna change. I don't think we're gonna lose these streaming services. We might lose some of them when companies just can't afford to continue the business. But I think that's still like the future of entertainment for at least the near term. But yeah, a lot of stuff's going to have to shake out for it to be sustainable and to be profitable. All Right, that's it for this episode. Like I said, there were a ton of other streaming services, some of which were more about audio streaming rather than video, but there's a lot of others that we could talk about. Maybe I will in future episodes, but I really wanted to focus on these and kind of explore what went wrong. A lot of times it wasn't the fault of the people who were running the program. It was literally because folks above them had to make some tough decisions while there were all these mergers and acquisitions going on. So yeah, tough story, but one that I think is worth examining. I hope you are all doing well, and I will talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.

Welcome to tech Stuff, a production from iHeartRadio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeart Podcasts and how the tech are you. I am wrapping up my vacation as you listen to this. I am sadly bidding a fond farewell to the Caribbean, unless, of course, hurricanes ruined my trip, which is entirely possible. I'm watching every day as storm systems form out there, so we'll see. But anyway, I am incapable of recording a new episode today. So this episode originally published on May twenty second, twenty twenty three. It is titled Streaming Services that sunk Golly, I'm on a boat and I've decided to run an episode with the words sunk in it. Y'all, just don't be me. Hope you enjoy. So. Back in two thousand and seven, a rent by mail video business made a move that would be a true disruption. We talk about disruptive companies, this was definitely one of them. It had already shaken things up by taking aim at a huge company that had dominated the home video rental market for decades through offering customers the chance to access a huge media library from the comfort of their own homes, albeit they had to wait for titles to make their way through the postal system before they could enjoy them. But now, this upstart company in two thousand and seven had set up a service where, if you can believe it, you could actually connect to a media player through the Internet and watch movies and television shows by streaming them to your device. The upstart company was, of course, Netflix had battled with Blockbuster, which actually had the opportunity to buy Netflix at one point, but walked away from that deal, and Netflix quickly became a big concern for the major studios, which understandably and arguably correctly worried that unless someone took action, Netflix would become a powerful monopoly for prestige media streaming services. I'm not talking about the user generated stuff which you would find on platforms like YouTube, but rather studio produced stuff. Now, at that point, Netflix would have a lot more leverage when negotiating with studios if it was the one and only place where customers could go to watch stuff online, and studios hate when leverage is given to anyone else. See also the Writer's Guild of America Strike. Lots of other streaming services would upear over the next decade and a half. Some of them were the product of collaboration. Hulu initially was I'll talk a little bit about who later on in the episode. Some streaming services launched as an extension of a television or cable channel, so eventually you would get things like Peacock or HBO Max or Disney Plus or Paramount Plus, which draws heavily from CBS, and lots more, including ones that aren't extension of media companies, like things like Amazon Prime Video and Apple TV Plus. There are so many streaming services now that if you subscribed to all of them, you would be probably paying more per month than you would if you went with one of those gargantuan cable TV packages. The landscape is crowded and it's complicated. I mean, sure, if all you consume are Disney films, and let's be honest, the way we're going, pretty soon every movie is going to be a Disney movie because the Mousehouse just gobbles up everything. Well, if that's all you do, then Disney Plus might be all you need. But most of us are likely to find ourselves subscribing to, or at least wanting to subscribe to a few different services to get access to all the stuff we like, and even then we're probably giving up on a couple of things. For example, I think at this point, I have Netflix, I have Amazon Prime, I have Apple TV Plus, I have Disney Plus, I have HBO Max. That might be at oh, I've got Peacock. So like, that's ridiculous, right, I Mean there are ties where I sit there and think, do I really need all these answers? No, I don't need them all, but there are programs that I can only watch through one of those services, and there's not really other alternative. So there I go. Now, the last couple of years have shown us that on the business side, if we go to the other side, yeah, things kind of stink if you're a consumer because they're all these different competing services. But on the other side, things aren't that rosy either. While the consumer struggles with which services they're gonna subscribe to or pass up, the media companies behind the services are trying to carve out a profitable path while also competing with one another. Now, maybe that involves producing new films and shows that are exclusively for the streaming service. Maybe it involves securing licensing for old favorites before a rival can do it, though a lot of that stuff ends up getting sewn up in existing libraries. Maybe it means taking some stuff off the service so that you know you're not paying people who made it over and over the residuals. Cough. David Zaslov does this a lot, cough. The point is, the streaming service business is really, really tough. I mean it's great when you're on a meteoric rise. You know, you launch, people find you, they talk you up. Your subscription rates soar. You're just doing gangbusters. It's growth all the way, baby. But eventually you start to hit a plateau and fewer people are signing up this quarter compared to last quarter, or worse, you might hit a point where you actually see subscriber numbers go down, and that's super bad. Now, maybe you supplement your revenue by showing ads against content. Maybe it's not just subscriptions. Maybe advertisers offer some stuff for you as well. Maybe you give customers options. Maybe they can subscribe it a higher tier and they can get an ad free experience. That's pretty common these days and then if they subscribe it a lower tier, they're spending less per month, but they're also having to sit through ads to watch the content they want. You still have to balance costs with revenue, and if you have to keep producing high quality content to both attract and keep customers, you might find that your profit margins are so thin they only have one side, or maybe even that you're losing money. And if you're seriously unlucky, you might find that you're on borrowed time, that you're losing money, and there's no pathway out of that. You know, the hope is that you scale up to a point where you ultimately are making more money than you're spending, but depending on how the landscape is, that might not even be a possibility. So we're going to take a look at some failed streaming services, ones that made an effort to hang with the cool kids, but ultimately flopped or faded away, as the case may be, and in one case, stopped a month after it had started. Now, I think I'm gonna start with a fairly recent example, one that I talked about a lot as the service launched, faltered, and then flopped. And that's quibi do you remember Quibi. In case you don't, here's the deal. So Jeffrey Katzenberg, who famously founded DreamWorks Animation after he left Walt Disney Studios. That story is a crazy one, by the way, full of like corporate drama, a lot of like like executives being really bitter about each other. Unfortunately, it's the kind of stuff that really blogs in a different kind of podcast. So as much as I would love to gush about it, I'm just gonna leave it here. Anyway, he decided he wanted to create a short form, highly produced video delivery platform aimed at the smartphone market. So you know, like TikTok is a user generated platform, right, But what Katzenberg wanted to do was make a studio produced version of short form video platforms. So instead of it being you know, some kid hitting on a really cool dance or something and then getting virally famous, it would be studios making content and then using this platform to distribute that content. And you could sort of see the logic behind the decision because people are on their phones a lot. They are using their phones more and more to access entertainment, and short form content works well in situations where you might not have the time or desire to sit down to an hour or more of video, so why not create a platform specifically for that kind of audience. Katzenberg founded QUIBI, which kind of stands for quick Bites. He founded it in the summer of twenty eighteen. Originally it had the name new TV, but it would change to QUIBBI a little bit later. In twenty eighteen, he hired Meg Whitman, who was the former CEO of Hewlett Packard, and she became the CEO of Quibi, and Katzenberg and Whitmen very quickly were making the rounds to various studios in an effort to drive up investments for Quibi, and they did. They raised like a billion dollars in the process. So the plan was to get production ramped up in twenty nineteen in preparation for a launch of the actual platform in the spring of twenty twenty. The hope was to create all sorts of different kinds of content across all genres reality, television, comedy, action, everything, and that they would take the form of stuff like short form television episodes, so things that lasted like ten minutes, to films that could be divided into ten minute long chapters, again, all designed to be watched on your mobile device. In fact, they even had this weird morphing technology where you could watch content either in portrait or landscape mode, and your experience of watching that program would depend upon what mode you were using, because you would get different views. Like it was shot with this in mind. It was kind of it was really ambitious, but also kind of odd to make that choice. It almost meant like you had to make two versions of your movie in order to do it so that way, like, if you're watching it in portrait mode, you're not missing some pivotal piece of information way off to the side in the frame, because it wouldn't show up due to the fact that your screen is vertical rather than horizontal. Anyway, they really pushed this, and producing stuff takes a lot of money, right You mentioned that earlier, like it is expensive to make studio level content, highly produced content. Even if you're cutting corners, it's still expensive. And meanwhile, the launch date was getting closer. Now It is impossible for us to say if Quibi would have survived if things had been a little different. Personally, I think Quibi was doomed to fail no matter what, But the decline may have taken a lot longer if things had been very different in twenty twenty, because it seems to me like the mobile focused approach really limited Quibi's usefulness. But maybe it would have held on, and maybe it would have even been a success. I'll never be able to tell, but you know, something major happened in twenty twenty. We had the COVID nineteen pandemic hit and nearly everyone was stuck at home for a long time, so the use case for Quibi was reduced significantly. I mean, here was a product that was intended to go to folks who were looking for some sort of entertainment while they were like on a bus or on a subway or standing in line, you know, doing all the things that they could not do because they were stuck at home. And at home they had access to tons of other entertainment services that were designed to work with their lifestyles. So trying to fit Quibbi in when they were no longer in those use cases it just didn't really catch. Now. At launch, Quibi did see quite a few downloads. I think it hit like number three on the most popular apps for the week that it debuted, but then the following week, those download numbers dropped drastically. Signing up would give you access to Quibi for three months for free, and after that you were supposed to pay for a subscription. So about three quarters of Quibi's users just opted to bounce off the service rather than convert to a paid subscription once their free trial was up. So the company attempted to bail water out of the sinking boat, but six months after going live, the writing was on the wall, so in mid October twenty twenty, the Wall Street Journal reported that Quibi was on the way out, and by December of twenty twenty, the lights had gone off in Quibi. Roku ended up purchasing Quibi's library, and thankfully creators retained the rights to their intellectual property, which gave them the chance to find some other platform to host their work. We're going to talk about a different company later here, where it's like the opposite of that to an extreme. But yeah, Quibi came and went so fast it didn't even say goodbye. Now there's a lot more we're going to talk about today with various failed streaming services, But before we get into all of that, so that we don't fail. Let's take a quick break to thank our sponsors. So yeah, Quibi. There were some major players in entertainment behind the scenes, both directly working for Quibi and also investing into the company. But our next example was an actual extension of a truly massive media conglomerate. So NBC Universal, which itself is a branch of Comcast, decided to dip its corporate tow in the subscription based video on demand service back in twenty fifteen. So a media executive named Evan Shapiro led the charge, and the goal was to create a video service centered around comedy. So the question was could yuck yucks bring in the buck bucks. The service would be called CISO, and it launched to a small beta test in December twenty fifteen, but the actual service went live in early twenty sixteen. Shapiro spared no expense when it came to curating content for the service. He wanted all things comedy, including older material like episodes of Monty Python's Flying Circus or the Great Sketch show The Kids in the Hall. That Saturday Night Live library was part of it. Remember this was an extension of NBC Universal. He also initially had eyes on making CISO the exclusive platform to stream episodes of the Office and Parks in rec Those plans would ultimately fall through, not Shapiro's fault, really, but it was a part of his plan where he thought, if we can do this, then that's going to attract a huge base of users. He made licensing deals left, right and center. He brought in a ton of popular comedy under one roof, and he also empowered his staff to produce original content for the platform as well. NBC Universal was kind of using CISO as a sort of experiment mental platform, the idea of being that if a comedy centric video on demand service and over the top streaming service, if that could work well, then NBC Universal might launch other genre or interest specific streaming platforms in the future, like maybe one based around horror. Universal famously has a really deep horror library that they keep trying to exploit in the modern era and often failed to do so, or maybe like a streaming service that's really focused on things like reality television programming, which arguably can be scarier and more disturbing than horror is. The cisow subscription was just three dollars ninety nine cents per month, when it launched. The initial catalog was heavy on stuff that comedy fans were likely to gravitate toward, including a sizable library of British comedy that could actually be a little tricky to access here in the United States outside of some notable exceptions like everyone's heard of Bonty Python's Flying Circus. But there are a lot of other British comedies that the average American may not be familiar with. Some of them are really famous. I mean, like some you might have encountered on other channels like Adult Swim showed The Mighty Boosh for a while, which is a bizarre, absurd comedy series. And then there were some sketch comedies, like one of my favorites was that Mitchell and Weblook, which Netflix carried briefly and then it became unaccessible to an American public. I finally ended up breaking down and buying the British DVDs and a region free DVD player so I could find I could watch them again. But anyway, the goal of CISO was to create original content. That was the long term goal, to make its own content that would build its own following, much like Netflix had done with things like Orangees of the New Black and A House of Cards and Stranger Things. Now every streaming services is following that same kind of philosophy. So you use the library to first attract your ground base of subscribers, and then you create original content to attract new ones and to keep everybody there. Now, one early mistake that the executives made over at SISO, though according to Shapiro, was actually folks higher up at NBC Universal that made this mistake, was to flinch at a deal that would have made CISO the exclusive streaming home for the Office. As I mentioned earlier, so Netflix was really interested in having access to the Office. They really, really really wanted it, and the plan was originally that CISO was going to get the exclusive deal. But Netflix made NBC Universal executives an offer they couldn't refuse, and they agreed to let Netflix get access to those programs, which meant SISO would not have that exclusivity. And even if SISO were to show episodes of the Office, the fact that you could already get it on Netflix and a lot of people were already Netflix subscribers meant you weren't going to lure Netflix users to SISO, just based on the office, so one of the things that possibly could have brought over a larger base of subscribers fell through. On the flip side, it also meant that Ciso had some budget freed up for making original content. Now apparently, Shapiro initially was told that NBC Universal was going to have this enormous marketing campaign to promote Ciso, like a ten million dollar effort to highlight the service across the company's various networks, But that really didn't manifest and Ciso received relatively little marketing support, which not surprisingly meant that subscription numbers were lackluster. I mean, it's hard to get excited about subscribing to a service if you've never heard of it, or if the promotion you see doesn't really talk it up enough. Making matters worse is that Ciso had its own video player that occasionally had technical issues and wasn't compatible with some of the hardware consumers used to access streaming content. So again, let's contrast this with Netflix. Netflix had made a decision a long time ago to pretty much make sure it was anywhere where there's a screen. Netflix worked to create apps that were compatible with video game consoles with streaming boxes connected to televisions to smart TVs. In fact, like if you have a fridge that has a video screen incorporated in it, there's a chance that there's a Netflix app native for that particular device. But Comcast's approach wasn't as broad a and this is kind of a pun a spectrum as what Netflix was taking now. CISO did end up joining Amazon's streaming partners program in mid twenty sixteen. That helped a little. By the end of twenty sixteen, it was finally compatible with Apple TV. But you know, this was like a full year in operation when these things started to click into place. While CISO failed to take off to the moon, it did grow in its second year, so in twenty seventeen it began an upward trajectory for subscriber growth. The famous podcast My Brother, My Brother, and Me launched a television show on the network in twenty seventeen. They often joke about how the CISO platform subsequently died on their podcast a lot, But while they make jokes about it, their show was not likely to have been a contributing factor to ciso's demise. The service was spending a lot more money than it was bringing in and Arguably this was necessary in order to scale to a level that could compete with bigger, more established services like Netflix, But a prestige show on cso called There's Johnny About Johnny Carson may have been the straw that broke NBC Universal's back. It was an expensive show to produce and with the numbers headed in the wrong direction, At least for the higher ups at NBC Universal. It meant Evan Shapiro got his walk in papers in May twenty seventeen. CISO kept on going for a little bit, but it didn't last long. A couple of months after Shapiro had left, SISO announced it would be shutting down by the end of the year, and it didn't even make it that far. It actually went dark in mid November twenty seventeen. Ciso's failure is complicated. It probably relates to a lot of different factors. One is that it didn't get the marketing push it needed from its parent company, a less an NBC Universal appears to have learned because you can't turn around without running into a promo for Peacock these days, so they've definitely changed their tune on that. But for another SISO failed to explore ad supported options, which potentially could have brought in revenue to help offset the costs. Third, some of the moves to produce original content might have been a bit too ambitious so early on, Like it's really good to have the goal to create prestige content, but it's possible that the service needed the ground to be a touch more firm before trying to create something like There's Johnny. This is no shade on There's Johnny. I'm not saying that that was a bad series by far, just that it was. It was a big risk considering how much it costs, and maybe the wise move would have been to hold off just a bit longer to try and establish a standing before going into it. It's hard to say, like these things in hindsight, it's really easy to say one way or the other. But at the time, I'm sure these decisions were not easy ones. Some of the content that was on CISO would end up going to other platforms, including another one then no longer exists VRV or VERVE. So the history of VRV or I'm just gonna call it VERV why not. The history of VERV is also pretty short. So for one thing, it launched in late twenty sixteen, so CISO was wrapping up its first year in twenty sixteen. That's when Verve launched, and it was sort of a sister service to the anime focused streaming platform called crunchy Roll. Crunchy Role still exists. Verv was kind of a similar streaming service, but Crunchy Role focused on anime. Verve would end up getting lots of different content from all sorts of companies. They included companies like Geek and Sundry, which was really a YouTube studios channel. Rooster Teeth was another company that provided content to VERV, and other partners included College Humor, which would subsequently develop its own subscription streaming service called Dropout TV Machinima dot Com, which we will talk about more in a second. So there's a spoiler. We know Maine is not gonna last forever. They were also a partner with VERV. Shutter provided content to verv for a while. Shutter is a horror based company Rifftracks, which is made up of people who used to be part of Mystery Science Theater three thousand. They partnered with VERV while and like crunchy Roll, Verve wasn't over the top streaming service. It contained multiple channels of content, ranging from animation to geeky lifestyle programming to horror. So you could log into the little service, you know, you subscribe to Verve and you could access all this different stuff. So partners joined and dropped out of Verve over the years, so it's actually really hard to talk about what was on Verve because it all depended upon what year it was. So, like I said, at one point you had Shutter as part of Verve, and then Shutter would leave Verve in twenty nineteen. That same year, Nerdiced left Verve, Curiosity, Stream, Geek, and Sundry they all left Verve in twenty nineteen, but others would join the service. So there was this fluctuating list of content that was available throughout its short history. Makes it a little difficult to talk about Verve because it's not like there was a central identity you could easily point out, because it was serving as a distribution platform for lots of different partners, and those partners kept changing. By early twenty twenty two, all those partners were pretty much gone. They had left after the terms of their licensing contracts expired, and in March twenty twenty two, word got out that verv was going to cease to exist to be its own thing, it would merge with crunchy Roll. The Verve app went dark just a couple of weeks before I recorded this episode on May eighth, twenty twenty three. So even the backup plan needed a backup plan, And this really shows how challenging it could be to run a streaming service successfully. Now, a lot of partners I mentioned they still have their own platforms. Many of them are part of much larger companies. So even though Verve doesn't exist anymore, some of a lot of the partners that worked with verv, they do still exist in one form or another. So, for example, rooster Teeth, which initially launched as a sort of independent content company, is today part of Warner Brothers Discovery Shutter, the horror themed over the top streaming services owned by ABC Networks, and it can also be accessed not just through its own app, but also through Amazon Video. So there are different places you can find this content. You just can't go to one central location and find it all there anymore, which is part of the problem. Right. It's a big challenge we consumers face is that we might hear about something we're interested in. Just figuring out where the heck you can get hold of that content can be a huge headache. Figuring out, Hey, do I actually subscribe to the service that runs this thing or am I going to have to subscribe to something else? All Right, we're going to take another quick break. When we come back, I've got some more failed streaming platforms to talk about. We're back, And as I said, I had mentioned Machinema earlier. By that, I mean machinima dot com. It has also ceased to be It operated for about twenty years before it went away, and it's a fascinating story all by itself. And I'm going to give a very brief one. I could do a full episode about Machinima dot com because holy cow, there's a lot to talk about, both from a tech side and from a business side, and really a talent side as well. Uh. It launched a ton of different shows, including one that I still followed today, though you could argue that the show I followed today is very different from the show as it originated back in the Maschionama days. But but Machinima is a portmanteau of machine and cinema, or sometimes machine and anime. It typically refers to a type of entertainment where you use computer generated characters, often video game characters, and you use them like digital puppets, and you tell a story, and that includes stories that have nothing to do with the platform you're using, the video game you're using. So in the old days, folks did this just for the fun of it. They used in game tools to cobble together and record short sketches or stories. So typically your camera was provided by someone who is recording their point of view as the story played out, or maybe they were using in game tools to position a virtual camera somewhere in an environment. Rooster Teeth, which I mentioned earlier in this episode, had a monumentally successful show in this genre called Red Versus Blue. They used the Xbox game Halo as the foundation for that show. Anyway, a mashinima creator named Hugh Hancock registered mashinema dot com in two thousand. The site would serve as a place for creators to store and make available their videos two thousand. This was before YouTube. If you created digital video, you had to host that somewhere online. Typically you would host it on a server, and then people would have to navigate to a web page and download the video in order to watch it, because streaming was not really a thing yet. So the website let creators tap into a growing audience for the medium. So there became like this kind of clearing house for machinema based entertainment, so people knew where to go to get it, and then creators had a place to put it so that they didn't have to try and do everything themselves, you know, host the material, market it, get people aware of it, that kind of thing. But hosting media files is expensive, right, especially if people are downloading them. That's a lot of bills you have to pay. So Mashinima was making revenue through an online store, so they would sell various types of merchandise to fans, and they also sold ad space on the site. And Hancock was pretty much responsible for running the whole darn thing for about six years, and in two thousand and six he decided that he needed a rest. That he had been running it and did about as much as he could as a single person, so he sold it to the former operators of a company called Creative Planet. Now not long after that you had the impact of YouTube, And in two thousand and seven, Mashinima established a YouTube channel and began to upload videos to YouTube itself. The company became rather dependent on YouTube actually, both as a place to store videos and to monetize them. Mashinima grew rapidly. It hit one billion monthly video views on YouTube in November twenty eleven. That is an incredible statistic. Mashinima was one of the largest most successful channels on YouTube. I think the only one that was ahead of it was Vivo, the music video channel. It had incredible engagement. People would go to Mashinema and stay there for more than an hour. But the company was also spending money very quickly, and in twenty twelve that caught up with them and they had to make some cutbacks because they were running out of cash. So they laid off more than twenty employees, which doesn't sound like a lot of people, but Mashinima was a lean operation that was like ten percent of all staff at the time. Then there was this expose and this is where I was really talking about how Mashinima was different from Quibi. You know, like Quibi creators, they retained intellectual property rights for their stuff. That wasn't how it was a Machinema. So this expose showed how predatory Mashinima could be. The Dallas Observer published an article that said when creators were signed on with Mashinema, they were agreeing to a lifelong contract that everything they made from that point forward would essentially belong to Mashinema forever. Even if they left the company, Mashinima would retain rights to that and to all the stuff they made afterward. That, y'all, is a bad deal. I mean pulling back the curtain. iHeart owns the rights to text stuff, so if I were ever to part ways with iHeart, I would not be able to take tech stuff with me. It does not belong to me. It belongs to iHeart. However, I could still create my own shows later on, and those would belong to me, because that's reasonable, right. But Mashinima's agreements sounded like something out of a fairy tale, like you belong to me forever. Like Ursula was in charge of the contracts department at Mashinema. The company was growing but also operating at a loss. In twenty fourteen, Warner Brothers invested around fourteen million dollars in the company. Masha got a new CEO in the form of Chad Gutstein, He reorganized the company, He landed some licensing deals with Warner Brothers, and he managed some other deals that have ultimately tempted Warner brook There's even more, and in twenty sixteen, Mashinima accepted a buyout offer for one hundred million smackaroos. So Gutstein joins in twenty fourteen and twenty sixteen, he says, my job here is done, and he leaves because he was essentially leading the company toward this acquisition, and Russell Aerins, who was a Warner Brothers executive, became the new head of Mashinema. By the way, this is also around the same time when AT and T acquired Warner Brothers and formed Warner Media. It is weird to think that it hasn't been that long since AT and T bought Warner Brothers, much less than divested itself of Warner Brothers, where Warner Brothers then merged with Discovery. It's crazy how much has changed in just in less than a decade. It's it's bonkers, all right. So anyway, WarnerMedia reorganized and put Mashinima under a division call Otter Media. This was in December twenty eighteen. Another company that was under Otter Media Rooster Teeth. Well. Then just a few weeks later, on January nineteenth, twenty nineteen, Otter Media wiped all of Mashinima's YouTube videos off the face of the earth, like the whole channel was nuked from orbit. It's the only way to be sure. Every single video was deleted or at least removed from public view. Then, at the beginning of February twenty nineteen, word got out that Otter Media had laid off every single Machinema employee. All eighty plus of them were fired or moved to a different division within Otter Media. So what gets Why was Machinima wiped out like that? Well, the idea was to consolidate digital media offerings in WarnerMedia, so the company owned a whole bunch of different digital media production companies and channels like a bunch, including Rooster Teeth, Full Screen, crunchy Roll. Warner would later sell Crunchy Role to Sony in twenty twenty, and they just wanted to kind of streamline things they felt like there was too much overlap. It probably ended up being for the best, because, as we all know, Discovery would acquire Warner Brothers after AT and T decided that its earlier decision to buy the company was a booboo, and knowing how David zaslovorx I imagined, Mishinima would have been an early candidate for the chopping block in an effort to reduce costs if it had still been a thing. On a similar note, here in Atlanta, we had a company called film Struck. Technically this was a division under Warner Brothers and Turner Classic Movies. The service launched in twenty sixteen with two tiers, so for six dollars ninety nine cents a month, you would have access to a basic digital library of various movies, mostly film classics. But if you coughed up ten dollars ninety nine cents a month, you would also have access to the criterion collection libraries. There's lots of different, highly regarded movies, so the whole concept behind this particular streaming platform was to attract movie lovers who wanted to be able to watch classics and foreign films and independent films the stuff that you often can't find on most streaming platforms. They said, well, here's the solution. We're going to make this platform and you'll be able to access those titles here. The service lasted two whole years and then shut down in twenty eighteen. So why did it shut down? Well, remember how I said AT and T merged with WarnerMedia. Well, part of that process involved slimming down and streamlining things, and film Struck was struck because it was seen as having a limited appeal. It was a niche product, so it didn't last at all due to corporate maneuvers. I mean that was the reason why it died. So if that hadn't happened, if the corporate manu had not been a thing, if giant companies weren't trying to figure out what can we strike from our record books to make this deal look better, then would Film Struck have been a big success. Probably not, but it might have done just fine, especially being supported by a community of film lovers. But we're never gonna know. Also, we had another streaming service launched out of Atlanta that lasted a whole month and then it was a shock when it got shut down. So in this case, and it relates back to Warner again. I'm talking about CNN Plus, the subscription based streaming service related to CNN, but it was going to carry things like documentaries, TV specials, that kind of thing, stuff that goes into much more depth than would be a lot of original programming. The division spit something like three hundred million dollars in building up to the launch, because, as I mentioned, this sort of production ain't cheap. Throughout twenty twenty one, it was gearing up for this event. It actually launched on March twenty ninth, twenty twenty two, and it didn't immediately crush it. It's not like they suddenly were overwhelmed by subscribers, but you know, they had just gotten started. But by the following month it got shut down. So again this would be because of David the Grim Reaper Zaslov because CNN was part of Warner Brothers. Discovery merged with Warner Brothers after AT and T bounced off of that partnership, and Zaslov needed to take a serious swing at cutting costs because both Discovery and Warner Brothers were in some fairly tough times. So once upon a time, this show tech stuff was actually part of Discovery Communications, and David Zaslov was CEO of Discovery and now he's CEO of Warner Brothers Discovery. So I got to see how things operated to a certain extent. It's not like I was in the room where it happens to quote Hamilton, but you know, I was in the company, so I could kind of see what was going on. And the cable business is really tough, similar to streaming. You know, things are great when you're pouring on subscribers. It's a money train at that point, baby, All those monthly fees are pouring in throughout the year, those big carriage deals with cable companies, they're huge and they bring in billions of dollars. However, eventually you hit saturation and it gets a lot harder to grow as a company, and growth is what investors want. So yeah, you could still be making huge amounts of money, but if you're not growing, that's a problem. So Discovery was kind of running up against that. Back when I was there. The company was focusing a lot on establishing a presence in countries where it previously didn't have service, like Central America or South America, and it was because that represented a place where it could actually grow. You couldn't really grow in the United States because the Discovery channel was already on pretty much all the different cable packages it could be on in the US, so you're not really growing there. Once you established your presence in a part of the world that dried up so that you had to go into different It almost becomes like colonization, but through cable channels again, kind of similar to streaming, right, Like, once you reach a saturation point where the people who are likely to subscribe are already subscribed, you don't really grow after that. That's a problem. So anyway, Zasov took a look at CNN Plus's business plan and its performance figures, and he said, well, there's no reason to keep this around. It's super expensive, it's going to take forever for it to reach a point where it might be profitable, and in the meantime, we need to cut billions of dollars off of our costs. So he shut it down after it had been open for a month. Now, there's no denying the service was costing Warner Brothers a lot of money, and that subscribers have exactly gone gaga over it. Plus both Warner Brothers and Discovery also already had their own streaming services, which of course raises the possibility that it could end up competing against itself in the market. You know, maybe one streaming service is a little more expensive than the others, but it doesn't have the number of subscribers that it should because you've kind of already convinced people to go to this other subscription service for less, even though it's a different offering. That's a real issue, right, So the plug got pulled. Now, there are lots of other streaming services that didn't stick around. Like I didn't even touch on Vine, which is another user generated one. We've talked about that one in the past and how Vine was kind of a precursor to Mega hit like TikTok. But yeah, there are other examples, not just the highly produced stuff that I focused on in this episode. Also, a lot of these existing streaming services are headed toward consolidation, right, Like we know that Discovery and HBO Max are becoming Max. That Max is going to be this combination of material. Although from why I understand, Discovery is still going to continue to operate its own independent streaming service because there's a fear that by combining, some of those subscribers will just jump ship because they don't want the max stuff, they don't want to spend more money on content, so they might leave. So I think that both of those are going to continue to exist. We found out not long ago that Disney is merging Hulu and Disney Plus into a single service by the end of this year, and that the Disney Plus subscription, at least for the ad free experience, will also be going up. So yeah, we're still seeing stuff consolidate. We're seeing streaming services merge together because I think all of them have come to the same conclusion that it's clear there's a demand for these services. It's clearer people want them, but it's also clear that there are real challenges to making it a profitable, scalable business while also producing you know, the content that's going to keep people there, because that content is so expensive and it's not like you know, serving ads against stuff. I mean, even though some of these streaming services do serve ads or have opportunities for people to subscribe it an ad supported tier, but there's no like Box Office for these streaming you know, pieces of content. So it's it's harder to get it to monetize properly. You know. It's the old models don't work on the streaming approach, so new models need to be formed. And I think we're still seeing that shake out, which is kind of funny because, like I said, Netflix launched theirs way back in two thousand and seven, not long after YouTube had become a thing. So the fact that we've been around this long with these streaming services and we're still trying to figure out a way of making them, you know, make money at a level where we're gonna get that prestige content, it's really interesting. I don't think it's gonna change. I don't think we're gonna lose these streaming services. We might lose some of them when companies just can't afford to continue the business. But I think that's still like the future of entertainment for at least the near term. But yeah, a lot of stuff's going to have to shake out for it to be sustainable and to be profitable. All Right, that's it for this episode. Like I said, there were a ton of other streaming services, some of which were more about audio streaming rather than video, but there's a lot of others that we could talk about. Maybe I will in future episodes, but I really wanted to focus on these and kind of explore what went wrong. A lot of times it wasn't the fault of the people who were running the program. It was literally because folks above them had to make some tough decisions while there were all these mergers and acquisitions going on. So yeah, tough story, but one that I think is worth examining. I hope you are all doing well, and I will talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.