7 ms·

Afrostream is shutting down

56 points by MrGrillet 9y ago

majani 9y ago
I've always wondered whether VOD is an inherently unsustainable business model. The big daddy in the space charges $8-12 per month yet people regularly watch upwards of 10 movies per month on the service. That's less than $1 per movie?! Also, this forces anyone doing a similar business to charge even less than that to break into the market, so there reaches a point where we're talking fractions of pennies per movie on some services. How is any of this sustainable given the massive cost of acquiring the content in the first place, and is there any VOD service with healthy profits that you can point me to?
- jetti 9y ago
  I imagine that one could do well if you break into a niche that isn't really represented in other platforms. If you could make an indie VOD you may be able to get content cheaper and then you can market to those who like indie films.
  - shubb 9y ago
    Or old content. Spotify provides access to a huge back catalogue and although it probably reduces the value of some content it monetises other old content that was basically dead. Currently Netflix has a tiny library, when you take into account 50 years of film ripe for rediscovery. Anyone know what the blocker is?
    - tomcam 9y ago
      The blockers are that old content that people are willing to pay for is more expensive than you think (tons of competition right now), and that rights management is incredibly expensive and Byzantine even for the big companies. To take the simplest example, what do you do when an attractive property is owned by a company that went out of business, or that can't be reached? And that's just the easiest scenario.
- sp332 9y ago
  Once you've acquired the content, the marginal cost of a view is very low. So it makes sense to get as many customers as possible even if that means charging a lot less per view. And the stability of subscription income is nice too. I'm sure there are lots of people who have a $10/mo subscription going for years who hardly use the service at all.
  - toast0 9y ago
    I haven't seen any data for video content, but I imagine some content is pay $$$ to steam to as many users for a limited time, but much of it is probably pay $$$ to be able to stream it, plus $ each time it is streamed. And I imagine some deals are based on a share of revenue. I wouldn't be surprised if content was significantly more expensive than bandwidth.
- tomphoolery 9y ago
  It's expensive to do VOD right, because videos are such huge pieces of data. Plus, the "user experience bar" that Netflix, Hulu, and YouTube have set are pretty high and actually require a fair bit of engineering. There's no "15 minute blog demo" for VOD. The last company I worked for started out in that space, but had to pivot to doing linear television because the market just wasn't there. They built some of the same infrastructure that cable companies now use to do their on-demand services. The only VOD services with healthy profits are actually content creators themselves. All of the services I just mentioned in the other paragraph have their own original content, and at least Hulu & Netflix are pretty successful at that. This original content keeps people on their service, generating more ad revenue, which is how they make money. Basically, if you're a major studio and have billions of dollars to throw away, VOD is pretty easy ;-) Source: I worked for a failing VOD/broadcast video company for a couple years.
  - sandGorgon 9y ago
    what is the kind of infrastructure that needs to be built ? Very curious to know what are the big tech challenges if someone wants to build a VOD startup in a niche. How did Viki make it ?
    - dylz 9y ago
      Here are some tech challenges, this is strictly my opinion and shouldn’t be read too deeply, just a casual observation during lunch. My background is (as a hobby) I’ve built medium-sized >700m PV/m esports analytics apps targetted for Asia, covering CN/most of SEA, and have had to get local connectivity and local hosting as an "outsider" These countries are fairly insular. China: GFW (we all know about this), ICP license, network pricing (China Telecom, Unicom, CN2, etc) for international traffic. It’s extremely difficult or impossible to serve Chinese customers from outside of China, especially if you need stable high bandwidth transport (and STUPIDLY EXPENSIVE). Almost all network peering ports in Los Angeles for CN/CU are oversubscribed to death, and CN2 traffic is disgustingly expensive internationally. It’s generally not possible to do anything at all without a “local partnership” type arrangement. Korea: GFW (Korean censorship is heavy and extreme; there is really no other way putting this, people think SK is very “western”, it is not even close)[0]. You might see news about how Korea has fastest home internet - Korean connectivity is crap as soon as it leaves the country; the country is effectively a LAN, hosting outside of Korea is awful to inside, not possible to compete like that when all your assets are outside the country, and getting hosting is a bitch, and cost is hilarious. Korea has KYC/“real name verification” laws like China, things like needing to get KSSN via a credit bureau via iPIN/mobile phone verification (since mobile phones also require KSSN to get; and <18s mobile phones are keylogged anyway) collected at registration if you want to do anything social for the most part. The smaller countries in SEA tended to be a "if you don't speak the language, if you aren't from here, then fuck you, enjoy your highway robbery" to me. I paid bribes or else hardware would "go missing" or things "were impossible to do unfortunately", I paid prices significantly higher than any domestic purchasers would, the companies that had English sites you could literally see the prices have an extra decimal place just switching between the two versions. I had to do a bunch of logic wrt balancing traffic. I had a server that had multiple physical NICs, each connecting to a different ISP. They don't necessarily like each other, so if I served a PLDT end-user from a Globe connection instead of PLDT, traffic may get forced intentionally through another country. There are incumbent ISPs that control a majority and charge far more that intentionally refuse to peer with any other ISP, and force domestic traffic out of the country to punish those users for not using them. My site showed user profiles, which obviously includes their usernames. I had physical hardware shut down and removed by police in Thailand because someone had a username mocking the royalty there. edit: I forgot my [0] - https://www.eff.org/deeplinks/2011/08/south-korea-only-thing-worse-online-censorship https://www.eff.org/deeplinks/2011/08/south-korea-only-thing... - the person involved is actually on the censorship board
- TCM 9y ago
  Maybe crunchyroll? https://en.wikipedia.org/wiki/Crunchyroll https://en.wikipedia.org/wiki/Crunchyroll http://crunchroll.com http://crunchroll.com
whalesalad 9y ago
The mission behind a company like this is admirable, but I can't help but feel like it is the wrong approach to diversity. It reminds me of BET... why would we want to segregate content to one specific channel or network? It feels backwards to me. True diversity would be having this content everywhere. A service like this is almost like a specialty kitchen item. My fiancée is a stickler for this stuff and it is something I really love about her. She hates speciality, single-use items. Take the cherry-pitter[1]. It's obnoxiously large, like a beefy can opener, and the only thing it does is remove pits from cherries (and, apparently Olives). She doesn't want stuff like that in our kitchen, and I don't blame her. Regardless of your cultural background, why might you want to buy a standalone TV/streaming package for one vertical of content? I think we'd all agree the future would might involve a-la cart purchases like this... but we aren't there yet. Once you combine your Basic TV via Sling or Playstation Vue, Netflix for the riff-raff, and an add-on luxury package like HBO GO - you don't have any more room for speciality items. They need to be REALLY special in order to work. Just like the cherry pitter – there just isn't any room left in my drawers for a single purpose item. [1] https://www.oxo.com/products/preparing/fruit-vegetable-tools/cherry-olive-pitter#black https://www.oxo.com/products/preparing/fruit-vegetable-tools...
- djtriptych 9y ago
  True diversity is The Pirate Bay. All the reasons why we can't have unfettered legal access to The Pirate Bay are also reasons why your utopian approach to "true diversity" is wrong-headed.
- jfc 9y ago
  Nothing to do with an approach to diversity. Just another startup that didn't get traction in its desired vertical. Look at Viki, a really popular VOD site, acquired by Rakuten for $200 million or so. Focuses heavily on South Korean, Chinese, and Japanese dramas. Segregation? More like making it easy for people who want to watch the shows to find and follow them regularly. Successful? Yep. This sort of media consumption is here now. AfroStream did the same thing as Viki but instead of Asian countries used the African diaspora. Didn't follow them so don't know what the business reasons are for their failure, but relating it to diversity and segregation seems unwarranted. It's more like they were targeting the long tail of media consumption, even if unsuccessfully.
h_o 9y ago
Looking for funding for my startup called Crackerstream /s
- magic_beans 9y ago
  Literally every media outlet is Crackerstream, alas.
- sctb 9y ago
  Comments like this have no business on HN, so we've banned the account. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
microcolonel 9y ago
> "Diversity is a business opportunity" No it's not, few people care about what skin colour the characters in a work of entertainment have, unless it is fundamental to the plot or an aspect of the source material. At very least, they do not care enough to self-segregate and bear separately the cost of producing an entirely different set of works of entertainment which are of competitive quality. No untainted mind watches Game of Thrones and thinks "You know, it's weird that this fiction styled after old Europe is full of white people.". Nobody watches Narcos and thinks "You know, it's weird that this fiction set in Colombia is full of Mestizos and white latins". Nobody watches Big Brother Africa and thinks "You know, it's weird that this reality game show set in sub-Saharan Africa is full of sub-Saharan Africans".
- deleted 9y ago
  [deleted]
- Uhhrrr 9y ago
  I remember an LA Times story where they compared the top 10 shows black people watched versus ones white people watched, and they were very different (60 Minutes and Friends, not so much). So there might be opportunity in a better-curated VOD service.
  - microcolonel 9y ago
    Yeah, I just figure having completely separate streaming services and content for separate ethnic groups is probably lower return than the equivalent for different genders; and neither sounds like it would have all that much to offer. It would also be supremely easy to compete them out of existence for any establish VOD provider, because all they have to do is add some categories or a survey; and put some tags on their content. If they have a lot of customers in a demographic and they know they want stratified content, they can just commission it.
- tekromancr 9y ago
  > No it's not, few people care about what skin colour the characters in a work of entertainment Said like someone who sees people that look like them in damn-near 100% of the media they consume
40acres 9y ago
I've never heard of this product but it's sad to see it not work out. There is a huge gap when it comes to black media representation in the United States specifically and I believe it will be a huge opportunity to whoever can tap into it's potential. Black millennials in particular are such a driver of culture in America it's surprising to see how little they are catered to in terms of product. Especially in regards to social media, the impact of Black Twitter is well documented. Also, for anyone who used Vine it seemed like Black creators were really the base of the content that Vine was known for.
- mikeh1010 9y ago
  Yes agreed. I'd also argue that black millennials (and younger) aren't just drivers of culture, they're also tech early adopters! Vine is a great example, Worldstar is a somewhat notorious example, BlackPlanet... those are just off the top of my head.
T2_t2 9y ago
> Let’s take the example of an African-American independent or Nigerian film (Nollywood) at € 3,000 per year of use. What about giving away shares for content? I mean, if Afrostream gave away X% of the shares, in return for the rights to content outside the home country, the cost of content reduces to close to zero, and the money spent on operations and marketing starts to approach 100%. This is a far less than ideal model, to be sure, but then, the company closing is a lot worse! Shares are worth nothing until there is a liquidation event, so maybe the play is to get the content providers to become shareholders? I could see a play where content providers that have content worth essentially nothing (unless there is a marketplace for streaming Nollywood in the west I am unaware of {which is indeed extremely possible}) but for which they may be able to grow a market that, over time, has value. That seems like a win-win, or at least a no-lose-no-lose, situation. Is that not worth pursuing?
EJTH 9y ago
Maybe don't make an etnocentric streaming site. Why would you even think that is a sane idea? Where is the white mans streaming service? This is borderline retarded.
- dang 9y ago
  We've banned this account for repeatedly violating the HN guidelines and ignoring our requests to stop. Please don't create accounts to do this with. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - EJTH 9y ago
    Dang. I think I asked a sensible question. What is the purpose of an etnocentric streaming service? Do you genuinely think this is a good idea? Poltiical affiliation aside this is just a horrible idea. I guess you are in your good right to ban me, having a free market and all. Its just kind of perplexing to be honest. You add this makeshift appendum to the rules, yet I still see you enforce only one side. Also I thought that worldstar was the number one afro video site.
Geekette 9y ago
As some comments imply it was strength of or "approach to diversity" in the market that caused the failure, it should be noted the post outlined: What caused Afrostream to close is not lack of traction or market demand but lack of capital. The more subscribers gained, the more content thus, more funding required. The VOD industry has high operating costs (content acquisition, marketing, localization, tech, etc) and a longer breakeven timeline (note cited examples of other much bigger but not yet profitable companies including Netflix). Afrostream addressed a sizable but ignored niche with demand demonstrated in user growth and it is unfortunate that they couldn't get more funding.

56 points by MrGrillet 9y ago

I've always wondered whether VOD is an inherently unsustainable business model. The big daddy in the space charges $8-12 per month yet people regularly watch upwards of 10 movies per month on the service. That's less than $1 per movie?! Also, this forces anyone doing a similar business to charge even less than that to break into the market, so there reaches a point where we're talking fractions of pennies per movie on some services. How is any of this sustainable given the massive cost of acquiring the content in the first place, and is there any VOD service with healthy profits that you can point me to?

jetti 9y ago
I imagine that one could do well if you break into a niche that isn't really represented in other platforms. If you could make an indie VOD you may be able to get content cheaper and then you can market to those who like indie films.
- shubb 9y ago
  Or old content. Spotify provides access to a huge back catalogue and although it probably reduces the value of some content it monetises other old content that was basically dead. Currently Netflix has a tiny library, when you take into account 50 years of film ripe for rediscovery. Anyone know what the blocker is?
  - tomcam 9y ago
    The blockers are that old content that people are willing to pay for is more expensive than you think (tons of competition right now), and that rights management is incredibly expensive and Byzantine even for the big companies. To take the simplest example, what do you do when an attractive property is owned by a company that went out of business, or that can't be reached? And that's just the easiest scenario.
sp332 9y ago
Once you've acquired the content, the marginal cost of a view is very low. So it makes sense to get as many customers as possible even if that means charging a lot less per view. And the stability of subscription income is nice too. I'm sure there are lots of people who have a $10/mo subscription going for years who hardly use the service at all.
- toast0 9y ago
  I haven't seen any data for video content, but I imagine some content is pay $$$ to steam to as many users for a limited time, but much of it is probably pay $$$ to be able to stream it, plus $ each time it is streamed. And I imagine some deals are based on a share of revenue. I wouldn't be surprised if content was significantly more expensive than bandwidth.
tomphoolery 9y ago
It's expensive to do VOD right, because videos are such huge pieces of data. Plus, the "user experience bar" that Netflix, Hulu, and YouTube have set are pretty high and actually require a fair bit of engineering. There's no "15 minute blog demo" for VOD. The last company I worked for started out in that space, but had to pivot to doing linear television because the market just wasn't there. They built some of the same infrastructure that cable companies now use to do their on-demand services. The only VOD services with healthy profits are actually content creators themselves. All of the services I just mentioned in the other paragraph have their own original content, and at least Hulu & Netflix are pretty successful at that. This original content keeps people on their service, generating more ad revenue, which is how they make money. Basically, if you're a major studio and have billions of dollars to throw away, VOD is pretty easy ;-) Source: I worked for a failing VOD/broadcast video company for a couple years.
- sandGorgon 9y ago
  what is the kind of infrastructure that needs to be built ? Very curious to know what are the big tech challenges if someone wants to build a VOD startup in a niche. How did Viki make it ?
  - dylz 9y ago
    Here are some tech challenges, this is strictly my opinion and shouldn’t be read too deeply, just a casual observation during lunch. My background is (as a hobby) I’ve built medium-sized >700m PV/m esports analytics apps targetted for Asia, covering CN/most of SEA, and have had to get local connectivity and local hosting as an "outsider" These countries are fairly insular. China: GFW (we all know about this), ICP license, network pricing (China Telecom, Unicom, CN2, etc) for international traffic. It’s extremely difficult or impossible to serve Chinese customers from outside of China, especially if you need stable high bandwidth transport (and STUPIDLY EXPENSIVE). Almost all network peering ports in Los Angeles for CN/CU are oversubscribed to death, and CN2 traffic is disgustingly expensive internationally. It’s generally not possible to do anything at all without a “local partnership” type arrangement. Korea: GFW (Korean censorship is heavy and extreme; there is really no other way putting this, people think SK is very “western”, it is not even close)[0]. You might see news about how Korea has fastest home internet - Korean connectivity is crap as soon as it leaves the country; the country is effectively a LAN, hosting outside of Korea is awful to inside, not possible to compete like that when all your assets are outside the country, and getting hosting is a bitch, and cost is hilarious. Korea has KYC/“real name verification” laws like China, things like needing to get KSSN via a credit bureau via iPIN/mobile phone verification (since mobile phones also require KSSN to get; and <18s mobile phones are keylogged anyway) collected at registration if you want to do anything social for the most part. The smaller countries in SEA tended to be a "if you don't speak the language, if you aren't from here, then fuck you, enjoy your highway robbery" to me. I paid bribes or else hardware would "go missing" or things "were impossible to do unfortunately", I paid prices significantly higher than any domestic purchasers would, the companies that had English sites you could literally see the prices have an extra decimal place just switching between the two versions. I had to do a bunch of logic wrt balancing traffic. I had a server that had multiple physical NICs, each connecting to a different ISP. They don't necessarily like each other, so if I served a PLDT end-user from a Globe connection instead of PLDT, traffic may get forced intentionally through another country. There are incumbent ISPs that control a majority and charge far more that intentionally refuse to peer with any other ISP, and force domestic traffic out of the country to punish those users for not using them. My site showed user profiles, which obviously includes their usernames. I had physical hardware shut down and removed by police in Thailand because someone had a username mocking the royalty there. edit: I forgot my [0] - https://www.eff.org/deeplinks/2011/08/south-korea-only-thing-worse-online-censorship https://www.eff.org/deeplinks/2011/08/south-korea-only-thing... - the person involved is actually on the censorship board
TCM 9y ago
Maybe crunchyroll? https://en.wikipedia.org/wiki/Crunchyroll https://en.wikipedia.org/wiki/Crunchyroll http://crunchroll.com http://crunchroll.com

whalesalad 9y ago

The mission behind a company like this is admirable, but I can't help but feel like it is the wrong approach to diversity. It reminds me of BET... why would we want to segregate content to one specific channel or network? It feels backwards to me. True diversity would be having this content everywhere. A service like this is almost like a specialty kitchen item. My fiancée is a stickler for this stuff and it is something I really love about her. She hates speciality, single-use items. Take the cherry-pitter[1]. It's obnoxiously large, like a beefy can opener, and the only thing it does is remove pits from cherries (and, apparently Olives). She doesn't want stuff like that in our kitchen, and I don't blame her. Regardless of your cultural background, why might you want to buy a standalone TV/streaming package for one vertical of content? I think we'd all agree the future would might involve a-la cart purchases like this... but we aren't there yet. Once you combine your Basic TV via Sling or Playstation Vue, Netflix for the riff-raff, and an add-on luxury package like HBO GO - you don't have any more room for speciality items. They need to be REALLY special in order to work. Just like the cherry pitter – there just isn't any room left in my drawers for a single purpose item. [1] https://www.oxo.com/products/preparing/fruit-vegetable-tools/cherry-olive-pitter#black https://www.oxo.com/products/preparing/fruit-vegetable-tools...

djtriptych 9y ago
True diversity is The Pirate Bay. All the reasons why we can't have unfettered legal access to The Pirate Bay are also reasons why your utopian approach to "true diversity" is wrong-headed.
jfc 9y ago
Nothing to do with an approach to diversity. Just another startup that didn't get traction in its desired vertical. Look at Viki, a really popular VOD site, acquired by Rakuten for $200 million or so. Focuses heavily on South Korean, Chinese, and Japanese dramas. Segregation? More like making it easy for people who want to watch the shows to find and follow them regularly. Successful? Yep. This sort of media consumption is here now. AfroStream did the same thing as Viki but instead of Asian countries used the African diaspora. Didn't follow them so don't know what the business reasons are for their failure, but relating it to diversity and segregation seems unwarranted. It's more like they were targeting the long tail of media consumption, even if unsuccessfully.

h_o 9y ago

Looking for funding for my startup called Crackerstream /s

magic_beans 9y ago
Literally every media outlet is Crackerstream, alas.
sctb 9y ago
Comments like this have no business on HN, so we've banned the account. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

microcolonel 9y ago

> "Diversity is a business opportunity" No it's not, few people care about what skin colour the characters in a work of entertainment have, unless it is fundamental to the plot or an aspect of the source material. At very least, they do not care enough to self-segregate and bear separately the cost of producing an entirely different set of works of entertainment which are of competitive quality. No untainted mind watches Game of Thrones and thinks "You know, it's weird that this fiction styled after old Europe is full of white people.". Nobody watches Narcos and thinks "You know, it's weird that this fiction set in Colombia is full of Mestizos and white latins". Nobody watches Big Brother Africa and thinks "You know, it's weird that this reality game show set in sub-Saharan Africa is full of sub-Saharan Africans".

deleted 9y ago
[deleted]
Uhhrrr 9y ago
I remember an LA Times story where they compared the top 10 shows black people watched versus ones white people watched, and they were very different (60 Minutes and Friends, not so much). So there might be opportunity in a better-curated VOD service.
- microcolonel 9y ago
  Yeah, I just figure having completely separate streaming services and content for separate ethnic groups is probably lower return than the equivalent for different genders; and neither sounds like it would have all that much to offer. It would also be supremely easy to compete them out of existence for any establish VOD provider, because all they have to do is add some categories or a survey; and put some tags on their content. If they have a lot of customers in a demographic and they know they want stratified content, they can just commission it.
tekromancr 9y ago
> No it's not, few people care about what skin colour the characters in a work of entertainment Said like someone who sees people that look like them in damn-near 100% of the media they consume

40acres 9y ago

I've never heard of this product but it's sad to see it not work out. There is a huge gap when it comes to black media representation in the United States specifically and I believe it will be a huge opportunity to whoever can tap into it's potential. Black millennials in particular are such a driver of culture in America it's surprising to see how little they are catered to in terms of product. Especially in regards to social media, the impact of Black Twitter is well documented. Also, for anyone who used Vine it seemed like Black creators were really the base of the content that Vine was known for.

mikeh1010 9y ago
Yes agreed. I'd also argue that black millennials (and younger) aren't just drivers of culture, they're also tech early adopters! Vine is a great example, Worldstar is a somewhat notorious example, BlackPlanet... those are just off the top of my head.

T2_t2 9y ago

> Let’s take the example of an African-American independent or Nigerian film (Nollywood) at € 3,000 per year of use. What about giving away shares for content? I mean, if Afrostream gave away X% of the shares, in return for the rights to content outside the home country, the cost of content reduces to close to zero, and the money spent on operations and marketing starts to approach 100%. This is a far less than ideal model, to be sure, but then, the company closing is a lot worse! Shares are worth nothing until there is a liquidation event, so maybe the play is to get the content providers to become shareholders? I could see a play where content providers that have content worth essentially nothing (unless there is a marketplace for streaming Nollywood in the west I am unaware of {which is indeed extremely possible}) but for which they may be able to grow a market that, over time, has value. That seems like a win-win, or at least a no-lose-no-lose, situation. Is that not worth pursuing?

EJTH 9y ago

Maybe don't make an etnocentric streaming site. Why would you even think that is a sane idea? Where is the white mans streaming service? This is borderline retarded.

dang 9y ago
We've banned this account for repeatedly violating the HN guidelines and ignoring our requests to stop. Please don't create accounts to do this with. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- EJTH 9y ago
  Dang. I think I asked a sensible question. What is the purpose of an etnocentric streaming service? Do you genuinely think this is a good idea? Poltiical affiliation aside this is just a horrible idea. I guess you are in your good right to ban me, having a free market and all. Its just kind of perplexing to be honest. You add this makeshift appendum to the rules, yet I still see you enforce only one side. Also I thought that worldstar was the number one afro video site.

Geekette 9y ago

As some comments imply it was strength of or "approach to diversity" in the market that caused the failure, it should be noted the post outlined: What caused Afrostream to close is not lack of traction or market demand but lack of capital. The more subscribers gained, the more content thus, more funding required. The VOD industry has high operating costs (content acquisition, marketing, localization, tech, etc) and a longer breakeven timeline (note cited examples of other much bigger but not yet profitable companies including Netflix). Afrostream addressed a sizable but ignored niche with demand demonstrated in user growth and it is unfortunate that they couldn't get more funding.