Wednesday, May 6, 2015, 1:14 PM ET|Posted by Will Richmond
Startup VHX has unveiled a turnkey SVOD platform with no upfront cost, no exclusivity and full branding/pricing/packaging control by content providers. The platform is intended both for both premium content providers and online original creators (e.g. YouTubers) seeking to diversify from free, ad-supported only models.
Jamie Wilkinson, co-founder and CEO of VHX sees the SVOD platform as allowing content providers to easily "roll their own" Netflix or HBO Now service. He distinguishes VHX's approach because the content provider is in control and retains all viewer data. Unlike a storefront like iTunes or Amazon, VHX's platform is meant for content providers that want to set up branded video businesses online, rather than just sell their content through third-party outlets.
That said, Jamie's quick to point out that VHX is non-exclusive. Content providers are welcome to sell through iTunes, Amazon and others, just as they can post free video on YouTube and elsewhere. Jaime highlights "Black & Sexy TV," a comedy creator targeting African-American audiences, and an early adopter of VHX's SVOD platform as a perfect example. While it continues to offer free content, its $7 per month "Black & Sexy Now" subscription service allows binge-viewing, no ads and exclusive content.
VHX's business model is revenue share based, with the company keeping 10% of retail subscription revenue plus a $.50 fee per transaction. Under those terms and VHX's assumptions, Jaime believes content providers could make 10 times more profit via subscriptions than with ads. VHX intends to be more economical for content providers vs. others like Vimeo Pro or online video platforms.
VHX is mostly a white label provider, though it does brand its player, and offers iOS, Roku and Chromecast apps that aggregate all of a user's purchased content (sort of an all-purpose digital locker). VHX also offers an API and mobile SDK so that content providers can build their own branded apps. VHX got its start enabling transactional VOD for creators like Aziz Ansari.
VHX also offers a variety of promotional tools like coupons and flash sales, to support content providers.
There's a huge rush toward SVOD these days among big players like HBO, Sling TV, CBS, etc, but VHX sees ample opportunity for independents and niche creators. Between VHX and Vessel, which is pioneering its own low cost SVOD/ad-supported model, there's more flexibility for content creators to monetize these days than ever.
VHX has 20 employees and raised a $5 million round led by Comcast Ventures, in January, bringing total capital rased to date to $9.4 million.