Chill looks to slay the content distribution dragon with new direct to fan platform

By Michael Carney , written on November 29, 2012

From The News Desk

There’s a major transformation taking place in the way premium video content reaches its audience. No longer do artist and content creators need to rely on gatekeepers and middlemen to distribute their work. Or at least that’s been the promise. In practice, despite all the technological innovation and the occasional outlier success story – Glenn Beck and Louis CK – for the masses it hasn’t been nearly so simple.

Today, Los Angeles startup Chill is launching a new product aimed at putting this problem to rest once and for all. Chill Direct is, in the company’s words, the entertainment industry’s first self service, turnkey platform for artists to distribute content directly to their fans while retaining ownership. Chill is already known to consumers as a premier video discovery portal, now the company is hoping to become a marketplace for superfans to engage with content creators.

"We're going to make it easy for anyone with a creative vision to distribute their work to millions of people,” says Chill co-founder and CEO Brian Norgard.  “Amazing work should have no boundaries."

The vision for Chill Direct came from more than a year of conversations with content creators about their problems with online video as it currently exists. There were several main takeaways. The first was that declining production costs have resulted in far more premium content created than there is capacity within traditional distribution channels.

Currently this surplus content ends up online – if anywhere at all – where the only monetization option in most cases has been advertising. Unfortunately, results would indicate that advertising is likely not the right business model for most long form of content. More specifically, comedy specials, musical performances, independent feature films, documentaries, and educational content have not found a viable online business model.

At the end of the day, it all comes down to commerce. Chill allows creators to sell immediate streaming or downloads of their work, or alternatively to build buzz through pre-sales – one thing it does not offer is crowdfunding.  In addition to selling the content itself, the platform is tailored to offer complementary merchandise and “experiences,” including everything from t-shirts and posters, to lunch with the creator. The bottom line is that whatever the artist feels will appeal to its audience is fair game. Content owners keep 70 percent of the take, while Chill collects a flat 30 percent to cover hosting, payments, and all other services.

The second takeaway from those in the industry was that giving away creative control or intellectual property ownership is no longer seen as an acceptable compromise. One key to Chill’s new offering, then, is that it allows artists to retain full creative control and flexibility in a way that’s unavailable through existing channels such as broadcast networks, film studios, record labels, or digital marketplaces. Existing premium channels – such as Netflix and Hulu – are ostensibly closed platforms unless artists have existing relationships or better than average business development skills. YouTube, for all its promise, offers little in the way of commerce options at this stage and is not terribly flexible in its policies around content and audience ownership. Conversely, Chill Direct is open. The company allows content to exist on its platform and elsewhere simultaneously, and lets artists determine how, when, and at what cost it is available for consumption.

Chill Direct hopes to leverage this artist-friendly stance to become the destination for building a community hub around content. The platform makes it possible to create a gorgeous page to display content, engage with fans, and drive commerce, all in a matter of minutes – I know because I tried it this morning. Yes artist are already on Facebook, Twitter, YouTube, and elsewhere, but these platforms don’t offer the necessary commerce tools and have a much less purpose-driven design. Chill allows artists to build social communities within the commerce enabled Chill platform, while still tapping into the distribution powers of outside social networks.

The yet-to-be-release new MySpace is targeting a similar universal social and commerce platform approach to the music industry. The has been social network has its own challenges, but it will be interesting to watch the two companies deploy similar strategies in parallel.

If things stopped here, this would still be an industry-leading platform. Of course, given that lead in, you’d be correct to assume there’s more. Where Chill Direct really stands apart, in my opinion, is in its real-time analytics and optimization dashboard. Through this backend tool, artists get a comprehensive yet accessible picture of who their customers are, where they are coming from, how they are engaging with content, how they are transacting, and what is impacting sales. From this information they can gather actionable insights to improve their business. While other platforms like Facebook, Twitter, and Pinterest rely on third-parties to create the analytics solutions demanded by their power users, Chill Direct is launching out of the box with these tools.

Chill’s existing premium video discovery portal already attracts more than 20 million unique users per month. The addition of Chill Direct will add new, unique content and artist engagement opportunities to this existing vibrant ecosystem. The platform is launching with a slate of eight exclusive titles including an hour-long comedy special, “Maria Bamford: The Special Special Special!,” American homeless documentary “Battlefield of the Mind,” and suspense series “Unknown Sender,” by Die Hard writer Steven E. de Souza.

Chill may be a young company, but it’s not a novice one. Norgard and his co-founder Daniel Gould are both former MySpacers and co-founded both and Newsroo together. Their pedigree, the size of the market opportunity, and the early traction have allowed Chill to raise $10 million in two financing rounds from Kleiner Perkins Caufield & Byers, William Morris Endeavor, Atlas Ventures, Lowercase Capital, 500 Startups, Redpoint Ventures, CrunchFund, Science, Troy Carter, and Mike Jones. (*Disclosure, CrunchFund is an investor in PandoDaily)

Chill’s content distribution plan is an ambitious one, no doubt. There are dozens of deep pocketed, entrenched competitors that have their eyes set on this market opportunity. Further, Hollywood is notoriously one of the most unwelcoming to new entrants and alternative business models of any industry. That said, there is an obvious problem and no one has offered out a product as comprehensive and well thought out as Chill Direct. It’s inevitable that the startup will face competition, but to think that it can’t win this market would be foolish.