After starting as a pure-play subscription VoD streaming service, CuriosityStream is tweaking its business model to include a cheaper service, sponsorships and a TV-style linear feed.

Jeff Baumgartner, Senior Editor

August 7, 2018

4 Min Read
CuriosityStream Expands Its OTT Video Model

Indicating a broader shift in the subscription VoD sector, CuriosityStream is altering its business model using a mix of less expensive service packaging, exclusive sponsorships for free access to a curated portion of its library and a linear feed tailored for its international distributor partners.

Those changes arise as CuriosityStream -- an OTT-delivered service focused on documentaries and other fact-based programming headed by Discovery Communications Inc. (Nasdaq: DISCA, DISCB, DISCK) founder and cable programming legend John Hendricks -- aims to further monetize its library of licensed and original programming and to help stoke subscription and viewership growth in the US and abroad.

Figure 1:

Its pure-play SVoD service has built up a sizable customer base (it has nearly 1 million subscribers more than three years after its debut in mid-March 2015). But the expanded business model is an indicator that new and emerging streaming services likely will need to explore new avenues if they are to survive and thrive for the long term.

Here's a snapshot of what's new or different:

  • The service's primary SVoD streaming service -- offered as a standalone and through distribution partners such as Sling TV , Dish Network LLC (Nasdaq: DISH), Comcast Corp. (Nasdaq: CMCSA, CMCSK), Layer3 TV and the National Cable Television Cooperative Inc. (NCTC) -- will offer an HD library (about 1,800 titles) for the reduced price of $2.99 per month or $19.99 annually (its former HD tier fetched $5.99 per month). While the service's standard-definition tier is going away, CuriosityStream will still market a higher-end tier for $9.99 per month that includes access to its 4K/Ultra HD library.

  • The debut of CuriosityStream Showcase, a free, sponsorship-backed offering that features 18 titles (typically the first episode of a series), including Digits. The plan is to sign on six presenting sponsors for each programming category (telecommunications, automotive, insurance, banking, pharmaceuticals and aerospace. Sprint Corp. (NYSE: S), the first to sign on for the telecom category, presents a 15-second pre-roll message while the rest of the program runs commercial-free. At the end of those sponsored programs, CuriosityStream tells viewers how they can upgrade to the full SVoD service.

  • The introduction of a linear channel feed for distributors that can complement the SVoD offering. CuriosityStream expects to make the linear feed, which will include some "light" advertising to international distributors, available starting with StarHub in Singapore.

The new Showcase offering that puts select content in front of the paywall, offers a "great way for people to sample the service and it's a great way to expose CuriosityStream, essentially, to the world," Clint Stinchcomb, CuriosityStream's president and CEO, said.

CuriosityStream's revised strategy is also coming into play as the service moves ahead with a plan to eventually get the service's marketing spend and programming spend to a level of $100 million-plus each, he said.

Stinchcomb said there's currently an even split between CuriosityStream's US and international subscriber base, but he expects the majority of subs to come from outside the US within the next year.

Moves speak to a wider trend in the SVoD arena
Analysts say the moves at CuriosityStream tie into a broader trend as SVoD services explore new ways to differentiate and monetize their libraries in a crowded market, using strategies that go beyond a core subscription model but come with significant customer acquisition challenges.

As the market for video streaming services matures and becomes more saturated, "they [SVoD services] need to look at new ways to knock down those barriers and broaden the revenue base," Colin Dixon, founder and chief analyst at nScreenMedia , said.

The sponsorship angle is particularly helpful in this area, Dixon added, because it gives CuriosityStream a way to sample its programming without weighing it down with commercials, while also giving sponsors exposure to an audience that is tough to reach.

The experimentation with business models can help draw new subs and provide a point of differentiation, added Brett Sappington, senior director of research at Parks Associates .

He said three SVoD leaders -– Netflix Inc. (Nasdaq: NFLX), Inc. (Nasdaq: AMZN) and Hulu LLC -– are prime examples, as each has introduced new tiers or subscription options aimed at luring in new customers. Among them, he said, Amazon has seen the percentage of consumers opting for its annual subscription drop since 2016 but has made up for in part with newer monthly subscription options or subscriptions directly to Prime Video.

But CuriosityStream "has been far more willing than most OTT services to experiment with various aspects of their service," added Hunter Sappington, a research analyst at Parks Associates. He cited its ongoing work with traditional and virtual MVPDs, as well as SVoD aggregation services such as Amazon Channels and VRV.

— Jeff Baumgartner, Senior Editor, Light Reading

Read more about:


About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like