Building a paid marketplace for video creators [Podcast #98]
In this episode of the SOL Podcast, we are having Scott Green, Founder & CEO of Lounges.tv, representing the whole team and the whole company.
Tune in to the SOL Podcast to hear about Scott’s entrepreneurial experience and his journey with Lounges.tv which is a streaming platform.
We addressed issues like business growth, pros and cons of running a streaming platform and being in the market, developing technology according to current needs, adjusting to the market, and impacts of past experiences in terms of assets of a company. Listen to our insightful chat with Scott Green to broaden your horizons about entrepreneurship through the experiences of another startup and learn more about their journey.
Hello, and welcome to the startups of London podcast. I’m your host Ozanne and the founder of startups of London. Today I’m joined by Scott Greene, founder of lounges that TV, welcome, Scott.
Hi, how are you?
I’m all right. I have launched.TV open in a tab. It looks a lot like it reminds me a bit of BBC iPlayer, a bit of Netflix, and a bit of Amazon Prime. And my first question is like, tell us about the business. And then I’m really curious to jump into discovering the landscape of streaming with you. Because it’s a streaming business, right?
Yes, it’s a streaming business. That’s right.
So, tell us about the business model. How does it work? And then I really would like to discover with you the competitive landscape and why it is the right time to buy a business like this.
So, thanks. You compare it to like, BBC, iPlayer, Netflix those kinds of platforms, but then more kind of run by rights holders, where our platforms are all about user-generated content. So, it’s probably the landscapes more probably Youtube, Instagram, and Facebook, where it’s user-generated content. Because the reason that we set this business up is that there is so much talent in the world today, so much talent out. But unfortunately, a lot of people are going on heard unnoticed, and our platform really allows small, mid, and large creators to earn considerable money and also get recognized for their talent. So that’s kind of allowed us. it’s a user-generated platform that really nurtures talent. And then we’re going to democratize the streaming sector.
That’s interesting. Also, this brings us to a question perhaps about the challenges of building a platform business. Because it’s a two-sided market, it is not appealing to the content creators, if there is no one to watch the content, right?
Yes, that’s right, obviously. So let me go back to the kind of beginning a little bit, and tell you about why we kind of exist in the marketplace today. So, there’s never been more content uploaded than ever before. There’s never been any more and more creative than ever before. And what the pandemic did really is streaming was booming before the pandemic, and then the pandemic arrived. And it’s super-sized, everybody decided that streaming was a very acceptable way to communicate to entertain yourself. And that used to be very much millennials, and Gen Z says that we’re streaming now my mom and dad are streaming, everybody’s streaming, there’s a huge growth areas in the world of the streaming marketplace. But, as I mentioned before, there’s never been more creative. There’s never been more content ever before. But 99% of people that use streaming platforms, or use YouTube, for example, don’t earn any money, because unless you have a million followers. It’s very difficult to make any revenues online if because the current model is all generated by ads. So if you upload a video to YouTube, they’ll put an ad in the beginning ad in the middle of an ad at the end. And if lots of people, if you’ve got millions of followers, people are going to see that, but unfortunately, only 1% of the world has got circa a million followers. So that’s kind of like it, that’s a really difficult marketplace at the moment to be found and heard at a revenue
It is. But I’m just going to push back with the idea of really uncovering what is great about your business. So that’s my motivation here. But hear me out; on YouTube and in similar platforms, there is almost an open market dynamic, kind of like a push-pull self-balancing mechanism, if you will, in which, if a piece of content is not great, it’s not going to be watched. And it’s not going to be making any money for the Creator. Of course, the opposite case is true. If the content is great, it’s going to be watched, and it’s going to make money. So, in a way from the pot of the available ad revenue and the subscription revenue to pass. It is divided in terms of how many of those videos create value and depending on the value that they create. It’s an imperfect system, but I think it’s the best we got this kind of like capitalism, perhaps. But with other systems in which the user has to audit to take a look, read a description and then decide, okay, am I going to pay three pounds for this? Am I going to pay five pounds for this? Is it worth it? Sometimes it is if you have heard some reviews if you’re hyped up about it if you have seen let’s say a trailer if you got a recommendation from a friend if there’s a social aspect, but other than that, just stumbling onto a piece of content while you’re scrolling through the internet, seeing it’s five pounds, not knowing anything about it. It is quite difficult to say okay, I’ll pay for this. So how do you overcome that specific dilemma?
I mean, obviously content is king and the quality of your content has to be good. That’s the same on any platform, if your content is not good, no one’s going to watch it, and no one’s going to pay for it. And therefore, you weren’t on any money. So, what we are what we do with our platform is everyone on our platform. First of all, if we look at the revenue model, what we’ve done is we’ve ditched ads, there are no ads on our platform, it’s all around pay-per-view. So and we pay 80% of the revenue for all pay-per-view revenue coming in. So now somebody with maybe 10,000 followers, only converts 1% of their audience, that’s only 100 people. But if you put a paywall in front of that amazing content, which is five pounds, that revenue that you own, for that one piece of content going to run, generate you 500-pound revenue, and we pay that the next day. So, our platform is the gig economy which means streaming. But going back to your other point about the quality of the content is we our platform has free previews. So, for every single bit of content that goes live on lounges, everyone gets to see a preview of that content for maybe 20, I think it’s 10% of the length of the full feature. So, what we do is we allow people to watch the content, and if they like it, they then buy it. We don’t force people to buy the content before they’ve actually seen a snippet of it. What our platforms doing is, what he’s doing is we’re helping creators ring their current audience, followers and fans to our platform. So, when you create a piece of content on lounges, we give you the widgets for Facebook widgets for Instagram widgets for Snapchat linked for WhatsApp, saying, hey, I’ve produced his content, come and watch it. And they’re already what they’re already following them. They’re already fans of them. So, the fact is, is they wouldn’t be there’ll be a much higher conversion rate, because they’re already watching their content on other platforms. So, what we’re saying is to our audiences, don’t stop creating your short form content on tick tock, Instagram, Snapchat, and YouTube. But when you want to create much better content that can warrant sitting behind a paywall, yeah, louder TV is that platform where we you can use our studios, you can use our venues, you could go live on the platform. And we make it very our technology is very immersive, you bring your fans and your creatives together like never before you can come onto the stage, and you can ask questions. It’s not just a flat stream like you would watch it on YouTube. So yeah, so, we’re helping talent, bring their current existing fans to the platform, and then we pay that 80% within 24 hours. So that’s one side of our business. The other side of the business is we’ve got lots of people to come into the platform, we have just we’re not, we’re obviously not the size of all the big boys yet. But we’ve launched with betta launch, we’ve tested, we’ve got lots of creators on our platform, we’re learning we’re listening, we’re adjusting. And, at the beginning of the new year, we’re going to be having a much, much bigger marketing campaign. And people that come and watch someone else’s content will then go to the platform and will recommend you watch this music event while you watch this. So, there’s that viral effect that people aren’t audiences are going to come to the platform and watch lots of different pieces of content. And it’s not all pay-per-view.
Let’s talk about the traffic you have as perhaps part of a larger conversation or when you started, what’s the trajectory been so far?
Yes, so we’ve kind of built a very big platform that allows creators to do lots and lots of things. And we can come on to the tech layers and all the different features a bit later. So, what we’ve done is we’ve done a beta stage, where we’ve spoken to 1000s, of creators, we’ve asked lots of creators, what they like and what they don’t like, and incorporate that into our platform. So, we then did our beta stage, and we’re now on to our kind of like testing, finishing the testing phase. And we’ve got lots, as I say, we, we’ve got traffic on the platform, not in the millions yet. But, in New Year, we’re hoping to enhance the marketing deals we’ve got, and that celebrity ambassadors that we’re securing, we’ve got big creators coming on board, we’ve just agreed a deal with the lower third, which is the venue of the Outernet in central London, unbelievable venue, in a new music venue where we’ll be pumping out lots of really great content from there. We’ve just built our own studios, where anybody can use our facilities. It’s a really cool streaming service and streaming studio. So, we’re starting to get loads of content out for that. We’re working with lots of different marketing partners from magazines, newspapers, and internet platforms that want to partner with us. So, we’ve got some really exciting deals coming out in the first quarter and second quarter of next year. That’s really going to kind of drive lots and lots of traffic to our platform. So, it’s not about where we are now. It’s where we’re going to be over the next 369 12 months.
Exciting. Well, what was the inception of this idea? And perhaps with that, we’ve never talked about your background. So, what brought you to the building? Largest? Yes. So,
So, my background… I started my career in media in the kind of the late beginning of the 90s, really, just as the internet was about just starting really, I mean I was working with various different advertising agencies I used to work at like Saatchi and Saatchi and various different ones. And then the internet blew up. And then I was like, wow, this is just this unbelievable. This is just this is going to change the world. And it took a bit of time, and there was obviously the.com bubble and stuff, but I was always really into the tech, the internet, how it can change people’s world and what you can do and communicate and stuff. And then I started thinking about my next move. So, then I started then I went to work for a few different startup businesses, in gaming, in Prop tech, and just really kind of engineering myself into the world of technology, and set up a few different startup businesses., some were very successful, some words so successful, but obviously you learn from the failures, and you knew exactly, you never going to always strike and hit first. But, then when the pandemic came, I realized that Zoom was just blowing up, it was just such an amazing concept that I can actually speak and communicate, with so many different people around the world just by video. And it’s kind of like, as I said before, it supersizes this whole sector. And then I looked at the whole landscape of the talent marketplace. And as I said, Before, there are so many talented people in the world musicians, grassroots bands, chefs, comedians, PTs, honestly, the list goes on. Most 99% of people are being or not being found. They’re not being heard. So, I was like thinking I was thinking about how to zoom in with a paywall, where creators can go live on a platform that’s now accepted by the world and build a paywall into it. Because what was happening in the pandemic is people were going live on Zoom, adding, they’re adding the PayPal link to the actual zoom platform, there are no controls. And we wanted to give back to the talent, we want to give back revenue to the talent. And that’s why we came up with this, you like the gig economy, meat streaming, you go live today, you get paid tomorrow. And, we’re not necessarily going to make lots of people millionaires, but what we will do is make millions of people a great second great income, doing what they love on a platform that rewards them fairly.
And the product looks tidy and well designed. And in terms of what I can see, you have here as awesome looking good as well. So, tell me about how you’re going about building this. Do you have a technical background? What type of team are you working with? And again, perhaps part of that conversation, perhaps is the resource base, which is did you get external funding? Is it you?
So, yes, when you build a platform, you obviously need to speak to the people who are going to be using it so. So, it’s very important for us to know to build to listen to our, to our audience, listen to our users, and listen to our creators, but my co-founder is a guy called Craig Gardner. And he is an experienced user with brilliant design, user experience, and customer journeys. So, he takes care of all that, that kind of side of the business because you can have the best platform in the world. If no one can use it, it’s useless. So, we’ve been very, very pedantic on creating a platform that works well easy to use functionality that it’s very, very simple to go live from. And before we did anything with the focus groups, focus groups were the people that are going to be on our platform, people, focus groups for the people that are going to be on our platform, but viewers and just really understood the kind of the mentality of it because people are used to going live with a click of a button with Facebook Live and Instagram Live and stuff. So, we wanted to create that kind of user experience that takes the best out of Facebook the best out of this platform, because maybe remove some of the other pain points that people don’t use. So, as I say, this hasn’t been just built in a day or designed in a day. It’s been built over speaking to lots and lots of people about what they love, what they don’t love and other platforms and listening, learning and basically creating a platform that is fit for purpose for lots of different kinds of use cases.
Yes. So, do you have an in-house team of developers working on this? Is it like an external agency? Because I think that’s like a big part of building a business like this.
Yes. So, we’ve got a small team of developers in-house. But we didn’t build this platform from scratch. So, we’re using a development company that lives and breathes streaming. One of our partners in the business that is a medical is a guy called Ben Lavender. Ben Lavender founded BBC iPlayer. Very experienced. it’s probably the veteran of streaming. He created the iPlayer way before anybody else even thought about streaming. So, we didn’t,
I had interviewed Anthony, who was running Seed. He told me he was in the core team that built the BBC iPlayer. Maybe they’d have to get there for a while.
Yes. Honestly, they Seed Legals. Yes, he did, most involved in the conceptual of it. I think more from a commercial standpoint, where Ben was more of a technology stack. But the point being is, what I’ve done with my business stuff brought in lots of different advisors and the different kinds of areas that I need to explore it. I don’t know everything, my partner, Craig doesn’t know everything. So our three pillars really are investment, tech, marketing, and kind of like in industry in music and talent agency. So, we’ve got a really good board of people that we can go to ask advice on whatever we’re looking to, obtain advice on. But going back to the text, and we really spoke with Ben understood, exactly understood our requirements,and we scoped it out. And we decided to use a technology company, as I said before, that really believed in breed streaming. And we’ve built a great platform by bringing lots of different components together. And we’ve got apps to come in, we’ve got TV apps coming at the moment, you can go live on your mobile or web. And then we’ve got an in house team that works with our development company, as well. So we’ve got the best of both worlds on that front,
Jumping onto a different topic, which I think is… I tried to make a habit of touching on this point, because I think it’s a key part of becoming an entrepreneur. How do you think London as a city could do better as a hub for entrepreneurs in your experience?
Well, I mean, it’s a tough time at the moment. It’s very hard at the moment to launch a business that there’s a rising energy prices, interest rates going up, there’s the pool of investors potentially, is probably going to go down. But that it’s not a bad place to launch business vibrant, there’s lots of new, exciting companies coming out of London. The government have launched, really innovative schemes that EIS to help investment and help investors into new startups, which is a good scheme. It is a great scheme that, does limit the amount of exposure an investor is going to have on any investment, and, should that investment fail. Not only you’re gonna get the event that some of the initial. I think it’s footfall too, but depends on what you if you’re SEIS, EIS, but a big percentage of that’s going to come back. And if the business doesn’t fail, does fail, you get even more bad your spouse owes us probably 40% when that’s something the government put in place, which is, is really helping start our businesses in the technology space. Get funding, go live, and actually create some great technology businesses. It’s not easy. But it’s about never giving up, always, continuing to focus on what you believe in and what you believe your business should do. And if you’ve got the right business, you’ve got the right mentality, and you don’t give up, you will find funding and you will succeed. It just might take a little bit longer over the next nine to 12 months.
I mean, I think London has amazing potential as a startup hub., because it has access to a certain amount of talent, it has access to capital, it has a vibrant atmosphere from co-working places, to accelerators, to incubators, and everything in between.
Totally agree with you.
You can find co-founders. A lot of great things are going for London. But at the same time, over the last three, three and a half years since we’ve launched startups of London, this is an area we’ve been mega exposed to. I think it could be… I would say it’s perhaps fulfilling 20% of its potential it could do. I think it is 5x, 10x better. And I think the way to do that would most likely go through something of a perception about what an entrepreneur is. And I would like to ask your thoughts on that. How in your experience… First of all, do introduce yourself as an entrepreneur right? That’s kind of the question and let me share a quick story before we answer this. We were at a comedy club a few weeks ago. And we had to sit in the front row because all the other seats were taken. And I was just hoping they don’t ask me what my occupation is. Because I just don’t want to say I’m an entrepreneur. Because whenever I say I’m an entrepreneur… I don’t say that often. Because I get a few negative reactions. But I know it’s going to be the butt of the joke, right? And it’s not just an environment where it was okay to make jokes like a comedy club. It is the perception is, in my experience, not that positive. It goes, somehow I feel entrepreneurs were seen as heroes back in 2005, 2006 up to 2010. And perhaps if you’ve used data, and then they’re kind of figures that are vilified in a way, right? People think there’s something phony with it. People think that you’re kind of this dishonest, sleazy person who somehow stole their way to the top or some other thing. And I think that’s quite damaging for the ecosystem and people’s enthusiasm to become entrepreneurs. And this perhaps goes a bit with the British skepticism that beloved, but perhaps we are overdoing it a bit. I don’t know, do you introduce yourself as an entrepreneur? How do you think you procide with it?
I would never introduce myself as an entrepreneur. But obviously, I think a lot of people may name people as entrepreneurs, but not actually named themselves as one. I think is a little bit… I don’t know if the word arrogant is the right word. But if someone said to me what do you what do you do, I wouldn’t say I’m an entrepreneur. I’d rather say, I’m a tech innovator. I try and think outside the box and create products that, are different and slightly that have great longevity. I wouldn’t say I’m an entrepreneur. I suppose I am an entrepreneur. As an entrepreneur definition of an entrepreneur or somebody that has their own, that comes up with concepts, launches, businesses, raise funds, and hopefully exit businesses. But I would never classify myself. If someone asked me as an entrepreneur, rather, CEO of a technology company, and I love innovating businesses for technology. But it is kind of a bit of a funny word with some if someone did if I did meet somebody, and someone said, I’m an entrepreneur, it doesn’t really describe them. What is an entrepreneur? Is it tech is it, there’s so many different particles of being a good description of what who you are as a person. I would love to be called entrepreneur by other people. But I wouldn’t be called up, I wouldn’t call myself an entrepreneur to somebody else in a room, and especially not in a comedy club.
Just asking for it. Yes.
But going back to the point where you say, I’m the CEO of a tech company. I mean, the perception around that used to be more positive, don’t you think? It kind of has changed in the last last few years? Are you feeling that I’m going back back to my previous point. You might disagree with this, I would love to hear your thoughts. But basically, I’m just trying to understand whether you also think, a change in perception for diverse around tech key, tech CEOs, entrepreneurs, whatever you want to call it?
No, I’m not saying that at all. Actually, I think, that’s what my role is, I’m the chief executive officer of a technology company. I mean, I am what I am. And that’s what I am. So many people are turning their noses up, when you say, I don’t even know. I don’t even introduce myself as a CEO. Who am I? I am Scott Green. I’m running a company that’s hopefully going to change millions and millions of people and help millions of people earn good revenue on a streaming platform. That’s why, a CEO, an entrepreneur, a tea maker, whatever I have. I’m a team player. There is hierarchy in my company. I’ve got, 15 staff rule in a mission, all together to help all these millions of creators and get my hand stuck in. I’m not this person that I’m the CEO, so I can’t do that. There. We were in the… We’ve got a great opportunity. We got a great business. We’re getting great feedback. And we’re all in it together. And I am Scott Green, did this happens to be running a company in the creative economy space?
I think that’s a good way of putting it. Before we wrap up, Scott, are you hiring anyone? Because sometimes people from our audience reaches out to our guests, if they’re hiring for open rules.
We are always hiring. We’re always looking for amazing talents. We’ve got a fantastic team in-house. We’ve got developers. We’ve got user experience people. We’ve got design, and we are looking for people that can help us or bring in talent. We are working with lots of really talented muse, labels and artists and talent companies. So yes, we’re always on the lookout for talented people that can help bring people to our platform. We’re not just music or education or fitness, we do podcasts we do cooking. So always looking for new talent. We’re just also looking now to we’ve closed our A while ago, our kind of seed round, which was in September 2021. Because time goes, and now we’re looking, we’ve had a few approaches from some investment companies about are you interested in moving forward to a Series A, so we’ve now decided that we’re moving forward to a Series A and we’re going to raise some more funding to be able to deliver on our on our beliefs, and also spend more money on building our brand building marketing campaigns, getting more people on the platform, doing some really strategic marketing deals. So if anyone’s out there, they’ve got, a fund or they love my business, and they really passionate about we are about the crater economy, and actually how unweighted it is for so many people, please get in touch with me, because, this is an exciting three years ahead for us. I think that the space we’re entering is, is big, there’s huge growth, there’s huge room for challenger platform like lounges that can come in and take some market share. And we’re seeing that now, because we’re keeping, we’re getting a lot of signups to our platform. So yes, looking for, just to summarize, looking for people that have got, a great talent that wants to come into a business like mine, they can see themselves fitting in, please reach out to me. And if anyone is looking to invest in a in a challenger, credit, creator, economy platform, then again, love to chat.
Scott, thank you for everything that you’ve shared. I would like to end on a note about the market dynamics here for other entrepreneurs, their tax startup founders who might be interested in this space. Yes, there is a lot of competition there is this trend of we’ve never talked about it in this chat. But you might have heard of it before, which is the core what they call like, bundling, and unbundling, like the swing of a pendulum with with most of the content creation type of businesses. And I think we are at the cusp of another unbundling because a lot of people are consuming content as well, yes, there are more content creators, more so than there has ever been. The same could be said for for for the amount of time, we spent consuming content looking at screens. And there is a lot of optimization to be done there. Because we want to be able to be paid either way, right? We pay with with our time we pay a subscription fee to a service. And I think that barrier has been broken. There was a time where people used to say, Oh, am I going to pay for something that I’ve watched on the internet? No way. We remember that. It was like eight years ago, even that
There is still the same mindset in my head. Lots of people say to me why should I pay for the content? I can watch it for free? That’s what we’re doing is that there’s a lot of short-form content exist in the marketplace today. Lots of tick tock tock to small quick stuff. The century before is we’re not saying to our graders don’t continue to create short form content. But when you want to create good content that does warrant some pay a paywall? Rather than doing a three minute song, why don’t you do a concert? you’ve got audiences. People are willing to pay for good-quality content. It’s proven. Look at Netflix, or candy people have signed up to watchthe Megan and Harry thing is never, there’s 16 million people that are watched it. but what is also happening is just subscription revenue is declining, because people are finding it hard at the moment with having you’ve got your Netflix, you’ve got your Amazon Prime, you’ve got, all the other direct debits you have. And what we’re seeing is there has been a decline in subscription revenue. People are cutting down on stuff. And so a lot of the research we’ve had is people want to walk pet people want to pay for what they want to watch, not what they don’t want to watch, and so this is why there’s micropayments that we’re doing watch this for a pound and watch this for four pounds or that people are this, I think that there’s going to be big shift in into scription versus pay per view.
Indeed. The direction or the trajectory of all these habits are amazingly important and I think they’re pointing in the right direction. Joining the chat is for it.
Thank you so much. It’s been a pleasure to meet you as well and I wish you a great Christmas.
Thanks, Scott. You as well.
Thanks for reading.
-SoL Editorial Team