I don’t usually rant, since we have a long way to go ourselves, but Pluto TV’s recent announcement of funding is a perfect example of how there is just too much freely expendable venture capital out there.
The only impressive number to come from Pluto TV has been the $13 million in funding that they received last month, and the big names on the list of funders. Everybody knows that TV as we know it is changing and that the future of TV lies on the web. People see Pluto TV, with the familiar grid of channels, and they think that must be the future that everyone is talking about. But if you look a little deeper, Pluto TV is even less sustainable than the current cable TV bundles.
Pluto TV is composed of simple YouTube Playlists. YouTube is a great source of content, but there’s a whole internet out there with so much more than that. When you’re that limited in what you can do, you can’t even begin to offer so much of what people want. No live events, no recent movies or TV shows, no network or studio content, no sports or concerts, no live as-it-happens coverage of anything. There’s only so many cat videos you can watch in one sitting, that’s why there’s no cat channel on cable.
If what Pluto TV is doing is worth $13 million, then Rabbit TV Plus will boggle your mind, easily worth 30 times that. Within Rabbit TV, we already have exactly what Pluto TV is doing. We’ve got live linear channels, schedules for which appear in a grid below the programming. But that’s just one small piece of what we already offer. In addition to that, we have a massive catalog of on-demand content of over 250,000 TV shows, over 100,000 movies, and over 50,000 radio stations, not to mention live events, games, music videos, and more, all for free. For what’s not freely available, we make it possible to watch on a pay-per-view or subscription basis. In addition to that, we also have premium pay channels, including those from major sports leagues. That’s why we say we’re “Everything Entertainment Everywhere.” We know most people write that off as just a slogan, but we intend it quite literally. Just in terms of content, if they’re pluto, we’re the sun! We have duplicated what cable TV brings you and much more, for far less.
The biggest reason that Pluto TV is going to have a tough road ahead of them is that they have a suspect revenue model. Their product is a complete freebie, with no ads, no subscribers, no revenues, no way to turn their viewers into paying customers or make a dime from what they’re doing. With no advertising, no ecommerce, nothing to upsell, their only plan seems to be accepting more venture capital. Compare that to Rabbit TV, which is a paid product. Each one of more than 3.5 million users it has is a customer, willing to pay $10 a year to be there, so that money’s already in the bank from the day they start using our service. On top of that, we have a plethora of ways to monetize all those eyeballs. In addition to the yearly subscription fee, we have targeted advertising on our guide pages, and we receive a commission from pay-per-view content and subscriptions purchased via our site thanks to affiliate programs with the content providers. I could go on, but the bottom line is that Rabbit TV is already a profitable product, before accepting a penny in funding, so we’re extremely confident in our ability to return on our investors’ money. More importantly, the content suppliers and networks keep 100% of their advertising or subscription revenue. We don’t get in the way of their earnings, but rather, we bring them more valuable eyeballs.
As for Pluto TV, it will take a lot more than slapping a few ads on the page to create worthwhile business. A closer look at Pluto TV’s traffic tells the whole story. As of today, looking at Alexa, their bounce rate is 78%, their page views per visit is only 1.24, and average time spent on the site is only 1.22 minutes. Basically people are showing up and leaving right away, which might lead you to question the quality of their traffic. Rabbit TV on the other hand, boasts over 11 page views per visit and an average time on site of 10 minutes, with just a 14% bounce rate; and realize that these users have paid to be able to access our site. Even with a paywall, we’re far outperforming a service that is completely free.
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