Television Business International

Join the QYou

Scott-ErhlichThe QYou is aiming to bridge the gap between millennials-focused short-form online video and traditional linear pay TV. Founder and CEO Scott Ehrlich tells TBI how the business model works

You can view The QYou as a bridge between the traditional pay TV platform and the world of online video and its creator-led channels, and for good reason, says the platform’s co-founder and CEO Scott Ehrlich.

“There are about 930 million pay TV subscribers worldwide, and short-form snackable online video has become the most-watched form on the planet,” he says. “It seemed odd to me no-one had made that connection.”

With this in mind, Ehrlich had been wrestling with one key question: if you remade MTV for today’s millennial audience, what would it look like? He was convinced the answer came from the online video world, and believes the industry is starting to draw the same conclusion.

“What has changed since we launched the company is platforms now realise this content needs to be part of the offering,” he says.

The QYou launched in October last year on the Beijing-based StarTimes platform with some of the biggest names in the history of millennial-age programming behind it: Ehrlich bridges the tech-content divide having worked at Real Networks and produced Hulu series The LXD; Curt Marvis was a former Lionsgate Digital president and Cinemanow co-founder; Les Garland was one of two original MTV executives; and G. Scott Paterson, a key early investor, is a Lionsgate Entertainment director.

The Dublin-based channel’s model relies on deals with pay TV platforms such as Deutsche Telekom and M7 Group in the EMEA region, offering high-quality, ad-free original short-form video of between two and six minutes as part of branded and hosted blocks.

The firm comprises editorial staff, who trawl through online videos for broadcast; licensing staff, who track down content owners and pay them; technology and broadcast engineers; and sales executives.

“There are other people aggregating content from the internet, but most of them are doing it on the internet,” says Ehrlich. “That’s a different business to us, and I think that is a challenge, because you are effectively challenging YouTube, who are really good – really good – at what they do.”

The QYou positions itself as partner for multi-channel networks that also distribute short-form millennial programming. “The MCNs role is to build business for their content creators,” says Ehrlich. “We’re a new revenue stream, so are part of the system to build those businesses.”

As a young firm, The QYou is not yet profitable, though it has secured three rounds of funding, with Ehrlich and Paterson among the internal shareholders, and Toronto-based financial firms including Clarus Securities, Cormark, Power One Capital and Primary Capital investing cash from outside.

“We have a diverse shareholder base that has a great deal of confidence with the team, and we’ve financed it in a way that allows us to maintain a lot of operating flexibility,” says Ehrlich.

Latin American launches are planned, as is further linear penetration in Europe, and a mobile app for partner platforms to offer subs has debuted.

Almost all of The QYou’s original programming is shot in HD, and increasingly, Ehrlich says, in 4K. Its 3,000-odd shows are divided into categories such as #Inspiring, #Comedy, #Mind-Blowing and #Action, creating a fully-cleared master rights library that its local channel feeds can use. Viewers can watch these as a linear broadcast, switch to different ones on-demand, or create their own playlists.

‘Q-rators’ – or hosts – present branded blocks, with plans for this to become more localised in different territories as the business expands.

Ehrlich says the channel’s model creates flexibility that allows viewers to “jump on” to a video and then “jump off” if another doesn’t interest them, constructing a viewing experience similar to watching MTV in the eighties.

He calls this a “powerful argument in our favour”, adding: “Research with millennials and why they don’t watch TV shows that they feel TV shows are a commitment.

To a certain demographic a half-hour feels like an eternity and becomes a barrier in turning it on, or subscribing, in the first place.

“We don’t quite market it as ‘no commitment TV’, but when I was a kid that’s what MTV was. You’d flip it on while you did your homework – you never felt like you had to. There doesn’t feel like there’s much in that space in linear TV now, even though linear TV minutes are going up. This could be something that fits that bill.”