New Publishing Tech
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Q&A: Content Galaxy, helping publishers create subscription video-on-demand channels

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Content Galaxy is a new web hosting platform that gives authors and publishers a better way to earn money from their digital content, especially instructional, news, event, and special interest videos. The company’s streaming service helps publishers pool independently created videos into well-edited, flat-priced subscription channels and pays providers based on actual subscriber usage. WNIP talked to founder and CTO of Content Galaxy, Steven Asherman, to find out more…

Can you give us some background about your company?

Content Galaxy Inc. was founded in New York City in 2008 by a group of independent consultants who had worked together for over ten years building and improving large-scale web and corporate financial applications. By the time we formed Content Galaxy, we had also developed a collection of reusable software components for building high performance, enterprise and SaaS database applications. Our customers included the U.S. Government, Deutsche Bank, Fidelity Information Services, HP, Marsh, Dealertrack, and other Fortune 1000 companies.

We held and eventually sold U.S. patents on our toolkit’s technologies for distributed computing, secure database operations across the Internet, and high-precision arithmetic. On the software sales side, despite years of continuous improvements, we saw first-hand how the movement to free made it progressively harder to sell intellectual property on any conventional basis.

Our difficulty making money from our own software packages got us thinking about the general problem of monetizing digital content in the Internet age. We thought there must be a better way to buy and sell media over the Internet. Eventually, this led us to develop our new kind of video monetization service.

What business problem is your company addressing?

It’s very hard to make money selling digital content. People have tried making content free and surviving on advertising revenues. Another approach is to sell digital content on an item-by-item basis, like loaves of bread. The most promising approach seems to be a subscription model, but how can publishers afford to acquire content, edit it, and market it, all at a price that is attractive to consumers? 

To keep subscribers coming back, publishers are under constant pressure to offer new content and become involved with a growing number of independent content owners. Inevitably, combining content from multiple sources raises thorny issues of fair compensation and trust, as well as the complication and expense of negotiating many contracts.

How is your core product addressing this problem?

Content Galaxy is providing a platform for building subscription video-on-demand channels that support a transparent and trustworthy model of revenue sharing. This innovative publishing service allows publishers to build profitable, subscription video channels by reducing content acquisition, marketing, and editorial costs.

The Content Galaxy system allows publishers to increase revenues by combining content from many independent sources into more appealing channels. Paying content providers, affiliates, and editors by actual subscriber usage (viewing time) avoids the need for sizeable up-front expense and risk. This model is especially useful for valuable, hard-to-monetize content such as instructional, news, and special interest videos.

Can you give some examples of publishers successfully using your solution?

We have created a proof-of-concept channel that tests the platform and confirms the business model. A world-famous Tai Chi master, William C. C. Chen, agreed to provide his videos as the initial content of a new martial arts subscription channel. This helped induce other independent experts to contribute their videos, and this channel has successfully secured a growing number of paying subscribers. All content providers and affiliates continue to be duly compensated.

What are the pricing details of your solution?

Content Galaxy is a software-as-a-service platform that handles the subscription process, streams the content, meters and reports on usage, and pays the publisher, content providers, affiliates, and, at the publisher’s discretion, editors. For example, a subscription to our Tai Chi channel is $29.95 per year, and those revenues are distributed to content owners and affiliates, with 20% going to Content Galaxy as the publisher and an additional 20% to Content Galaxy as the service provider.

What are other people doing in the space and why?

The subscription video-on-demand (SVOD) market was more than $20 billion in 2017 for the U.S. alone. The largest SVOD company is Netflix, with 2017 revenues of $11.7 billion (streaming plus rental). The leading video monetization platform targeting independent publishers is Brightcove, which had 2017 revenues of $155.9 million.

Most of the leading video monetization platforms include features aimed at offering viewers flexibility and making it easy for publishers to charge for subscriptions. What is lacking, however, in all of these systems is recognition of the need to address fair compensation of content providers, affiliates, and editors, especially when many independent parties are involved. This capability, unique to Content Galaxy, is what we regard as crucial to keeping the cost of acquiring content low enough to price subscriptions attractively.

How you do view the future?

We foresee growing acceptance of subscription digital content, within a model of revenue sharing based on metered usage. The need to incorporate content from many sources, without undue risk to the publisher, is central to creating a compelling value proposition.

For any revenue sharing model to succeed, transparency and trust are essential. While blockchain is often viewed as synonymous to cryptocurrency, blockchain is primarily about trustworthiness. We anticipate that blockchain ledger accounting will become instrumental in making a system sufficiently fraud-resistant to work for the largest publishers and the most valuable content.

Anything else we need to know?

If you are interested in finding out more about Content Galaxy, please contact info@contentgalaxy.com. We also provide consulting on scalable software-as-a-service and financial systems, as well as video-on-demand.

Thank you.

Photo by Jakob Owens on Unsplash

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