ZillionTV Dies Quietly Lays Off Nearly a Third of Its Staff

ZillionTV died Monday.  They may not admit it, but much like Akimbo still refuses to admit it is dead, ZillionTV just hasn’t crossed over, but it’s lying dead on the table. 

Rallied by an overhyped Ben Silva, (overhyped is the polite word for the man who claims he won 7 Emmy’s but isn’t in IMDB ), Zillion Promised to be, IPTV, Music, game, shopping platform, and a social network, even a way for viewers to earn Zillion Bucks for free merchandise from Visa.  Controlled with a motion sensing remote, ZillionTV would have a catalog of movies which at launch would be the largest on demand library on the planet. A library made possible as result of leveraging the relationships Mitch Berman built as Regional Manager of Affiliate Operations of HBO’s Cable Distribution. 

ZillionTV Bar Ben Silva Mitch Berman But ZillionTV didn’t fail just because of the pedigree of its executives was far from amazing.  Lots of companies are founded by people with modest backgrounds.  ZillionTV failed because it was a company that was run buy people who didn’t understand the business they were selling.  Mitch Berman may have wanted to revolutionize TV, but admitted he didn’t watch much TV.  Favoring Three Stooges, to Seinfeld, or the more modern equivalent of the target demographic, South Park.  No company can survive if it doesn’t hire people who “ooze” of the vision, and march in that unified vision.  The major players at Zillion TV don’t come from Hollywood, and as a result fought at every turn to convince the studios that they weren’t idiots.

ZillionTV got farther with studios early than most IPTV startups because it did make the right choice to be represented by people who weren’t engineers.  But the shine wore off as its execs purported to be the answer to the Entertainment Industry’s fear that the Internet would cannibalize their market.

Unlike Hulu which spent lots of time working to meet the needs and demands of the studios before building a UI, or a Content Management System, ZillionTV tried to force licensing models, user interface and branding that wasn’t Hollywood compatible.  Rather than working with in the confines of the rules of the market and then slowly introducing changes, Zillion created animosity with the studios by telling them, they were dinosaurs and that if they didn’t join Zillion they would die.

Certainly there is some appeal to consumers with the “Zillion Vision” Free ad sponsored content, or pay content with no ads, or even better watch content with ads to earn credits to watch other content ad free.  But the reality is that IPTV Companies have to look at iTunes as a model for their growth.  When iTunes Launched it was DRM, tracks were sold at break even to a slight loss to Apple, with a revenue share that favored the Music Studios.  iTunes strategy was simple, gain market share, build brand and keep the Recording industry happy enough they wouldn’t compete.  A few years later iTunes is now DRM Free, and the revenue share is much more favorable to iTunes.  Apple had a planned evolution of the business model, knowing that they couldn’t change the minds of Los Angeles over night.

IPTV Technology is not difficult.  ZillionTV, Roku, even Xbox Live Video Market Place are almost identical implementations to Akimbo.  The pain points in the cost model are the same, set top boxes aren’t cheap enough, your box competes for space in the living room with other devices, and encoding content to your format is expensive.  Combine this with the challenges of licensing windows that make some titles go on and off from month to month and you start to see that the challenges of Akimbo 5+ years ago are the same problems today.

These challenges get amplified by the integration of studios with technology companies.  Sony Pictures are reduced on Microsoft’s Xbox, Apple’s iTunes gets a better set of content from Disney, these both create holes in content libraries from any provider.  Unlike DVD where all the studios produce content and anyone can sell it, and any consumer can play the content, in the IPTV space the content is licensed in very calculated ways.  Studios optimize their revenue by controlling when content hits each medium based on the amount of money they can make from the release to that medium.  Much like release to broadcast TV doesn’t happen before a Theatrical release, IPTV solutions make studios less money than DVD, and broadcast makes more than IPTV, as such IPTV gets the worst of the licensing windows, and the last swing at most content.

It is not that no IPTV company can succeed, but to the company must work in concert with the studios, be willing to take the time to evolve the business model, and not come from a company that brings any conflicts with the studios day one.  The product needs to be built on standards, so it can evolve and adapt with new device technology, and it needs to have a foundation based on user interfaces that both consumer and studios are excited about.

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Because of the added readers because of the coverage by Broadband reports and others:

Many people who aren’t my regular Audience may not know that I worked at Akimbo, many of us who worked at Akimbo are still good friends and went on to work at various places together.  Such as Microsoft IPTV where I went shortly after Akimbo, Galan Bridgman, and Tom Hammer (All seen on this page about Akimbo) joined me there as well.

I joined ZillionTV on promises of content libraries as thick as a phone book from tier 1 providers. “Every Disney Movie Ever Made”.  It took a while to sort out that, that was not the case, and I left ZillionTV nearly a year ago. If I could have placed many of the friends I had helped get jobs at the company in my new company (BlackWater OPs) I would have.

I now have relationships with the right people to help many ZillionTV employees laid off or looking to Exit Zillion so if you are one of those drop me a line on Facebook, LinkedIn, or if you have my email if you have it.  If not ask around someone can point you at me, and I’ll point you at some good lead.

-Brandon Wirtz