We visit the Broad Street, New York City offices of Toronto, Canada-based JumpTV on a Tuesday afternoon, walking past the New York Stock Exchange, down some of the most heavily guarded streets in the United States.
In what might be the most expensive real estate in Manhattan, a multilingual, multinational team is bringing together television channels from around the world for delivery over broadband.
The company’s offices are near a dense fiber deployment that carries the data of the city’s financial firms.
JumpTV moved into these offices in September of 2005, which was the year in which it pursued television channel partners. The offices has employees who speak many different languages, focusing on business in different parts of the world.
Now that it has 122 channels (and is still growing), the focus is on obtaining subscribers.
“Initially, we assumed that our direct to customer sales would be bigger than through ISPs,” says Tom Herman, JumpTV’s Chief Operating Officer. “However, now we’ve realized that ISPs can be a critical part of the plan.”
The company is talking to some of the world’s largest ISPs, but it is interested in working with ISPs of all sizes anywhere in the world. As JumpTV builds its subscriber base, the company is also building a base of distributors to help it take content from anywhere in the world and bring it to the target market, which is North America and Western Europe.
An ISP in a vital nation, such as Mexico or Dubai (of the United Arab Emirates), could defray its bandwidth costs by selling its unused upstream to JumpTV. The company would use that upstream to send that nation’s television content to JumpTV’s distribution points in the target market.
Herman says everybody wins. “ISPs can sell bandwidth to us at a 100 percent margin.” ISPs sell bandwidth they’ve already paid for but aren’t using to a company that will pay full price for it.
JumpTV uses a tremendous amount of bandwidth. “We use 100 Terabytes per month, total, for our channels,” says Herman.
JumpTV is also interested in working with ISPs that have a satellite downlink or that have access to one.
Part of JumpTV’s business plan is to deliver targeted advertisements to subscribers. “A Chilean subscriber in Detroit would see a local ad, not an ad for a supermarket in Santiago,” Herman explains.
Television advertising, Herman says, is targeted based on the demographics of an audience for a particular show. Programming delivered over the internet could provide superior demographic data, but the details have not yet been worked out.
The business of internet television
We ask whether the business delivers economies of scale. Herman says that it does at every level, from buying lots of bandwidth to multicasting a stream to many users to the encoding hardware.
Herman says that the company can deliver a white label product to the largest ISPs, but has also developed a hosted solution for smaller ISPs and for web portals. JumpTV expects to earn a revenue share from the product that ISPs offer, and expects its product to be part of a bundle delivered to specific expatriate communities.
“We would be happy not to do the billing ourselves,” explains Herman, when we point out that ISPs do not like to share subscriber data.
The business of culture
For our final question, we ask Herman what he teaches his company’s purpose is beyond that of making money.
“There are three reasons people are here,” Herman replies. “First, the work is interesting and fun. It’s international and multicultural, and the industry itself is on the cusp of a tectonic shift.”
“Second, many employees come from another country and are proud of helping people stay in touch. In fact, foreign governments also appreciate the ability to keep in touch with their expatriate communities.”
“Finally, it’s a rapidly growing, young company, and that makes it exciting.”
This article was first published on ISPPlanet.com.