Artificial intelligence firm ZoneTV has reached 38 million homes since sliding into a market some 15 years ago where still today it has virtually no competitors, providing a platform for turning online video content into personalized channels for linear TV viewers. On the face of it, this seems like a risky venture, swimming against the tide of video trends, but ZoneTV claims it is more than prepared to adapt to the eroding pay TV landscape.
ZoneTV CEO Jeff Weber, who learned his tricks as an executive at AT&T, explained to Faultline Online Reporter that ZoneTV’s AI technology has been developed with cord cutting in mind, rather than cord cutting being a major concern, which is what we would expect from a company targeting the pay TV business.
Part of this is the belief that these traditional service providers are evolving and not going away anytime soon, so ZoneTV has found a safe haven by positioning itself as an OTT app delivering content to an operator’s set top EPG. The Canadian company has debated becoming a pure OTT app on numerous occasions, said Weber, and it could quite easily switch its business model to accommodate purely mobile platforms, but set tops are its focus for now.
Another key to success is the ZoneTV pricing model, which accommodates both sides of the equation as operators can bundle its 14 personalized channels into a pay TV subscriber’s bill for an extra $6.95 a month and then the operator and ZoneTV share the spoils, although Weber did not divulge the exact share. “This therefore works as a revenue grower, not a shrinker,” said Weber, suggesting that operators have little to lose. On the other hand, ZoneTV approaches online content providers with an offer to package up their content to deliver to a totally new subscriber base of linear viewers, and these providers then receive payment based on viewership, as well as reaching millions of new homes. This model is probably best described as bringing a curated YouTube-type experience to set tops.
Its 14-channel product package is called Dynamic Channels, providing 6,000 hours of personalized live and on-demand content. The more a viewer watches, the more personalized it gets – so multiple viewers watching the same channel at the same time will each be getting a different line up of content based on factors such as time of day and even the weather. The AI technology works by processing metadata on the fly, so every viewer is different, said Weber, who also conceded that ZoneTV is new to the personalization game, so the software is being constantly tweaked. The platform automatically extracts and analyzes metadata to identify video genre and content sentiment, pulls topics from speech and text, translates captions into multiple languages and integrates subscriber analytics – eliminating manual processes which slow content curation and often introduce errors.
Weather is an interesting differentiator from the personalization and recommendation software companies we cover regularly, for which ZoneTV has partnered with three top unnamed weather companies.
The scalability of Dynamic Channels is untested, but is based mainly on whatever ZoneTV’s cloud partner Microsoft Azure is capable of processing. The company’s most successful channel called Santa Tracker has got ZoneTV into multiple pay TV environments, accounting for 28 million of its 38 million homes reached.
If we had one small criticism it is that other AI companies are under the belief that true AI and machine learning can only be achieved by building in-house APIs from scratch, while ZoneTV has built its algorithms on top of the Microsoft Cognitive Engine using Microsoft APIs. Although, processing personalized channels for tens of millions of homes realistically needs something with the brunt of Microsoft and its Azure cloud.
ZoneTV has bagged major contracts in the US with AT&T, Comcast, CenturyLink and Frontier, as well as Bell and Telus in Canada. Its key focus today is Europe where it claims to be delivering an initial experience for one “very large operator” in January.
Voice technology is an area we are watching closely here at Faultline, so ZoneTV told us that voice commands are supported through the operator, giving the example that a Comcast X1 subscriber can say “Santa” and its Santa Tracker experience will be displayed. Any operator that supports voice commands will also support ZoneTV products, including ZoneTV Dynamic Channels.
The technology ports to any number of middlewares and set top experiences including ActiveVideo, TiVo, X1, MediaFirst and MediaRoom. ZoneTV also recently collaborated with Ooyala to include full-featured workflow with operational and creative dashboards to allow editing, content review and metadata entry, but could not reveal if it won any customers through Ooyala.
ZoneTV is certainly in a unique position but it is by no means free of competitors. Wurl is one example, offering web content in a playlist format deployed on TiVo. Zone TV criticized Wurl for being “much narrower in program offerings, not powered by artificial intelligence, and does not offer a personalized viewing experience.”
Pluto TV is another in the space, offering a free ad-supported live streaming service that is only available through computers or apps. “It provides VoD content to viewers through its app in a linear fashion. It is not intended for cable and satellite operator distribution,” said ZoneTV.
ZoneTV gives off the impression of a start-up company, but was rebranded from ES3 around two years following a $4.1 million seed funding round led by Best Funds.