When I first started talking to Deluxis founder Chris Kaminski, his idea was to create a place for new channels of online content to appear. But things have changed since then, and Deluxis has even grander plans for bringing more channels of TV content online. It wants to create a new way for content providers to sell their networks directly to consumers, on an a la carte basis.
The idea behind Deluxis is that content owners — the big cable and broadcast networks — will be able to sell their content directly to consumers, allowing them to make more per subscriber than they do through existing cable partnerships. Rather than paying upwards of $100 a month for a bundle of hundreds of channels that users never watch, they’ll be able to purchase the five or six channels they actually want, paying for each individually. Of course, the downside is that each channel will be more expensive as a standalone product than as part of a bundle. Deluxis expects channels to range in price from about $2 to $10 a month, with most coming in at about $5.
In addition to a library of on-demand or “catch up” content from those content providers — much like what Hulu offers today — Deluxis hopes to have a block of programmed nightly primetime content. That way users will be able to just come home, turn on the TV, and watch primetime TV in the same way that they do with a cable subscription, rather than having to hunt through older episodes to find something to watch.
It’s not just working with the networks you already know about: the Deluxis model could enable niche categories of content — for instance, a 24-hour anime channel or a hard sci-fi channel. These are categories where the cost structure of the current pay TV system won’t work, but could become viable businesses online.
Sound crazy? It probably is. Kaminski says Deluxis is currently in discussions with a number of these companies, in an effort to get their channels on the upcoming service. But there have been any number of tech-oriented businesses that have tried to disrupt the TV model by creating a la carte packages of content. Over the years, the likes of Apple and Microsoft have been rumored to pursue such a strategy as they tinkered with the idea of creating their own online TV services.
So what’s Deluxis got going for it? For one thing, it’s not Apple. Deluxis might not have the industry sway of a top tech giant, but that also means that it’s not making unreasonable demands of content owners in terms of setting prices for channels or demanding a certain cut of sales when users sign up. It also means that any service which emerges from Deluxis won’t be tied to a particular device ecosystem or operating system or platform — the idea is to make its programming available on as many platforms as possible. It’s also not tied to a legacy business model or contracts like existing cable or satellite distributors.
Right now it’s working on convincing those content owners to become part of its virtual network on an a la carte basis. One reason they might think to do so is that the cable TV market is stagnant, with flat to negative growth over the past several years. There are concerns that more consumers could begin cutting the cord, or worse, that young college grads who aren’t used to paying for cable won’t start. In the same way that the newspaper industry was hit with a generational change in consumer behavior, the TV industry is faced with the prospect of a huge new group of users who grew up finding content online and not used to paying for TV. Letting them choose only the channels that they care about might be one way to get them to start paying for content.
In the meantime, Deluxis is launching a crowdfunding campaign to raise funds and to get users to show support for the project. By doing so, the startup will be able to fund development of its site and apps, and it’ll be able to prove user interest to potential content partners, as a way to get them on board. If it succeeds, users might finally be able to choose their own channels once and for all — we’ll see.