I had a chat yesterday with Floobs’ Kai Lemmetty, one of the co-founders about their company and how it has evolved over the last 6 months. I have no strings attached here financially or otherwise, but I was impressed the steps this company has taken since we first wrote about them back in October 2007. The new business is a lot more service oriented and the money does not flow in from technology as the idea was before.
Along with the new transformation of their business, they have opened up a new service called Floobs WebTV. This is the new service that they will officially launch on Monday and we managed to get a sneak preview on it. The service works in such a way that there are two major segments they are targeting with this; premium users and the mass market. Premium users in this case are football teams (I’m not talking about your sunday team, these guys are after the elite of the sport – more later) and the mass market includes those who can settle for fewer features and are happier with simpler services.
So what is the service then all about? It’s basically a tool for video distributors to manage and distribute their content in an orderly and controllable manner. It seems that the major difficulty for brands in general is that they have no control of the content that is published on them (one of the reasons actually why UGC is so strong). Secondly, the business side of things is also important – not many brands have an effective way to capitalise on their content when it’s distributed all over the web. Floobs WebTV will try to tackle these two challenges.
Kai also told me that they are simply concentrating on getting new users on board and outsourcing all the other aspects of the service. For example, if you have a successful video stream you can capitalise that with your own advertisements (and keep the money). In this case, Floobs will take a 15€ CPM commission on the marketing. Seems high, but those who are affiliated with video advertisements know that they sell for a lot higher.
Regarding the business side of things, Floobs has finally started to pour in some cashflow as well. To be honest, I did have my suspicions at times, but this assortment and approach seems very natural. It could prove to be the homerun for these guys. I also talked to Joonas, the other co-founder and he mentioned that they’re expecting to break even at the end of 2010. Floobs currently staffs 6 people in sales/marketing and 6 in development on top of the 2 founders. Despite looking at breaking even in a little over a year, Floobs is looking for another round of investments from Finland, Germany and Spain.
I promised to talk a bit more about their customers later on so here goes. I was surprised to find out that their service has been very well accepted in the Mediterranean countries – Spain and Italy to be specific. In Spain, Floobs streamed the huge show put on by Ronaldo’s transfer which was viewed by more than 250 000 users. Furthermore, they have a good sales team focusing in the Benelux countries as well as Spain and Italy. This has paid off in deals with organisations such as La Liga and Sevilla FC.
I’m really seeing a lot of good in the restructuring the guys have done in the last six months with their business. Why? They have managed to include a lot more sales and marketing people with good results in their organisations and secondly, the business is really scalable in this form compared to simply being an “internet video service” (ie. a YouTube copycat).