On SeeSo and OTT: Q&A with NBCU’s Evan Shapiro

Earlier this month NBCU unveiled the new ad-free streaming comedy channel SeeSo set to launch in January 2016. Targeting comedy super fans of all ages, the OTT service offers original series, live standup, an impressive library of classic content and curated comedy playlists from well-known comedians like Amy Poehler, Matt Besser and Dan Harmon. It’s the first big project from Digital Enterprises EVP Evan Shapiro just 10 months into the job. We spoke with him about SeeSo’s business goals, the OTT landscape and the service’s attractive $3.99 a month price point.

How do traditional MVPDs react these types of services? Do they scare them in terms of encouraging cord-cutting?

It’s interesting. First of all, you have to remember that I work for Comcast. And so all of the resources that are being [put together] to create this service are under the umbrella of a corporate culture that includes Comcast/NBCUniversal. Now I think that there’s a recognition that consumer behavior has shifted. It’s not shifting—it has shifted. I think you’re seeing a realignment of the industry around new business models…I mean, HBO [last week] came out pretty strongly and said, ‘look, you have to carry HBO Now.’

There are two issues there. There’s the business model issue and then there’s the technological issue. I think it’s more a question of the latter than it is the former right now. I think we’ll see MVPDs move towards reselling SVOD the way linear programmers do at some point in the not too distant future, because there’s an opportunity to do more business and grow their market base. First and foremost, right now it’s about trying to create the opportunity where the technology can serve consumers interests without creating too clunky of an experience…You’re going to see the business model change as the technology adapts.

There are so many SVOD services launching right now. Who will still be standing two years from now? Or do you think there will be even more services launched?

I think you’ll see a lot of services launch. Whether they’ll survive or not is yet to be seen—including ours, to be honest with you. Who knows in 24 months… in our current ecosystem 24 months is an eternity. You have to understand what the market opportunity is, and then secondarily look at who’s actually fitting that marketing opportunity versus who’s trying to be opportunistic and throwing money at the problem. The way I look at it is, you’ve got three major OTT aggregators in the marketplace and they are supermarkets—they try to serve all the people, all the time. And I think that is not necessarily where video will head.

Certainly the history of video, in this country at least, has been you start as a mass-market product and then eventually the market gets carved up into niches. And I think what you’re going to see is, much like what happened to broadcast in the ‘70s and ‘80s with the arrival of cable…I think the three major aggregators are going to do OK, but you’re going to see niche services come along. And by niche services I mean big, niche services, not the kind of super tiny niche services that I think are going to be challenged, but the big niche service where genre-based stuff will service consumers who are very passionate about the genre. And that’s why we chose comedy, and that’s the premise of SeeSo.

Did you feel like there wasn’t a place where super fans of comedy could go?

75% of the millennial generation say comedy is their number one genre. We did more than 10,000 interviews of at least 20 minutes in length with consumers who watch online, and 90% of those people who were most likely to subscribe to an OTT service said comedy was their number one genre. So that’s pretty close to perfect. That’s why we went with comedy. What we believe is that, much like cable, big niche is really the next generation of OTT services and so we went with the biggest niche we could find, which was comedy.

Will Comcast/NBCU look into other big niches if this is successful?

I think if this is successful, we’ll definitely be looking at other things. You’ve got to do the first part of that sentence first. SeeSo is a comedy channel that we’re launching in the next 90 days, and we have to prove that we know what we’re doing before we move on…So that’s the mentality we have right now.

Your library of content is deep—and varied. “Monty Python” and “Kids in the Hall” are more from Gen Xers’ time. Are you seeking to turn millennials onto those classics?

First and foremost, this is not a channel for millennials. This is a channel for comedy nerds. It’s a psychographic, not a demographic. We think millennials tend to be the most likely buyers because of the way they watch content and their interests in comedy in general. But when we did our research we researched ages 13-64. Secondarily, there’s a big nostalgia in the millennial generation. Good, classic comedy never goes out of style, just like good, classic music never goes out of style. We want to do big name, current comedians, we want to do up-and-coming current comedians, and then we want to go back to the heart of where this kind of comedy came from in the first place. That’s why we have all 40 years of “Saturday Night Live” in both long-form and short-. That’s why we have “Kids in the Hall,” but we’re re-mastering it in HD for the first time. That’s why we’re going with Monty Python—every piece of content ever made, and that’s exclusive. And we’re taking the time, the care, and the money to remaster the sound, remix the color, put it in HD for the first time in history.

It’s kind of like vinyl. Outside of the streaming services like Spotify and Apple Music, the fastest selling piece of the music economy is vinyl. And the biggest buyers of vinyl are millennials. So we feel that there’s a great desire to understand where the comedy came from in the first place. If you watch Monty Python, and you want to see it in pristine, new, HD for the first time, or you haven’t seen it before and you’re looking to discover it for the first time, we think that there’s an audience out there frankly between 13 and 64 who’s going to want to see it either again or for the first time.

Sounds like there’s a lot of money behind acquiring the content, re-mastering it, etc. Why do you go with the low price point of $3.99 a month?

We tested every price between a dollar and 10 dollars. And we did 10,000 interviews. We tried to find the best price that supported an actual business. And the major reason we chose this price was that the most likely subscriber for our service actually already has at least one if not two SVOD services. So they are very price sensitive. And we are not looking to replace another subscription you might have—not looking to replace your linear subscription, your Netflix subscription, your HBO Now subscription. This is a supplement, this is a complement—not a replacement. That’s how the most likely consumers looked at it. When they saw $3.99 they basically said, well, I like this kind of stuff anyway, this is a no brainer price, let’s give it a try.

So getting everyone on board is more important.

Any business wants to get to scale before you start to necessarily look to make a profit. And what we really want to try to do is get as many people on board as possible. But with any new startup there’s a horizon for breaking even, and I think our horizon is fine, and hopefully our bosses feel the same way. The idea is to pay back the money as quickly as possible but do so by serving—and serving well—as many consumers as we can. If we have a great business model at 18 bucks, but no one signs up, we don’t have a great business model.

Stand-up comedy is a staple for comedy super fans. Will you have much of it?

A ton of stand-up. We’re doing live stand-up specials once a month. We’ve got exclusive, original specials from Rory Scovel, Cameron Esposito, Matt Besser. We’re doing original exclusive stand-up every single day, between 3 and 10 minutes, stuff you can’t get anywhere else.

How is it curated exactly? Will there be comedy playlists?

It’s kind of that same record store mentality around vinyl. It’s staff picks. Our programming team here and on top of that our comedians—Dan Harmon at some point and other members of our comedy community will be curating as well.

Your comedy library is huge. Were there any challenges to putting it together?

Considering I’ve only been here 10 months and we’re ready to go in a little while, I think the answer is no. A great story: When we called the Pythons and asked why their stuff wasn’t on SVOD anywhere, they said because no one ever asked. So we said let us put it up—not only put it up, but let us celebrate it. And I think that gets to the size of the opportunity there. There’s a lot of great content out there. The problem is the paradox of choice and I get lost in it, I don’t know where to find it. That’s really the experience on a lot of these aggregation sites. We’re creating the opposite of that. Instead of the supermarket, we’re the corner café, with specials every day.