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5 Questions With Ellation’s Eric Berman on the Importance of Aggregation in a Saturated OTT Market

He also discusses why is exclusive content a necessary next step for VRV

Eric Berman is the head of business development and content partnerships for Ellation’s audience-focused subscription video on demand (SVOD) channel aggregation platform, VRV. Available across all major connected-devices, VRV offers fans a next-gen entertainment experience featuring premium SVOD channels including Crunchyroll, Funimation, NickSplat, DramaFever, Rooster Teeth, Shudder and more.

Before the launch of VRV, Berman lead distribution and strategic partnerships for Ellation’s platform Crunchyroll, the world’s largest streaming destination for anime and manga, growing the business from 250 thousand subscribers to over one million subscribers today.

Prior to joining Ellation, Berman worked at Hulu for four years where he oversaw the Hulu Plus living room distribution strategy from inception, growing the business to more than 5 million paid subscribers.

We caught up with Berman to discuss the importance of aggregation in today’s over-the-top (OTT) market, which encompasses 200 services in the U.S. alone. The industry veteran also discusses VRV’s recent partnership with Nickelodeon, and the growing importance of original content to his company’s growth strategy.

VideoInk: Why is the aggregation of OTT channels so important?

Eric Berman: Over the last few years we have seen a dramatic influx of new OTT experiences coming to market, be it free AVOD apps, niche SVOD services and now Virtual MVPDs — thus, we continue to see cord cutting and digital video consumption rise year over year.

While each new service increases the overall OTT marketplace and content availability, they also add to the complication of the jigsaw puzzle that is the OTT app ecosystem. Each new app/service brings exclusive content to recall/associate to each service, unique device distribution or non-distribution, a new set of features and user experience to master and, everyone’s favorite, a different login/password/payment info to remember. Aggregation helps solve these issues.

In addition, we are seeing more and more OTT channels not make it. Especially for “niche” services. There is a theoretical maximum limit to the potential audience, and more mature OTT apps — two-plus years and older — know this well. At VRV, we believe aggregation is a step in the right direction, and we are seeing many major players push on this from Amazon Channels, Apple’s TV App, and even Roku. However, we’re taking things a step further by jumping into the next phase of the value chain: the bundle value. Not only are we aggregating premium channel partners and curated fandom content, but for $9.99 per month, you can access all the content and channels on VRV — over $50 in value if you were to subscribe to each service individually. We hope we can win over consumers with our focus on their desires, their world, and the simplicity of one experience for a value they can’t find anywhere else.

VRV recently partnered with Nickelodeon to house NickSplat, the network’s OTT channel for its older cartoons. How did this partnership come about and what made VRV decide it was the right fit for its audience?

We have two goals for the content acquisition strategy for VRV. First, we are looking for ultra-premium narrative, character-driven series. Second, these series need to elicit a strong emotional reaction from our fans. Working with Viacom, our plan was to lean into the nostalgia factor of classic Nickelodeon, and all the characters and stories our users grew up with.

Through our internal research, we know the median age of our community is 26, and we know our core user-base grew up watching Nickelodeon. From a business perspective, we see an opportunity to work with traditional players who are anxious to get into the direct-to-consumer base and help them use their large library and amazing skill-set of creating premium content, to maintain and grow their brand for a digital-first, cord cutting, or cord-never audience. We are able to incubate OTT channels for these partners using the VRV platform, leveraging our SVOD know-how and, more importantly, our engaged, young and passionate audience who is willing to pay for quality content.

VRV currently houses over 10 SVOD channels on its platform. How do these partners benefit if traffic is landing on the VRV platform rather than their O&O platforms?

Our goal for our partners is to always add an additional, new, and unique audience to their channel offering. We are very aware that the hardcore fans will and should go to the channel partner’s O&O so they can enjoy special features or the unique benefits tailored for that audience. We understand this very well, as we also own and operate Crunchyroll.

VRV is a great place for broader audiences who might enjoy one show from any of our individual partner offerings, but not enough to pay or remain a paying subscriber to a dedicated niche service. Because VRV has a more broad approach to fandom with a robust content offering, we have found that these subscription fundamentals prove to be very strong. We are also able to take a unique approach to the channel on VRV versus what is possible with the O&O.

For instance, with DramaFever we promote the fantasy and adventure content on VRV over love stories — which are more popular on the O&O — because we understand that these genres may resonate more with our audience. In addition, all of our partners benefit from our distribution, especially when it comes to living room devices. We have great relationships with not only the major streaming players but with gaming devices like Xbox and Playstation where many of our partners do not have app experiences.

On VRV, consumers can sign up for an individual SVOD service for anywhere from $3-$7, or sign up to all of the 13 services housed on the platform $9.99/mo. The monthly cost almost seems too good to be true. How does this price point benefit both parties?

Anyone who has been operating an SVOD for two-plus years truly understands how difficult this business is. We all wake up each morning thinking about that next big content deal, the next feature product launch, marketing promotion, or simply what tweaks we can make to limit churn rates by fractions of a decimal point. It’s a day in and day out business, and the worst thing that can happen for a subscription video service is to stall out.

When partners join VRV, not only are they able to access a new audience but we provide guaranteed revenue commitments for participation in VRV Premium. This allows our partners to obtain an additional line of revenue that they can invest back into their offering and into creating new content, which continues to fuel the business forward and benefit consumers.

Ellation recently launched an original content studio that will create programming for Crunchyroll as well as VRV. Why is exclusive content a necessary next step for VRV, a platform that focuses on the aggregation of OTT channels?

We are incredibly grateful for the content our partners bring to VRV. We have had both exclusive content and exclusive channels premiere on the service since launch and we continue to see the value of exclusive content from a brand awareness and growth perspective. It would be tremendous if there was an OTT channel for every content category we feel we need to fulfill on VRV, but that is still coming to be. The most important thing for us is to do right by our fans and deliver the best content experience we possibly can.

In addition, the best thing we can do for our partners is grow the VRV user base, and, in our industry, originals and exclusives continue to be the main value proposition for OTT. Lastly, you are not truly a media company unless you are making your own content. Our long-term vision is to expand VRV much further beyond video, and in order to do that it is critical you own IP and have the flexibility to leverage that IP in a variety of ways to the benefit of your fans, be it merch, games, events and more. We are aiming to deliver on that vision for our fans, to be a full 360 experience and to fulfill all of their content desires, beyond just video.