Rabbit TV is ready to make a big jump.
What started out as a video content aggregation service catering to cord-cutters wants to make the move to an a la carte model, convinced that major broadcasters will eventually agree to unbundle their channels to reach that demographic.
The two-year-old upstart believes it can create attractive offers to the likes of ABC, CBS, NBC, Fox and even premium channels like HBO because it can help them forge a direct connection with its audience of more than 3 million registered users.
On top of that, Rabbit TV announced late last month that it is prepared to pay broadcasters the per-subscriber retrans rate they’re being paid by cable operators in New York, the nation’s biggest market, and also apply that rate to all DMAs nationwide.
It all sounds like a daunting task. If you’ve never heard of Rabbit, you’ve got company. CEO William Mobley said the brash firm once considered printing T-shirts that read: “WTF is Rabbit TV?”
Before getting into what Rabbit TV wants to become (something akin to a virtual multichannel video programming distributor), it helps to first know what it is now.
Rabbit TV, a unit of a company called FreeCast that sells products through the Telebrands “As Seen on TV” direct-marketing realm, aggregates video, music, radio and other media available legally and freely via the Internet, coupled with access to a range of electronic sell-through services and subscription- based video streaming options, including a mix of international live TV channels.
It wraps all of that into an “eMedia guide” that helps users search and discover content across all of those sources. Rabbit TV sells the product, which really amounts to an Internet video guide that provides direct links to some of those sources, for $10 per year.
“We’re Switzerland,” Mobley said. “We don’t ignore services like Hulu Plus. We assume as a cord-cutter, you’re going to pay us $10 a year to get everything that’s freely available and well-organized.”
And the product itself is undergoing a bit of a metamorphosis. Rabbit TV started off distributing the service via a small, USB-connected device that limited it to PCs and laptops. It has since begun to roll out a new version of the service, Rabbit TV Plus, that features a refreshed interface and app that gives its users the ability to use the service on iOS- and Android-powered tablets and smartphones.
Mobley said Rabbit TV will stop selling the USB-based hardware product in favor of the new software-focused option, which the company will tap to expand beyond the U.S.
The company also is planning the launch later this year of an IPconnected box with a quad-core processor that will enable Rabbit TV to run its services, as well as an integrated browser, games and other apps, on television screens. Users will control the box, which will sell for $99.99, through an app or via a separate $30 remote with a built-in QWERTY keyboard. Rabbit TV also wants to cut deals that will integrate its platform with Internet-connected TVs.
LONG PLAY: A LA CARTE
Rabbit TV’s hopeful, longer-term plan is to offer feeds from major broadcasters and cable programmers through its platform. Its pitch is that Rabbit TV has already collected a base of millions of people who fall into that cordcutter bucket but also includes consumers who still desire access to channels like ABC and ESPN and HBO on multiple devices, and would be willing to pay a premium price for it.
“Just pay us our commission,” Mobley said. “That’s all we want. We’ll live on that. We’ll either buy it and resell it, or you [the programmer] can provide it in whatever bundle you want to the consumer. We are just bringing you the consumers who want to buy it.”
But it’s not clear how receptive broadcasters and programmers have been to Rabbit TV’s proposal. Mobley said Rabbit has been talking with execs “below the Clevel.” Those execs, typically tied to digital and online divisions of those organizations, are “getting through the smell and taste test of what we’re doing because most people originally think that we repurpose their content, and we don’t,” Mobley said. “We create the guide that sends the consumer directly to them.”
Those conversations have led Mobley to believe that at least one programmer would be willing to dip its toe in the water within the next 24 months. “The networks are beginning to research their options,” Mobley said.
Although facing an uphill climb, the good news for Rabbit TV is that cracks are starting to form in the old business models. Its customer base appears to share traits with the one Dish Network will target with its coming single-stream service, which has locked in streaming rights with Walt Disney Co. and A+E Networks.
Speaking on an earnings call last week, Time Warner Inc. chairman and CEO Jeff Bewkes said his company is open to over-the-top video service providers, so long as those deals are “additive” to its current distribution relationships.
But with a la carte access to broadcast and premium networks still a challenging and forward-looking goal, Mobley said, Rabbit TV is also looking to fill that broadcast TV gap by exploring partnerships with antenna providers.
Mike Farrell contributed to this report.
