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- NextUp Comedy, HistoryHit and Paus are up-and-coming Netflix challengers, offering curated content in three different niches: standup, history documentaries and independent cinema.
- The streaming services industry is expected to be worth more than $30 billion globally by 2022, according to research from PwC.
- Speaking to Business Insider, the three firms revealed how they planned to build loyalty among subscribers by tapping into more specific niches than streaming giants like Amazon or Netflix can offer.
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For the better part of the last decade, Netflix has been the undisputed king of the online streaming world.
Big budget challengers like Amazon Prime, Disney+ and Apple TV are still trying to dethrone the on-demand behemoth.
And a feisty cohort of specialized challengers are nipping at the giants’ ankles, each steadily building a following by tuning into viewers’ more particular interests.
NextUp offers standup comedy, Paus curates independent cinema, while HistoryHit’s clue is in the name.
According to professional services firm PwC, the over-the-top streaming market will be worth more than $30 billion internationally by 2022, meaning even a smaller slice of the pie could be lucrative.
“Niche works,” proclaims HistoryHit cofounder Justin Gayner, previously a producer on BBC quiz show QI.
Regardless of their differences, this mantra is a recurring theme among the challengers: smaller, better-tailored content for a specific audience could reap massive benefits when distributed on a global scale.
Business Insider sat down with the CEOs of NextUp, HistoryHit and Paus to get a sense of where the industry is heading…
NextUp Comedy wants to tap into audience love for standup specials
NextUp was founded in 2016 by the comedy-loving quartet Daniel Berg, Sarah Henley, Kenny Cavey and Stuart Snaith.
Their startup was born out of an earlier passion project: a YouTube channel documenting the UK comedy scene, featuring standup sets and interviews with a range of up-and-coming acts.
But the team noticed three key problems: fans often couldn’t attend their favorite comics’ sets, comedians were reluctant to put their lovingly-crafted sets online, and what was available on TV didn’t reflect the diversity of the underground scene.
They set up their first office in a derelict building in southeast London, where cofounder and CEO Daniel Berg once arrived to find a pigeon had left its mark on his keyboard.
“That was a bit of a low moment,” he told Business Insider.
Since then, the startup has been backed a string of angel investors, found a new office, and is currently seeking backers for its Series A fundraising round.
In its own words, NextUp seeks to right these wrongs by offering fans an easy way to access a broader range of standup comedy, while offering comedians a financial incentive to share their work online and reach a larger audience.
The firm charges subscribers either a monthly or annual fee, the proceeds from which are then split down the middle. Half goes to NextUp, while the other half is divided up among acts on its platform, based on the number of views they have received.
Berg, who has previously won a BAFTA for his writing work on Cartoon Network series The Amazing World of Gumball, said he thought of NextUp as a “digital comedy club”.
“The annual fees are obviously a more reliable revenue stream for us, so we want to make it feel like a society that you would be happy to pay once-a-year for,” he said.
“We try to give our customers as many benefits as we can, so discounts to live comedy gigs, ‘fireside chats’, that kind of thing… There’s also a voting tool on the site so they can tell us what acts they’d like us to try and get on the platform.”
The team hopes they can tap into the demonstrable demand for standup specials online. (Netflix reportedly paid Dave Chappelle $60 million for three sets.)
“Just think, we’ve got the Edinburgh Festival just up the road, the biggest arts festival in Europe,” Berg said.
“Every year, hundreds of comedians descend on this little town, win dozens of awards, and then their sets are never to be seen again.
“In terms of taking a national cultural event and documenting it for everyone to see, we’d love to do for Edinburgh what the BBC has done Glastonbury.”
HistoryHit says it’s already profitable by serving niche audiences
Founded in 2017, HistoryHit is the brainchild of co-founders Justin Gayner, a serial entrepreneur and broadcaster, and Dan Snow, a popular historian and TV presenter.
With a back catalogue of documentaries on everything from the Roman Empire to video games via the Victorians, HistoryHit bills itself as a platform for those who truly love history.
“There was a feeling that some of the more mainstream outlets had…lost their way,” says Gayner, previously the producer of much-loved BBC quiz show QI.
History, previously known as The History Channel, was once the go-to network for historical documentaries and related fiction but has been criticized for moving towards reality TV shows, such as Pawn Stars and Ice Road Truckers, and for promoting conspiracy theories.
Gayner launched successful online comedy shows with his own ChannelFlip Media company in the late 2000s, including David Mitchell’s Soapbox, Harry Hill’s Little Internet Show, and Robert Llewellyn’s Carpool, which was later adapted into a successful TV series.
He says the purpose of his latest project is to “super-serve the superfans of history”, adding the two words that have served as the lodestar of his latest project: ‘niche works’.
“There’s no chance of anyone in the UK matching the budget of Netflix or Apple or Disney,” he says. “But we can spank their asses on niche: judo, flower-arranging, dog care – you name it and there’s an audience out there for it.”
Much like NextUp, Gayner believes building a sense of community is at the heart of turning such highly-tailored platforms into a success. The platform has its own podcast, and will soon offer holiday packages to sites featured in its programming.
Unusually for a startup in such early stages, HistoryHit is already profitable, according to Gayner, and is now in the market for a Series A fundraising round, which he hopes will reach between £5-£10 million ($6.5-$13 million).
Paus wants indie cinema lovers to tip for each film
While only officially registered six months ago, Paus founder Rishi Kapoor spent the prior year conducting interviews and focus groups while figuring out how best to make a success of Paus.
A veteran of a number of major streaming outlets, Kapoor has previously either worked for or with Universal Studios, iTunes, Google Play, Disney and the BBC.
After spending years building his resumé, he decided there was a gap in the market for a service that would provide audiences with independent cinema, which has faced financial pressures from the increasing tendency of studios to prefer surefire blockbusters.
“Of course there’s a place in the world for that, I love big action movies as much as the next guy, but you don’t want lower-budget stuff to get squeezed out,” says Kapoor.
Paus’ funding model sets itself apart from its contemporaries: Rather than charging a fixed monthly or annual rate, users will be free to watch whatever they want without charge – but will be prompted to leave a “tip”, as low as 30p (around 39 cents) with no upper limit.
Kapoor cites Radiohead’s “honesty box” experiment with the band’s 2007 album In Rainbows, in which fans paid whatever they wanted for the download, with most paying $6, as an inspiration. He said 20% of that tip will go to Paus, while the rest will go to the filmmakers.
Following a successful seed funding round, the firm is set to launch its Series A round in earnest, which it hopes to wrap up within the next six months.
The site will launch on March 17, with more than 100 short narrative and documentary films, with selections curated by the Raindance Film Festival, one of the biggest in the world, and the London International Animation Festival.
Disclosure: Mathias Döpfner, CEO of Business Insider’s parent company, Axel Springer, is a Netflix board member.