The Chill lay offs and the low-cost content platform problem

Chill, with two pivots and three business models in the last three or four years, has had trouble finding its way as it’s jumped from content trend to content trend. While always video focused, the startup’s elevator pitch has gone from “Turntable for video” to “Pinterest for video” to, in its most recent incarnation, a video support platform based on the “Louis CK” model of selling direct downloads to consumers.

All of these tried to capture the digital Zeitgeist of the moment – be it social video, video curation or democratized video distribution – but none have really stuck. While the first two business model failures (Turntable for video and Pinterest for video) are fairly self-explanatory, the direct-to-video platform had, in my mind, stood the best chance.

But even that model hasn’t work as the company announced this week they were laying off staff.

Why?

As Brian Norgaard, the CEO of Chill, said in his email (via Pandodaily), the self-serve model didn’t work for everyone:

“We discovered that the sales/acquisition cycles around premium content to be somewhat inconsistent with our self-serve distribution model,” Norgard wrote in an email. “Premium content creators still want deep human assistance in creating sales, marketing and multi-window distribution plans. Our product is distribution centric and therein lies some of the challenges we faced in the marketplace.

In other words, there are only a handful of Louis CK’s who can easily sidestep the traditional model and are willing to monetize without a distribution deal on a traditional broadcast, cable or newer OTT network (like Netflix).

But the bigger problem, in my mind, is that direct-sales to the consumer for a platform provider like a Chill requires a fairly significant number of big content deals to survive their small skim off the top. If a Louis CK can sell a million or two in total concert videos at a $5 price point, that’s only going to come to peanuts for a platform provider who is taking a 5-10% take.

Looking at Chill’s list of creators, I certainly didn’t see any Louis CK’s on board. And at the prices Chill sells content, you’ll need more than a couple Louis’s to make things work.

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