Andy Meikle is a Hibernian fan. For those unfamiliar with Scottish soccer, the Edinburgh club are one of the oldest in the world, but also, it seems, one willing to embrace change.
It is not hard to imagine a certain sense of satisfaction when Meikle, founder and chief executive of Recast, persuaded his favourite team to join his fledgling video platform in February. In doing so, Hibs now sit alongside the likes of golf’s European Tour and the Velon cycling group as early adopters.
�� Head to Hibs TV and @recast_app for our chat with @joe_newell93 – fresh from signing his new contract.
�� The no-brainer deal decision.
�� The perfect blend in midfield.
✈ European aims.
⛳ A shameless attempt to grab golf freebies. We'll allow it. https://t.co/DvImWZux5G pic.twitter.com/o2Z3m9aBAU
— Hibernian FC (@HibernianFC) February 25, 2021
But what are they adopting? Unlike Sportlobster, Meikle’s most high-profile previous venture, Recast’s name actually offers an insight into its USP. A platform for publishers, Recast asks users to purchase token credits which they can use to pay for content. If that user likes it, they can ‘recast’ that content to their followers and earn a percentage of the credits paid for every extra view accrued via their share.
The model also flips the traditional video-on-demand (VOD) platform on its head. Brands who want to target users must purchase credits to remunerate those who watch their targeted content. Any video in a user’s feed marked with a green icon offers the chance to collect credit, and should they choose to 'gamify' the platform, by watching ads their Recast experience will pay for itself.
According to Meikle, around 50 per cent of Recast users it has surveyed would pursue this approach, with the other half happy to just micropay-as-they-go. Users can also earn tokens by posting their own videos, but these are deliberately capped to protect against piracy issues.
Returning to Hibs, as a partner publisher, the benefit for them is that for every content view they earn revenue. Fans can support the club via micropayments to watch interviews with new signings, archive video and other content. Each credit is worth UK£0.01, with publishers able to set the price for each piece of content. Handing over a cut to Recast, they can directly monetise video which they might have given away for free on other platforms.
Meikle initially conceived Recast as a platform for tier two and three rights holders, stuck between wanting to create their own over-the-top (OTT) platform and struggling to earn significant returns by posting content on social media. Recast can host live streams, handle scheduling, follower engagement and allow users to pay in advance for that content.
However, the in-app sharing functionality also lends itself to tier one rights holders and broadcasters looking monetise non-live content. With publishers able to set the credit splits for their 'recasted' content, they can tap into users to extend reach while monetising the video.
Tennis' ATP Tour, to take an example of a tier one property not currently on Recast, provides its players with content to share on their channels as it recognises they have far larger individual followings. On Recast, all the ATP would have to do is tag a player and they would be able to share that content while they both directly earn from it.
While at first it will roll out in the UK, there is potential for rights holders to use Recast globally in territories where they struggle to gain traction by slashing geo-set pricing.
In January, Recast was nearing the end of a UK£5 million (US$6.97 million) funding round, adding to the UK£1.3 million (US$1.81 million) it raised in February 2020, as well as its pre-seed backing. SportsPro spoke to Meikle (pictured below) to find out more about his plans for Recast.
How does Recast differentiate itself from other digital platforms in the market?
We’re well aware that social media is more of a marketing channel than a monetisation channel. In fact, I can't name them, but there was one rights holder who recently told us that they generated 575 million minutes of views on their Facebook content and only made US$88,000.
We're seeing many rights holders say, ‘I can’t sell my rights to a traditional broadcaster’, or ‘we're not getting the money we were hoping for’, and they’re forced to distribute on social. If that's not driving strong revenue they then ask ‘should we develop our own OTT platform?’ There are many, however, that simply can't afford to do that, do not have the expertise, or they've not got enough content still to fill that channel.
In terms of the product, we have our own in-app currency which operates the same as other in-game coins or loyalty programmes. However, the difference is if I ask you how much a Nectar or an Avios point is worth you wouldn't know. We are very transparent about one cast being locked to the value of UK£0.01 because people are earning it and spending it within the ecosystem. The reason we use the digital currency is to facilitate transactions around the world without the worry of FX. So if a rights holder wants to monetise a 20-second clip and make UK£0.02 a view, you don't have to deal with the FX from all around the world on every single UK£0.02 transaction.
The experience is personalised based on your preferences and those that you follow. Recast is a standalone platform and therefore we obviously have the challenge of growing our audience, but the way in which we do that is by incentivising everybody to invite others. So if we look at my experience with Sportlobster, we had many partnerships to get people like Ronaldo to promote it, but there was no further incentivisation to drive more people to it.
On Recast, whether you've got 20 followers or you've got 250 million followers you are incentivised to invite people through WhatsApp, Twitter or whatever it might be, because you earn 100 credits for every successful referral. So if a fan does that they're using these credits that you can then spend within the ecosystem, but for our partners it is a revenue stream because they can cash out the credits that they earn.
How does the micropayment system work?
The pricing is flexible and in the control of the publisher. We know the value of sports content diminishes as time goes on, so on Recast, let's take a live tennis match for example and say someone tuned in at the beginning and they paid 100 credits – so UK£1. It’s then not really fair for me if I tune in later and there's only a few minutes left to watch to pay the same price. So the rights holder is able, in real time, to adjust the pricing so that anybody who chooses to go in from that point is only paying for what they watch.
Can you explain the benefit of the ‘recasting’ element?
So, say if you have Juventus against Napoli – whether it was highlights or the live event – then on Recast 22 players could rebroadcast that content to their followers. The fans can recast it as well and immediately you have massive reach in the hundreds of millions, with the ability for people to pay in micropayments to watch that piece of content and that cost to be subsidised based on their engagement.
We had a call with the chief operating officer of a major sports broadcaster the other day who said this actually could go a long way to eradicate piracy. Why would you tune into some illegal stream if you can come to Recast, pay in credits that you earned or you're happy to purchase and then you can actually earn from rebroadcasting that content? You're taking away that linear single relationship between consumers and the TV and actually driving engagement.
What kind of rights holders are you targeting?
Our strategy was to initially work with tier two and tier three right holders because they just simply don't have a way to distribute or effectively monetise their content. However, it's been really interesting over the past couple months, with the rights holders who have been approaching us. [There are] some tier one rights holders at the very, very top of sport who have said, ‘this model sounds fascinating, can you take us through the details?’
This is not a threat to any of their existing deals or the existing ecosystem, it’s complementary. There are broadcasters that we’re speaking to who are looking to redistribute some of their own content onto Recast because nobody subscribes to Sky Sports or BT Sports, DAZN or any of those to watch yesterday’s knockout punch or a goal or a try from the day before yesterday.
This allows even the broadcasters, and those tier one right holders, to monetise short-form content, near-live highlights etc, that they’re not monetising effectively elsewhere.
Are existing clipping rights deals not a stumbling block?
Many rights holders that we’re speaking to over the past couple years have been carving out those rights. This being a social platform that is self-serving where they have their own channel, there are actually many right holders this works very well with because they've already carved those rights out.
However, some of those who haven't carved the rights out and who might have that content tied up in another deal, it doesn't mean that that's the end of the conversation. The ability to tag others and share earnings means that they can go back to the table with those other partners and say, ‘we've got a following on social media, our players also have a big following but we're not leveraging that and neither are we able to drive direct monetisation’. So, they’ve got that deal in place, but people are finding that content on social media at some point anyway. So they can say: ‘how about we're first to distribute? Get out of the blocks nice and quickly, so we can tag the content and share 50 per cent of the earnings with you.’ Then it's incremental revenue being generated and the fans are satisfied.
There's definitely a transition that is going to have to take place here, in which more right holders when they are coming to the end of their existing rights deals and looking to carve such things when renewing.
What is the platform’s growth strategy?
Our model is very much a B2B2C model. When we officially launch we've got our own budgets to do our own marketing, and look to acquire users particularly focused around the sports that are on the platform, we are also working with those rights holders to ensure that they can activate this really effectively and convert their own fans over to Recast.
We would work with the rights holders to onboard their immediate and hardcore fanbase because they can obviously establish that connection where there's currently a disconnect.
We first target that media relationship, then of course the more content that we can work with those partners on and the more that we aggregate that, the more cross-pollination there is.
How does the monetisation work?
If someone gives us UK£1 for 100 credits and then they spend that 100 credits on watching something from the European Tour, then the European Tour takes 85 credits and we take 15. This is where we get our money from because we're still setting the UK£1 the fan or the brand gave us in the first place and therefore can pay out that UK£0.85. It's all automated self billing and on a quarterly basis, although I'm sure as the business grows will be built to make that much more regularly. Everything we've built means the platform has an extremely robust leger at the back end to ensure that those transactions happen automatically. In the future, publishers can cash out as and when but to start with we made it simple with self billing on a quarterly basis.
What needs to happen before Recast is officially launched?
We're in discussions with over 60 rights holders around the world, ranging from tier three up to the very pinnacle of sport. So between now and then it's about securing more of those right holders to set up their own channel. Everybody has got their own different dynamic, so some of them will be looking to use it for live streaming, others will be looking to monetise archived content.
For us, it's all about bringing together all that different content and proving out the model. That's why we’re just saying ‘later this year’, because essentially there isn't a hard deadline when we need to launch. What we would like to do most importantly when we officially launch is for fans to arrive and see that we do aggregate content – cricket, tennis, golf, basketball, swimming, athletics, lacrosse all those sports on Recast.
There are always ways to further enhance the user experience, but in particular the offering to our publishers. We offer publishers access to insight and data on consumers much more freely than any other platform because our model means that we don't need to squeeze the value of data such as the likes of Facebook do.
Thereafter it’s about replicating our offering into other markets sooner rather than later.
Do you see Recast developing as a platform for live or VOD content?
I think we will see most uptake and value driven through the near-live content because that is one format that is particularly difficult for anybody to monetise effectively – whether it is a broadcaster or a tier three rights holder.
Considering the way in which consumers consumption patterns are evolving, particularly younger audiences, they want immediate access to content and they actually don't mind if it's of poor quality. I think there's greater value to be generated through near and live short-form content and where we really are complementary to everything else across the media and broadcasting landscape, I think that's where we will accelerate.
If we are talking about near-live clips, why would I choose Recast over Twitter?
There's a couple things. First of all convenience is an important point. So as we understand your preferences and move towards further developing the platform rather than you having to go and search for that you get a notification your team's just scored a try, for example. You open up the app and there it is immediately, and that cost you ten credits which you got for free watching an ad previously.
I also think that we also need to accept that if we continue to just find ways to cut out or skip any value exchange, it is going to be pretty difficult for those tier two or tier three sports to survive or continue to provide content to you.
There are many rights holders on their knees at the moment because they're like, ‘how do we make money?’
I think for the consumer, most important is convenience and value. They don't mind paying and there are many platforms that prove that micropayments unlock further monetisation than any other model because of that convenience and people getting value.
Also, the content is on these platforms because that's where the rights holder is distributing. So take influencers, professional athletes, teams, leagues, federations, etc – who usually just post these kind of clips on Twitter – why would they be incentivised to continue to put that content on other social platforms when there's more value to be derived from the more convenient and more lucrative model that we offer?
What about rights holders or broadcasters who use that kind of content as a marketing tool?
Absolutely some of them may wish to hold on to that content and use it as a means of marketing and drawing awareness. Those that we've spoken to see this as an additional revenue stream that they would very much welcome considering they don’t monetise outside of their subscription base effectively. You either are a subscriber or you're not, and let's be honest, particularly young audiences, they're not going to subscribe to Sky Sports, BT Sport, DAZN. It's not what that generation does and that's not going to change. That's the way they consume content and pay for it.
Just look at Fortnite. I mean, it's a free game to play and it made US$1.3 billion in revenue last year from in-app purchases. So there's spending power but they like to pay for what they want, when they want, and extract value. That's where we often talk about the future fan as well, because broadcasters can generate incremental revenue and target fans that will never subscribe to their platform, quite frankly.