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As traditional cable programmers struggle, startup VENN is stepping up to the plate with a business model the founders of the live-streaming video-game entertainment network say is custom-built for the over-the-top era.
For the Aug. 5 launch, VENN will make its 24-hour, free-to-watch linear network available on Amazon’s Twitch, YouTube, Facebook Gaming and Twitter. In addition, the company says, it will be coming to dedicated channels on connected-TV platforms representing more than 30 million U.S. households, including Vizio’s smart TVs, Comcast’s Xumo streaming service, Sinclair’s STIRR and DistroTV.
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VENN, the Video Game Entertainment and News Network, is in talks for additional distribution deals with OTT platforms as well as traditional and internet pay-TV providers, said Ben Kusin, co-founder and co-CEO. VENN’s programming, totaling 21 hours of original shows per week at launch, will also be available directly on its website (at venn.tv).
“TV is having a crisis moment. We believe it’s due to a fundamentally flawed business model,” said Kusin (above left), an entrepreneur and one-time game-industry exec who formed VENN in late 2018 with Ariel Horn (above right), an alum of Riot Games and NBC Sports. “The problem with the [cable] subscription model is they can’t migrate to other platforms.”
Unlike traditional cable networks, VENN doesn’t charge carriage fees to distributors. It is, however, sharing a portion of its ad inventory with partners; overall, Kusin said VENN will run about 12 minutes of ads per hour of programming. To reach Gen Z and millennial viewers, VENN’s target audience, the network must be available on nontraditional TV platforms, too, Kusin said. The model is similar to the one pioneered by Cheddar, the financial news streaming network acquired by cable operator Altice USA last year in a $200 million deal.
It’s worth noting that for now, VENN doesn’t have deals with Roku or Amazon’s Fire TV, two of the biggest OTT platforms, which have been in stalemates with HBO Max and NBCUniversal’s Peacock over what one media company exec called “egregious” distribution terms. Roku, for example, asks for a 30% share of an ad-supported video service’s ad inventory.
According to Kusin, Madison Avenue is buying into VENN’s proposition and its promise of reaching elusive younger fans with game-centric content. He claimed the company has a deal worth “just south of $10 million” for a yearlong category-exclusive sponsorship.
“With everyone at home, there’s a captive audience,” he said about launching in the middle of ongoing coronavirus lockdowns. “And there’s been a huge spike in gaming.” Kusin has been around the gaming biz his whole life: His father, Gary Kusin, founded the company that became GameStop, and Ben earlier in his career worked at EA and Vivendi Universal Games.
Meanwhile, VENN’s slate of original shows was developed in a “bottom-up” fashion, according to Kusin, with the startup inking talent deals with game personalities and other influencers who already have a following online.
The network’s shows include “Grey Area” co-hosted by Instagram influencer Sasha Grey (@sashagrey) and rapper/actor Jon Park, show “VENN Arcade Live” is hosted by League of Legends Championship Series host James ‘Dash’ Patterson with fashionista/entrepreneur Emily Mei (Instagram: @emily.ghoul), artist, model and host Tehya Johns (Instagram: @tehyaplays) and Daniel Gonzales (Twitter: @dGon).
In addition, daily news show “The Download” features Emma Fyffe (Twitter: @EmmaFyffe), host and broadcaster Erin Ashley Simon (Twitter: @erinasimon), Overwatch League commentator Matt Morello (Twitter: @MattMrX), actor-musician Jimmy Wong (Disney’s “Mulan”) and streamer and esports commentator Daniel Gonzales (Twitter: @dGon). Other shows feature singer/digital creator Chrissy Costanza, Twitch livestreamer the Sushi Dragon, and YouTuber and “NBA2K” pro gamer Cash Nasty.
“We’re finding creators who are excelling what they do… to take their fandoms to new platforms,” said Kusin. Added Horn, “we are building explicitly for the streaming generation.”
Actually, VENN had hoped to have much more live programming out of the gate but, among other things, the COVID-19 pandemic has prevented it from opening its New York City studio at 3 World Trade Center. For the launch, the company is shooting its shows out of nearly 10,000 square feet of studio space at Vista Studios in the Playa Vista section of L.A., taking a variety of safety precautions. “The talent never interact with another human,” said Horn.
By Q4, VENN plans to produce 30 hours of original programming weekly, then more than 50 hours per week by next year. “We joke that if you want the ultimate challenge, build a TV network from scratch in COVID,” Horn said.
VENN’s initial distribution partners are optimistic that the streaming TV network’s approach will draw a crowd. “Bringing round-the-clock gaming content to our audience — for the first time — needed the right partner,” said Rishi Chadha, Twitter’s head of gaming content partnerships. “VENN’s celebration of diverse digital pop-culture and personalities is a natural fit.”
The company’s name, VENN, has the double meaning of “Venn diagram” — as in, it’s looking to hit the intersection of gaming, entertainment and pop culture, Kusin said. Asked whether VENN is in some ways competing with Twitch, Kusin said they should each benefit from the other: “Our goal is to be one of the top channels on Twitch, if not the top channel,” he said. “It’s a positive flywheel for everyone to grow audience.”
VENN is now in the midst of closing on a $25 million Series A of funding, which it expects to do next month, Kusin said. Kroenke Sports & Entertainment, owner of the NFL’s L.A. Rams, NBA’s Denver Nuggets and other franchises, is among the new backers. Kusin declined to name other investors coming but he claimed the round was oversubscribed (meaning VENN has commitments for more funding than it intended to raise).
VENN’s $17 million seed round was led by esports investment fund Bitkraft and Eldridge Industries. Other investors include Riot Games co-founder Marc Merrill, Blizzard Entertainment co-founder Mike Morhaime, Twitch co-founder Kevin Lin, Bertelsmann’s BDMI, and TopGolf Media president YuChiang Cheng.
The company currently has 70 full-time employees, with about another 70 part-timers. Key execs include COO Neal Kirsch (formerly with Discovery) and CTO Scott Gillies (previously with Vice Media and Red Bull Media House).
Watch VENN’s preview trailer:
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