Sharan Reddy was piqued. His startup was under threat. Indee TV, founded by him, provides screeners for independent film makers and film studios so that they can upload their films securely into his platform to be viewed by judges of film festivals. Founded in 2010, Indee TV had a sizeable customer base. A similar service of Amazon, Without a Box, pulled the plug in April 2012. It curtly asked film festivals to use only Amazon exclusively or quit (its contract added a new clause that a festival using Amazon's service cannot use other similar services), and within a day, Indee TV lost 90% of its customer base. Still Sharan braved his way to the Cannes Film Festival, hoping to keep his company alive by launching an alternate product. The sign-ups at Cannes for the new product were encouraging and kept his startup afloat. But still he was not willing to give up on his startup that powers the dreams of filmmakers. He started a campaign, on a whim, on Facebook, “Support Indee TV, boycott Without a Box.” This unleash had an effect. The 12,000 likes for the page unnerved Amazon. It scrapped the offending clause from its contract. The customers who withdrew came back to Indee TV and it was back on track. A nice little filmy story.
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Sharan Reddy[/caption]The appearance of mild-mannered Sharan Reddy belies his gutsy fight from which he emerged successful against Amazon. It’s no surprise that Sharan is into a startup about films as he had the film connection in his family. His grandfather, Varada Reddy, owned Liberty theatre, one of the famous landmarks in Chennai. It was a quaint little theatre, playing out many a blockbuster for the public, but eventually lost out to the technology evolution of the film screening industry. Sharan remembers watching many movies sitting on the balcony of the theatre. As a student at Sri Venkateshwara College of Engineering, he and his friend Samvith Srinivas developed a video streaming application way back in 2002 as part of their engineering degree project, around the same time when Sify was entering video streaming. Sify was planning to launch streaming for their khel.com website and had other plans as well. “Video streaming had not caught on yet,” remembers Sharan. But they used LAN to show some videos they shot of friends, teachers, and their college. And it worked. “Flash was not yet there,” adds Sharan. The technology developed by Sharan and Samvith was acquired by Sify and Sharan landed up in a job at Sify.
Sharan had already got an admission for masters in computer science from University of San Francisco and had to defer it a year as he now had to work with Sify. “I applied for animation in LA and computer science in New York and San Francisco,” says Sharan, adding San Francisco is the best thing to have happened to him. “I got to network with a lot of people in the startup ecosystem there,” he feels and this prompted him to think. “I wouldn’t have got into startups had I not seen these people build their products,” he explains, giving a peek into his mind at that time. Yet another lucky break for Sharan was working for Deloitte Consulting just after his masters and by coincidence or sheer luck, he landed in the Disney account. “I just a lot of insight into the film industry,” he says sounding a bit excited. A couple of VPs at Disney became Sharan’s close friends and were telling him how the industry might end up in an upheaval.
At the same time, film studios were making a lot of headway into screeners. “If there are 7,000 members of the jury for Academy awards, the studios ended up sending that many DVDs,” Sharan points out. But the independent film makers didn’t have budgets to make so many DVDs and eventually lost out on Academy Awards to big studios.
“Actually we started with screeners for independents so that they don’t have to make DVDs,” says Sharan. It’s simply an upload process for the filmmakers. He wanted to help independents with film distribution by streaming their films to the film-loving audience. It fizzled out as they didn’t know how to get the audience. “We also didn’t know how to approach independent filmmakers as well,” Sharan says with an air of resignation. They quickly flipped the idea. About 18 months into the startup, Sharan quit Deloitte to focus on the startup. Just because of a turnaround in the fortunes.Finding a customer
He met Jesse Harris, who runs National Film Festival for Talented Youth (NFFTY), who was excited about what Sharan was doing. NFFTY is the largest film festival in the world for filmmakers below 25. Jesse requested Sharan to develop the screener for filmmakers applying for NFFTY to be viewed by judges. The problem for Jesse was that he had to get one DVD and circulate it to five judges. If there is a technology on which the film can be uploaded and the judges can watch it (all in a secure manner), his problem is solved. Sharan and team had four months to get the product ready. To work on this product in full flow, Sharan had to quit his job to focus on the startup. After all those anxious moments, they hit the success button at NFFTY.
Indee offered a workflow to watch and judge the films online. Without a Box, the screener service of Amazon, didn’t have an online viewing capability at the time (they a tiny player in later). Additionally, they didn’t have a judging component. With Indee, judges of festivals can vote on the films and we generate these as reports that the festival can quickly get an understanding of. No such judging system exists on Without a Box.
Finding a bit of traction … and losing it all
“We didn’t have all the technology in place for NFFTY,” says Sharan. “But we created a slick workflow and the judges liked it,” adds Sharan. Still Indee couldn’t ride on NFFTY’s success to get large film festivals to sign up for them. But many medium-sized festivals joined up. By 2012, Indee had about 26 festivals on their customer base, which included AFI Fest, the fifth largest film festival in the United States. When some prominent festivals signed up, Indee attracted distributor interest as well. Film Bridge, a distributor in the United States, was interested in Indee. In fact, Film Bridge called Indee as it was impressed with their film festival successes. For Film Bridge, the film is to be viewed not by judges but by a larger audience of buyers, press, voters etc. This took Sharan and team to their original idea of making film screeners for a larger audience.
This is when the David vs Goliath fight with Amazon’s Without a Box happened. In April 2012, it told film festivals that either you can be with us or on Indee. Except three festivals, all others pulled out of Indee. “We didn’t know how to come out of that,” Sharan says poignantly as startups don’t have legal budgets. And up against Amazon, forget it!
The phoenix act
Abandoning all work on festival applications, the team focused on secure screeners. The product wasn’t still ready. “With a mockup, I travelled to Cannes Film Festival in May 2012 to pitch to filmmakers,” says Sharan. Lakeshore Entertainment, one of the top ten film companies in Cannes, and Ealing Studios, the oldest film studio in the world, signed on the dotted line. There were half a dozen other sign-ups as well. Back from Cannes, Sharan worked up a lot of tactics to bring Amazon to ground. “We reached out to a lot of press,” he says. Then he started the famous Facebook campaign “Support Indee TV, boycott Without a Box.” The 12,000 likes for this page unnerved Amazon. When one of the respected magazines called up Amazon on the development, immediately they back tracked and deleted the clause that called for exclusive sign-up, in August 2012. The Indee TV’s campaign succeeded.
“We were not very well versed with social media,” Sharan recalls. “This one thing showed what you can do with social media,” points out Sharan. This is well worth a social media case study. The startup persevered excruciating pressure to stay on course for those six months.
How it works
“We didn’t want a clunky username and password system,” Sharan starts. Instead, unique copies are sent to the recipients as an encrypted email, in this case, the judges. At a higher price, the copies can be watermarked as well. In some cases, the number of views are fixed (say after six views you can’t watch the video any more) and in some cases, there are cut off dates. RTMPE protocol is used to prevent downloads or copying. There are pay-as-you-go plans and subscription plans. You pay per screener sent and on subscription, your cost per screener is reduced.
About 90% of the customer base for Indee TV is now U.S. based film studios and distributors. The sole Indian customer, Reliance, uses Indee TV for all its international film sales.
Building the product (without funding)
Sharan and Sukhin, the brother of Samvith (with whom Sharan developed the video streaming application) put in a small amount of money from their savings to work on their idea. Money started flowing when NFFTY signed on. Importantly, they kept all the rights and the resulting IP of the product to themselves when they built the product for NFFTY. But they didn’t charge NFFTY upfront. It’s like a service catering to a specific (NFFTY) requirement but keeping the product to yourself. “We couldn’t give anything for free,” says Sharan as they were not fat on funds. Right from NFFTY, Sharan counts on relationships to build the customer base. The film makers pay upfront during submission and the customer revenues have kept them going.
“Unless you have a huge market to go after, you don’t need funding,” Sharan says with a lot of clarity. And the opportunities for scaling and expanding remaining optimum, Sharan feels Indee can manage without funding as of now. “You also need to develop a product that customers will pay for,” emphasizing on discipline. Early money could distract focus is what he implies.
There is competition to account for and differentiation remains key to stay on in the market. There are a couple of big players who are offering a similar service but on a slightly different model. But Indee is has some of the largest brands including Lakeshore, Warner Brothers and Reliance.
Indee is a small team of three people made up of a couple of developers and a sales person. And there is Sharan as well. The product philosophy is always that a small, niche team of developers creates a focused product having marquee customers.
The future holds opportunities with the film awards season coming up in November 2013. Even more exciting is the consumer consumption of screenings, which Sharan thinks Indee is not mature enough to do at this point in time.