Dutch over-the-top (OTT) music video platform XITE has been expanding rapidly over the past year, launching on new platforms in the US and UK and growing from a reach of 20 million households to 120 million households. The company positions itself as “Spotify for music videos”, and is trying to give its users and experience which sits somewhere between linear and on-demand. XITE’s co-CEO Cees Honig spoke with VAN about why his company has opted for a “lean back” experience, and how XITE is working with Beachfront to tackle problems caused by the IPv6 protocol.
For those who aren’t familiar with the company, what is XITE?
We’ve been around for a while. We started as a broadcast media company, basically delivering music video channels under the XITE brand name, and music video on-demand content for cable and IPTV platforms. Then about five years ago we pivoted into more of a music tech company, building what you could call Spotify for music videos.
So we’ve built a service which holds basically every music video ever made. We have licenses with all the major music labels – Universal, Sony, Warner, and the top independents, so we say you can find just about every music video on our platform.
And we’ve bundled these assets into a product that’s purpose-built for TV. So when you launch the app, it immediately starts playing the last channel you were watching. And from that moment on you’re prompted to skip videos if you don’t like them or to ‘like’ videos if you enjoy them. And from there we start personalising the service, which means the music videos you love find you, rather than the other way round. Most other video apps like YouTube are very focussed on search, but we believe the TV screen is something you use in a more lean back way.
So we start by showing the user a channel and the user starts personalising that channel, and if they don’t like it they can switch to a different channel. We have over 100 curated channels in total, with different curation teams in different territories. And you can make your own channels based on genres, eras, and also visual filters. And there’s also a sort of ‘discover weekly’ functionality which basically build a channel out of your likes within the service.
We’ve rolled this out on most of the major platforms in Western Europe and the US. So in the US we’ve launched on Comcast, Samsung, Roku, Amazon Fire TV and Apple TV. And in Europe we’re on the same OTT systems, as well as Sky Q, and several other cable and IPTV platforms in Western Europe.
Why have you chosen to focus on a more ‘lean back’ experience, rather than an on-demand model?
Around 80 percent of people who want to listen to music or watch music videos know that they want to see good music, but they don’t have a specific track in mind. They might have a mood in mind or a genre in mind instead. So we start by making a choice for you, and then find out what your taste in music is by your likes and dislikes and the channels that you watch. And that lets us keep people on the app for longer periods of time. In the US right now the average session time on XITE is around 100 minutes, and in Europe it’s around 75 minutes. And this is going up and up as people use our services. We have users who keep it on all day.
But it’s not a product which people just turn on and leave on, there’s a lot of interactivity. We can see every skip, like, and channel change. And we collect that data and use it to improve and personalise the product, to keep people in the service.
Do you think the industry is missing a trick in the way they have primarily been focusing on on-demand services?
This is the premise we’ve based this product on, we try to be right in the middle of linear and on-demand. You can use our product like linear TV, where you just turn it on and leave it. Or you can use it completely on demand and search for videos within our service. But how most people use it is somewhere in between on demand and linear, where it’s a linear product but you can skip videos and ‘like’ videos, and the channel changes based on that behaviour.
Everyone has access to all the content the could want right now, through YouTube, OTT and linear television, but the question now is how do you make your choice? You could argue that when you have too many options, you get stressed out and don’t choose anything.
So we’re trying to make sure the content you love finds you, rather than you having to find it yourself.
How does advertising on XITE work?
For advertisers it is possible to target the different channels, or to target based on artists, genres, moods etc. We know everything about our users’ likes and dislikes through the choices they make, so we can use that information to inform ad targeting too.
And we’re careful to make it a good experience for the users, which is important for the advertisers because they want to be sure people are actually watching their ads. So we have an algorithm we’ve built for ad insertion where the first four minutes of watching on XITE is ad free, and then after that, ad pods start kicking in.
Every few videos you get an ad pod which will have a few ads. And it’s done dynamically, it’s not just the case that you get an ad pod every two or three videos. But the algorithm decides when to insert the ads, based on the best possible user experience.
A lot of OTT apps start with ads, because they need to make money. But we believe that you have to tempt people in first with the content they want, and then they’ll accept ads.
People are used to watching short ad pods from TV, though on TV they’re around five minutes long whereas ours are around one and a half minutes. We’ve found that makes for the best user experience, and that’s helping us keep these immensely long session times. We’ve managed to not scare off people with ads, while maintaining good monetisation on the service.
XITE today has announced a new partnership with Beachfront which solves a problem caused by devices using the new IPv6 protocol for device identification and location, rather than the older IPv4 protocol. Could you first explain the problem you’ve been encountering?
IPv4 addresses are made up of a string of digits, but there were only a fixed number of combinations of digits available within that range, and we are running out of possible addresses thanks to the number of connected devices we have.
So we needed to go to a different standard, IPv6. IPv6 is a much longer string of numbers and letters than IPv4. But the digital ad space today can’t handle IPv6 yet. That’s become a problem for us as we’ve launched on a lot of new platforms this year, we went from 20 million households to 120 million households where we’re available. Most of that growth is coming from the US and the UK, where some of the cable operators have moved on to IPv6 on their new devices. Those are new addresses, and they’re not known by the ad market yet.
So when we started trying to run targeted advertising on the service on IPv6 supported devices, the market didn’t recognise this as someone in Philly or Brooklyn watching the video, they saw it as fraudulent traffic because they couldn’t recognise the address.
And how have Beachfront helped you solve this problem?
So what Beachfront did for us is help us crack the code to make sure we can do geo-targeting on addresses which aren’t known to the market yet. They essentially made a translation from IPv6 to IPv4 so the market can understand information which comes from IPv6 devices. That’s what we’ve been working on for the past six months, to make sure that buyers like DSPs can trust Beachfront, and then trust XITE that the IPv6 address shows someone is watching XITE on Comcast in this zip code.
Is this a problem that other OTT platforms and services are going to be coming up against as more devices move on to IPv6?
This is definitely a problem which will come up more and more, especially with new inventory becoming available on new platforms like Comcast. Those platforms are still huge, but they’re based on the IPv6 protocol. So with apps like XITE, Tubi, and Zumo launching on those devices, for use to be able to monetise you need to correct this problem. And the problem will get much bigger too as more devices and platforms move on to IPv6.