Mormon versions of Netflix, YouTube and (sort of) Itunes

Since the Internet began to take off in the mid 1990s, there have been many attempts by Mormon entrepreneurs to translate various e-commerce approaches into something that will work for the Mormon market. For example, back in 2004 I discussed Latter Day Tunes, an attempt at an online MP3 store for the Mormon market. It’s now defunct.

Three other ventures have started up over the last year, each a Mormon take on a very successful video content site. What’s interesting is how each of them reflects the two major difficulties of online LDS commerce: 1. The monetization and scale issues that all Internet businesses face 2. The difficulty of establishing the parameters of what a Mormon/LDS business should stock so that it doesn’t offend it’s audience, but also has enough selection to make it worthwhile to go there, but also doesn’t dilute the Mormon-ness of it.

Basic Model

1. The newest venture is called LDS Movie Rentals. It’s a Mormon version of Netflix. Subscribers pay a monthly fee to be mailed a DVD (or two). When they return the DVD, they get mailed another. At my last count, they had more than 180 titles.

2. The second newest venture is Mormon Web TV. It’s basically a YouTube aggregator. It takes YouTube videos that are Mormon-themed and embeds them in its own interface. In addition to tagging/categorizing the videos, the Mormon Web TV team highlight specific ones that they think are the most interesting/humorous/well-made, etc. and provides a sentence or two about the video and/or the people behind it (and often a link out for more information). It currently has 351 videos.

3. The oldest venture is is iShows2Go. It’s a download site for mobile content (or for watching on a laptop or desktop), an iTunes of sorts. It offers download of videos from content partners for a onetime fee (usually $1.99 to $10.99). Downloads are in iPod and WMA formats. For movies, it also provides a link to various online stores to buy the DVD.

Audience and Inventory

1. LDS Movie Rentals is aiming squarely for the wholesome Mormon entertainment crowd. In fact, the site suggests that its titles are all suitable for Family Home Evening viewing. According to their press room, the business “is an online DVD rental store providing movies which are wholesome and inspirational with the intent to strengthen testimonies, uplift souls and bring a positive message into the home.”

Titles range from Veggie Tales to BYU sports to LDS Church videos to many of the so-called Mollywood offerings (“Baptist at Our Barbecue”, etc.). Richard Dutcher’s “God’s Army” and “States of Grace” are available, but “Brigham City” isn’t. Neither is Greg Whiteley’s Arthur Kane documentary “New York Doll.” LDS General Conference DVDs are available. And although they haven’t fully expanded to include many of the classic non-LDS-but-beloved-by-Mormons films (like “Chariots of Fire” or “Newsies”), they do include a few. There’s nothing in their inventory list so far that you would be surprised to find in a Deseret Book store.

2. Mormon Web TV’s audience probably skews young and single and most likely reflects the same audience as YouTube. Trailers for Mormon films and humorous videos abound. You get titles like “Napoleon Dynamite goes on a mission” and “Princess Bride Institute Ad.”

3. It’s difficult to say much about iShows2Go’s audience because it’s a bit all over the place. It offers many of the Mollywood titles, but also has a huge section of Utah high school sports games and BYU rugby and lacrosse games. It also has some of the winners of the LDS Film Festival available as downloads. It comes across as young and very Utah-centric. Aside from the sports, it offers less than 100 titles for download, I believe.

Scaling

Scaling means: can the site sustain its’ server load, customer service and database and site design as it grows in customers and/or site visitors?

1. It’s quite possible that LDS Movie Rentals will have scaling problems. Since the site relies on physical copies of media (DVDs), it has to strike the balance between the number of DVDs it buys and the demand for those DVDs. But too many copies of “The Singles Ward” and you waste money on un-rented inventory. Don’t buy enough and make customers wait until a copy that is out gets sent back in and you end up alienating customers. In addition, with a Netflix-like site, you want to have as much of a selection of titles as possible to spread around the demand and to keep customers paying each month. I don’t know that the output of Mollywood titles is such that the site can rely on new titles from that market keeping customers interested. On the other hand, if you bring in to many “wholesome-but-not-LDS” titles, you risk diluting the focus of your site and you risk duplicating titles that are easily found elsewhere (at the library, at Blockbuster, on Netflix, etc.). In addition, every title you add, adds a small cost in terms of the time it takes to add it to your database. I also find it odd that the company appears to be located in Nashville. Maybe they have a mailing center in Utah, but usually with a “by-mail” business, you want your warehouse to be located in the same community as where the majority of your customers are. On the other hand, maybe their customers don’t end up being Utahns (who would have easier access to many of these titles anyway), but instead are Mormon families in the “mission field.”

2. Mormon Web TV circumvents the biggest scaling cost of a streaming video site by relying on YouTube embeds. Site traffic, then, only impacts their page loads. But even so, if it becomes super popular, their server costs could still go way up. And every title they add and/or feature takes time. There is some indication that they may allow users to add videos, but as far as I can tell, that hasn’t been rolled out yet. Still — because they are relying on YouTube to serve the video, their problem isn’t scaling. Actually, let me restate that — as long as YouTube is serves the video for free and the users who posted the videos don’t yank them from YouTube, scaling isn’t a problem.

3. For iShows2Go, scaling isn’t actually as much of a problem as with LDS Movie Rentals. Yes, they need to provide a lot of server space to host their downloadable films, but they only pay for bandwidth for serving those films when somebody pays to download it. And because they only do downloads, they only need to worry about having one copy of each title. For them, the bigger issue when it comes to scale is that they rely on content partners to give them the download rights (all LDS Movie Rentals has to do is go out and buy the DVD and Mormon Web TV just grabs the embed code for the YouTube videos). In order to grow, they have to sign up more content partners and that’s always a difficult, often messy process.

Monetization

1. The beauty of LDS Movie Rentals is that when they sign up customers they get a steady stream of money coming in. Nothing beats a monthly fee charged to a credit card. The problem, though, is that it’s difficult to sign up and keep customers in the rental-by-mail business. LDS Movie Rentals offers two pricing plans — both offer unlimited rentals per month — you can have 1 DVD out a time for $12.95 a month or 2 out for $19.95 a month. Both of these plans are more expensive than similar offering from Netflix or Blockbuster.

They have avoided the heavy-use customer by limiting their plans to 2 out at the most, but the question is, how many potential customers are going to be willing to pay those kinds of fees for a limited inventory? If the site can attract a steady core of medium to low-use customers, though. And if they can anticipate demand well enough to not buy too many or too little copies of each title, then I think they might just make a niche market for themselves. Of course, the danger here (and it’s the same danger all Mormon niche companies have that don’t provide a unique product) is that Deseret Book will decided to enter the same business. Or someone else who can either buy titles more cheaply.

2. Whether or not Mormon Web TV has a monetization problem depends on the goals of the people behind the site. If all they need to worry about is money to pay their web hosting costs, then some Google AdWords boxes and/or banner ads and/or donations from users may be fine. If they are expecting to make some income off of it, then things become quite a bit more difficult.

One option would be to have sponsored videos (basically ads) — things like film trailers, product demonstrations, etc. Problem there is that unless they reach a point where they’re garnering a ton of traffic, there’s not going to be incentive on the part of Mormon filmmakers/studios and other LDS media companies to pay to have their work featured. And, if they do offer such a feature, how will their audience feel about that?

3. iShows2Go offers some unique content, but not enough of it. If they can continue to carve out some niche partners and, especially exclusive partners, and so offer downloads that aren’t available elsewhere or at least easily elsewhere, then I think they could generate some decent income. However, the problem is that they are stuck with a format that their target market may not be open too. Are their niche market groups in terms of content (LDS Film Festival groupies, Utah high school sports junkies) made up of people who want to do downloads? Maybe so.

Final Thoughts

I think that these there experiments in bringing Mormon-themed media to an online audience are interesting but risky (unless these sites get bought out by Deseret Book). There is the risk that someone may copy your model. The Mormon market is small enough, that that’s rather easily done. There’s the risk that your content is just too specialized or too focused on a particular audience to generate many customers. And the risk that if you open up your content too much that you will alienate your core audience.

And then there’s the problem that much of this stuff is available elsewhere. I haven’t done a full cross-check of inventory, but I think that many of the LDS Movie Rentals titles are available on Netflix. And most of those that aren’t are LDS Church videos that can be purchased cheaply or checked out from a ward library.

Finally, although I didn’t do a thorough audit of each site, all three of them have some design/coding issues. One of the search features on LDS Movie Rentals wasn’t working. I signed up for an account with Mormon Web TV and when I sign in, I’m given links to features I can’t use — plus it has a really lame and annoying splash page. I forget what was wrong with iShows2Go, but there some bug or obvious design flaw.

Now, I don’t bring these things up because I gleefully want to tear down all three sites. I think that each of them is an interesting, worthwhile experiment. But they have some work to do. And I’d also like to see a few things a bit more thought out in terms of audience and goals.

If any readers are users of any of these services, I’d be highly interested in your experience(s) with them. If you’d prefer to not post a comment, then e-mail me at myfirstname AT motleyvision DOT org.

Also: Karen Lee and Gideon Burton at Mormon Renaissance have already posted a nice analysis of Mormon Web TV.

20 thoughts on “Mormon versions of Netflix, YouTube and (sort of) Itunes”

  1. Really solid analysis, William.

    It seems to me that LDS Movie Rentals has somewhat missed the point of the Netflix model, IMO. Netflix is a “Long Tail” play — the idea is to carry what the local video rental store has plus everything else that is available. The only way that LDS Movie Rentals can compete with Netflix is if they offer a lot of Mormon content that Netflix doesn’t or can’t get, and then present that content in a way that Netflix also can’t do (Mormon categories? Mormon evaluations?). If you limit your offerings by how “wholesome” the item is, won’t customers continue to just use Netflix? Anyone can use your site to see what is “wholesome” and then add the film to their Netflix queue!

    In addition, limiting your audience to those interested in “wholesome” materials only limits your sales. If I’m not focused on the “wholesome” issue, or I disagree with your definition of “wholesome,” I won’t use your service unless you have unique content!

    I do have one question, however. Is there any indication of how these services are promoting their sites? Do they have any insight into how to solve the near impossibility of promoting to the Mormon market?

    Like many Mormons, I’ve never heard of these services (and I thought I was pretty well clued in!) If they can’t reach me, with my high involvement in the Mormon sites on the Internet, how do they expect to reach the vast majority of Mormons, who haven’t heard of the bloggernacle and don’t even look for Mormon-related sites when they get on the Internet?

    Kent

  2. Great point about the Long Tail play, Kent. The issue is if the ease of putting your entertainment in the hands of a trusted partner (LDS Movie Rentals) is worth the cost. It might be to some people. I have no idea if it will be for enough people.

    Mormon Web TV and iShows2Go are cross promoting. LDS Movie Rentals recently gave LDS Review.net a special offer to give its readership.

    LDS Movie Rentals also received editorial coverage in Meridian Magazine (which I can’t link to because their site was hacked).

    As a sidenote, iShows2Go appears to be part of the Simplicity Group, a Web services firm.

    But yeah, I don’t know how they expect to reach Mormons. Mormon Web TV might have the best shot because it has the hooks from some good viral marketing to happen (assuming, of course, that people point to the site and not just directly to the YouTube URL).

  3. “I think that many of the LDS Movie Rentals titles are available on Netflix. And most of those that aren’t are LDS Church videos that can be purchased cheaply or checked out from a ward library.”

    This is the killer for LDS Movie Rentals, and is why I don’t see the idea lasting for more than a few years.

  4. Again I’m late here, but really impressive analysis, William. I likewise don’t see the whole thing lasting long at all (‘a few years’ seems a bit long to my view of things). A better use of efforts might be to push LDS content to the already existing on line rental companies (among the not mentioned parties are Amazon, Greencine, Facets and other art specific market companies). That is, of course, unless LDS specific media starts getting made more prolifically than it now it.

    But I’m mainly concerned with the cultural and even spiritual implications of a ‘company as a safe-haven’ model. I definitely identify with the ‘newer generation’ from Kent’s post on Christian Book stores in that I don’t trust a financial institution to make moral decisions for me. ‘Mormon’ doesn’t mean that we share the same sense of morality.

    I’d postulate that a desire to have ‘wholesome’ defined for you in media would spread to other areas, if it didn’t already originate there. It sure sounds frightening to me. “I don’t want to take moral responsibility for what I watch, will you take that responsibility for me?” I’m sure there are other sides to this, but aren’t there better models?

    I’d like a detailed description of content as well as a discussion of why that media is worthwhile or who might enjoy it as who would want to avoid it (complete with age guidelines and taste suggestions).

    From a business point of view it seems that the wider selection would always be a more viable option.

  5. “A better use of efforts might be to push LDS content to the already existing on line rental companies (among the not mentioned parties are Amazon, Greencine, Facets and other art specific market companies). That is, of course, unless LDS specific media starts getting made more prolifically than it now it.”

    Trevor, this hints at one of the principal dilemmas for media created by Mormons — to what degree do we maintain a market segregated from the national market, as opposed to simply participating as a group within the national market? Both options have significant disadvantages, and you may be right that participating in the national market, instead of keeping to ourselves is better. But the national market tends to marginalize smaller players, so such a move could also end up making our film studios, record labels and book publishers weaker than they may be with an LDS-oriented market.

  6. “But the national market tends to marginalize smaller players, so such a move could also end up making our film studios, record labels and book publishers weaker than they may be with an LDS-oriented market.”

    Kent,

    I hadn’t considered this, but I can’t say I understand how exactly. If Netflix already provides most of the so called LDS titles, then how could they be further marginalized? Do you mean that the wider selection of more ‘enticing’ media would do the marginalizing?

  7. Trevor:

    Think of it as what percentage of a potential customer’s attention a particular Mormon product can get. Each product on Netflix (or Amazon or any other large media site) has to compete with so many others that it is hard to get the customer’s attention.

    In contrast, a Mormon-specific venue offers less competition. And the audience for Mormon materials can easily find what they are looking for there.

    Yes, it is possible for large media sites and venues to categorize products so that Mormons find them. But the don’t and I don’t believe they will. It takes a certain expertise to categorize something as Mormon when the Church isn’t the subject of the work. These sites haven’t done it, nor is there a way for their customers to help them with it (tagging only works if the customers know what to tag and are accustomed to doing so).

    I am certain that if we were to close up the LDS market completely, many of the sales that now occur in the LDS market would simply disappear.

  8. That’s actually a larger issue for many retailers and also for just the massive flow of information on the Web. Supposedly the next step for the development of the Internet is better human and/or algorithmic filtering/editing of content.

    That’s why MormonWebTV may actually be positioned to do something interesting. It all depends on if they can draw a large audience and then empower that audience to manage some of them work for them (and if they can generate enough income from the site to make the time they spend on it worthwhile).

    This is why I think that my reader-oriented e-commerce site would be a great idea. But then again, monetizing would be difficult. If you divorce the filterers from the booksellers/publishers, you are more likely to get better, more credible filtering, but the money thing is more difficult. But if the booksellers/publishers do the filtering, then you aren’t going to get good results because they’re going to play favorites and may ignore titles that their customers might be interested in, but that they don’t get much value out of (e.g. Deseret Book).

  9. Kent,

    That is a really new and helpful perspective for me. I thank you for that. I’ll keep digesting it, but I’m really impressed with your insight.

    If so, this really does leave us with a dilemma.

  10. On the other hand, (in response to Kent) the vast majority of promotion goes on outside of these larger sites. Though my purchasing habits are far from the norm, I buy a book or film because I have read about it elsewhere. Though those large sites have produced interest for me in products that I might not have known about, I don’t go to Amazon to find out what to buy.

    Also, William, I just read ou reader-oriented ecommerce site, and though it isn’t an exact match up, you may be interested in a pretty successful cinephile run site whose financial stability is pretty amazing. http://www.dvdbeaver.com

  11. Trevor wrote:
    “On the other hand, the vast majority of promotion goes on outside of these larger sites.”

    Yes, but the vast majority of promotion is also not in Mormon venues or from a Mormon perspective, nor does it mention when a work is Mormon or not. So we still are out in the cold when it comes to finding works that inform our worldview or address our cultural issues.

  12. We wanted to support “LDS Movie Rentals” but the service seems a bit slow. Has anyone else had a similar problem?

  13. I just read a nearly-3-year-old article in the Deseret Morning News that referred to your blog in reference to Mormons bemoaning the loss of Postum.
    I have just introduced a product that I think can make them forget Postum. Called KaPoMo, it’s derived from a rainforest tree and tastes like richly-brewed coffee. Only it’s actually good for you: contains a complete protein and no caffeine,. Kapomo was a staple of Mayan civilization. Drinking it now helps sae rainforest and allows Guatemalan campesinos to make a living.
    I invite you to check out our website, kapomo.com.
    Thanks for your attention.

  14. Interesting read. I have found that sites for the LDS market are great, but the monetizing is the hard part. I think if you build the site as a service and build a following first, then you can monetize it later.

  15. They sure are. As Adam notes: the monetizing is the hard part. Of course, 2008 is ancient when it comes to the web. (which I guess makes AMV utterly archaic).

  16. To be honest, I think the fact that these are all gone now makes it an even better case study.

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