I had the pleasure of interviewing Chris Yeh, an angel investor in uStream.tv. As always I probed him with my legendary 15 questions:
1. We know you’re an Angel Investor in uStream.tv but can you let us know what brought you to uStream.tv in the first place and who you have funded and worked for in the past?
I found Ustream through a friend at Goldman Sachs who used to serve in the military. The Ustream founders are U.S. Army veterans, and they reached out to the ex-military network. My friend thought they looked interesting, and knew that I did a lot of early-stage investing, and made the introduction. When I saw their demo, I knew that they were on to something quite compelling.
I’ve invested in a number of other early-stage ventures, all of which either received or are about to receive venture capital funding. These include SitelerWash (funded by Tugboat Ventures) and PBwiki (funded by Mohr Davidow Ventures).
2. Explain uStream.tv in a nutshell
Ustream is a platform that allows anyone to broadcast live video on the Internet. The thesis behind Ustream is that the interactivity of live video makes for a compelling user experience, and that the company which makes it easy for any user to broadcast live video has an tremendous market opportunity, just as YouTube succeeded by making sharing recorded videos easy.
As a side note, one thing I like about the live model is that its emphasis on user-created content sidesteps the copyright issues that have plagued the video sharing industry.
3. As soon as I hear what uStream.tv is I think of the show Big Brother. The show is huge over here in the UK (but let it be said I hate it). Do you plan on getting this sort of show on uStream.tv or will you just leave it to user’s of uStream.tv
Ustream’s goal is to empower its users to create compelling content, not to be a TV studio. While the team is certainly making headway with its "Live-razzi" celebrity program right now, over time the focus will definitely be on what the users create.
4. I’ve heard you saying that uStream.tv was never intended as a 24/7 broadcasting platform. So were you originally focusing on having users broadcast shorter live shows?
Yes, the original concept behind Ustream was that it would allow people to broadcast at specific times for specific purposes, such as weekly or daily shows, or to cover specific events. However, I’m certainly delighted to see people choosing to broadcast 24/7 as well. In fact, Ustream recently added its second 24/7 stream. One of the company’s users, without any prompting or contact from the company, decided to launch his own 24/7 stream.
5. Which do you think will become more popular, a 24/7 show or a show which broadcasts a shorter (say 30 minute) live show everyday?
I think that both 24/7 shows and traditional "time slot" shows will have their place. In fact, I can easily imagine someone who broadcasts 24/7 also doing a more formal daily show for their less dedicated fans.
6. Do you think the demand for reality TV will play a big part in uStream.tv?
I absolutely believe that the demand for reality TV is driving adoption. Ustream is the ultimate in reality TV. The live format prevents editing tricks, and the ability to actually interact with the stars takes things like American Idol’s voting system to a whole new level. Who hasn’t watched a reality show and thought, "Man, that must be fixed." And who hasn’t wanted to call up one of the contestants and give them a piece of their mind?
7. Any new uStream.tv shows that are coming soon that you can let us know about?
Ustream has at least two shows on tap with former contestants from some of the big reality TV shows here in the United States. The stars are still working out their schedules and time slots, but the company expects those to start soon. I’m also excited about some of the new voices Ustream will be featuring, including an author who will be broadcasting live as he travels America via motorcycle for his book tour.
8. Justin of Justin.tv says that they are "starting a company to make broadcasting live video on the web easy." Given the popularity of Justin.tv are you worried about their potential as your greatest competitor.
I think that everyone in the live video space owes Justin and his team thanks for bringing attention to the medium. Certainly they are smart guys with a lot of media attention, and that makes them strong competitors. But if you look at the history of the Web, whenever a new industry arises, there are multiple winners. Amazon isn’t the only e-tailer who made a lot of money. Google isn’t the only search engine who made a lot of money. YouTube isn’t the only video site that made a lot of money. Of course I would like Ustream to be the #1 player in the space, and I think they have a good shot at it, but I think there’s plenty of room for several big winners.
9. How do you compare to your competitor Stickam?
Stickam is another early pioneer to whom the rest of the industry, including Justin.TV, owes a lot. Stickam really helped pave the way for Ustream. I would say that Ustream is less of a social network, and more of a pure broadcasting platform. Nonetheless, all of these companies are evolving rapidly, and it’s hard to say if the categories and classifications that exist today will still be true in the future.
10. I’ve seen you being talked about as a YouTube for live video. YouTube, at about 2 yrs old, now has about 30 million visitors a month. In 2 years time how popular do you think uStream.tv can become?
I believe that live can capture a significant chunk of the video market. At the end of the day, all video consists of a viewer watching content, and all the companies are competing for those viewer hours, whether that company be ABC, YouTube, or Ustream.
I also believe that the extra engagement of live video will make it an even more powerful platform for marketers and monetization. In the end, my prediction is that live players like Ustream will represent fewer hours than the recorded players, but that those hours will be more valuable.
11. The infrastructure and bandwidth required for live video must be much more expensive than a regular video hosting site like YouTube. Do these costs worry you in anyway and do you think uStream.tv is scalable on current technology?
Scaling a live video site is definitely a major challenge, and with the nascent state of the video ad market, monetization is difficult. But I like the way Ustream is approaching these twin problems.
My prediction is that while live video is a money-losing proposition right now, the continuing decreases in the infrastructure costs and the continuing increases in monetization will cause the live video business to cross from unprofitable to profitable in the next few years.
12 .How will uStream.tv make money? Google Adsense, pre-roll video ads, paid membership?
All of the above, plus more. Anyone who says that they know exactly what will happen in this industry is either deluded or lying. Ustream plans to experiment with a variety of different models, ranging from advertising-supported to pay-per-view.
13. A lot of internet investors, including yourself, seem to be very keen to get into online video. Investments are at a high level but there can only be so many winners. Do you see a .tv crash like the .com crash we had some years ago, or have investors learnt their lesson?
I can’t speak for all investors, but I lived through the late 90s boom, and I can tell you that things aren’t nearly that crazy yet. Back then, it was commonplace to read about companies receiving $100 million rounds–and that was when ecommerce and online advertising were a fraction of their current levels. When I start reading about $100 million rounds again, it will be time to head for the exits, but we’re far from reaching that point.
14. I found the uStream.tv website to be a little bit messy, and also a bit confusing. If I hadn’t gone there knowing what it was I’d still be a bit confused as there is no description, tagline or about page. Is this something uStream.tv is going to address?
Your criticism of the site is spot on. I know that improving the user experience is probably the #1 priority of the company after scaling up to deal with increasing demand and traffic. You’ll definitely see some major changes in the weeks and months to come.
15. What’s the next big step for uStream.tv?
The next big step is to move beyond the initial surge of curiosity and interest. Right now, people are tuning into live video because it’s new and hot.
Eventually, they’ll tune into specific channels and programs because they are a part of their daily lives. I have no doubt that the company will get there.
Big thanks Chris Yeh for doing this interview about uStream.tv!
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