In the age of streaming video, watching TV has become an overwhelming task.
There are so many streaming services already, from mainstays such as Netflix and Amazon Prime to newcomers like Disney+ and HBO Max. Even more are on the way, including NBC’s Peacock later this week, and an expanded, rebranded version of CBS All Access in 2021. Our Roku players, Fire TV Sticks, and smart TVs are ill-equipped to deal with all these options, requiring us to jump in and out of way too many apps just to see what’s on.
It’s a problem that startups such as JustWatch and Reelgood have been trying to solve. Instead of making you bounce between disparate apps, both services can tell you what’s available on practically any streaming service. You can then add movies and shows to a watch list, get more suggestions based on your viewing habits, and even load their apps on your television to use as a centralized streaming menu. Compared to the app overload of most streaming devices, the universal guides offered by JustWatch and Reelgood seem like the ideal way to watch TV in the streaming era.
That may explain why these services are surging in popularity, especially as streaming video usage has soared during the coronavirus pandemic. David Croyé, JustWatch’s founder and CEO, says monthly active usage worldwide has grown from 10 million users in December to 20 million now, and Reelgood says it has five million users in the United States alone. Although both companies have been around for years, the stakes suddenly seem a lot higher as mass confusion over streaming sets in.
“This problem was just for the hardcore nerds in the past few years, that already had like five services and watched everything they could get,” Croyé says. “Now, it’s reaching the mainstream.”
Reelgood and JustWatch aren’t alone, either. They have competition from other streaming guides such as TV Time and Simkl, and even more options have bubbled up over the past few months, including Watchworthy, Wander, and VUniverse. Each company is racing to become the ultimate starting point for streaming video, and hoping to build big, lucrative businesses around understanding what people want to watch.
“I think we can have 200 or 300 million users per month, so we want to grow this 10 times bigger,” Croyé says.
Doing what Roku and Amazon won’t
As someone who covers streaming TV and cord-cutting, I’ve long been fascinated by Realgood and JustWatch. For years, I’ve watched much larger companies struggle to make sense of streaming, only for these startups to provide what so many of us really want: a single, cohesive guide.
Sure, platforms like Roku and Amazon Fire TV offer universal search features, but they don’t offer watch lists or recommendations that cover all your streaming services. Apple TV comes pretty close with its “TV” app, which aggregates suggestions and recently watched programs into one menu. But it doesn’t include results from Netflix, severely limiting its usefulness.
Croyé says these companies’ business models don’t give them much incentive to produce universal guides. While Amazon does aggregate some content on its Fire TV home screen, the focus is largely on its own Prime Video and sponsored listings. Roku, meanwhile, is more interested in promoting The Roku Channel, its own streaming service where it can monetize video through ads and upsell users on premium subscriptions.
“They push the channels where they get the most money, and try not to be reliant too much on Netflix, so in the end it’s just . . . business goals that so often go against what users want,” Croyé says.
As startups, JustWatch and its peers may also benefit from flying somewhat under the radar. Netflix, for instance, often resists attempts to have its content aggregated by the major streaming platforms. Its content doesn’t appear in Apple’s TV app or in Roku’s genre-based search menus, and it has never delivered on promises to support the “Play Next” menu on Android TV devices. If these big platforms were to start aggregating Netflix content without permission like Reelgood and JustWatch do, it could lead to some drama.
“If you don’t have Netflix, like [Apple’s TV app], then 50% of the usage is missing, and they won’t get Netflix because it’s a political thing,” Croyé says. “Netflix doesn’t want to be there. They want to have the users themselves and control the user journey.”
David Sanderson, Reelgood’s founder and CEO, also believes that the business models of the major streaming platforms are too entrenched to build guides that are truly universal and service-agnostic.
“It’s no secret that all the streaming services pay for placement, and the existing structure of how they pay for placement and the placement that they pay for is well-established,” Sanderson says. “And if you’re all of a sudden going to say, ‘Hey, we’re just going to be content-first, instead of an app-first interface,’ all of that needs to be reworked.”
In search of more users
All of these factors create an opening for the likes of Reelgood and JustWatch. But they also create an opportunity for other device makers that want to compete with Roku and Amazon in the streaming business. To grow their audiences, both Reelgood and JustWatch are eyeing partnerships that will get their services preloaded on smart TVs and streaming boxes.
An early example would be Reelgood pre-loading its software onto the home screen of LG TVs, but for future partnerships, Reelgood wants to offer its software as more of a white-labeled service. Sanderson says the company is “deep [in conversations] with many and signed with several” TV vendors, set-top box makers, and telecoms that would effectively use Reelgood as their home screen. (Like TiVo, most of these vendors would likely build their interfaces on top of Google’s Android TV platform.)
“They’re realizing the opportunity in this space, but maybe they realized it a little bit late. So they’ve come to us,” Sanderson says.
Other companies can also make use of Reelgood’s data to build their own unified guides. TiVo’s Stream 4K, a $50 streaming dongle that launched in May, runs on Google’s Android TV software, but its main menu aggregates content from multiple streaming sources, including Netflix, Amazon Prime, and Hulu. Sanderson says that while TiVo designed the interface itself, Reelgood is supplying the data.
Croyé says JustWatch has some similar deals “in development stages,” but won’t elaborate further. Although he expects that TV usage will make up just a small fraction of JustWatch’s overall usage, it’s strategically important as a way for users to actually watch all the recommendations their getting and the shows they’re adding to their watch lists.
“The TV apps are the future of where you have to be,” Croyé says. “When you look at Roku, or Fire TV, or others, this is what everybody wants to own.”
The businesses behind the guides
On the surface, Reelgood and JustWatch look fairly similar, but their business models are where things start to diverge.
JustWatch says that it’s already profitable, and about 70% of its revenue comes from targeting users with movie trailers based on their viewing habits. For every movie or TV show users click on, JustWatch builds up a taste profile, then separates users into anonymized groups based on what they might like. Movie studios such as Universal and Paramount then give JustWatch a budget to target users with relevant video trailers on sites like Facebook and YouTube. (Croyé notes that users can decline to be tracked.)
“I like romantic comedies, but I’m 36, male, and not in a normal targeting group. But I click on romantic comedies in JustWatch,” Croyé says. “I would like to get a video ad on Facebook of a trailer for a rom-com, because this is what I actually watch.”
Another 20% of JustWatch’s revenue comes from affiliate commissions when someone signs up for a streaming service through the site, but Croyé says he’d like to grow this into half the company’s revenue in the future. JustWatch also has a burgeoning data insight business, in which it sells information about streaming catalogs and viewing trends to others in the industry. That currently makes up about 10% of the company’s revenues.
Reelgood, meanwhile, started from more of a Silicon Valley mindset of building up the product first and finding ways to monetize it later. Sanderson, a former ad product manager at Facebook, initially thought that would take the shape of recommendation-style targeted ads within the service, but lately the company’s been leaning more into selling access to its data.
As TechCrunch’s Sarah Perez has reported, Roku and some smart TV makers use Reelgood’s data for their universal search functions, the New York Post’s Decider website lists streaming availability in its articles on about TV shows, and some hedge funds buy Reelgood’s data to analyze consumer trends. To further build out the data business, Reelgood hired Mark Green, Nielsen’s for senior vice president of global measurement, last fall, and closed a $6.75 Series A funding round in December.
It seems that Reelgood is trying to fashion itself as a next-generation Nielsen for the streaming age, which is what drew Green to the company. “Because these are such walled gardens, no one really knows what’s being watched, and what’s happening with different streaming services,” Sanderson says. “Each service themselves knows, but they don’t know what’s going on with the others.”
That said, Sanderson hasn’t ruled out a return to putting ads in its product, especially as it partners with TV and set-top box makers. He sees Roku and its home screen banner ads as a model, and imagines splitting the ad revenues with device makers.
“Roku’s made a lot of money . . . with advertising, and I think that as we continue to scale we could actually do much better targeted ads and have a higher ARPU than Roku,” Sanderson says.
That’s not to say either company is done developing their actual products.
Croyé, JustWatch’s CEO, openly acknowledges that Reelgood offers a superior experience today. It aggregates more video sources, has a handy “Leaving Soon” section, and its design is just slicker overall. Reelgood even came up with a clever remote control feature for Roku players, so users can launch videos on the TV directly from Reelgood’s mobile app.
But by Croyé’s own admission, that’s because JustWatch intentionally didn’t put much effort into product development over the past years. The company was instead more focused on growing its user base—mainly through search-engine optimization techniques he refined in his previously job as CMO of Bonial International—and building a profitable business model. JustWatch has now hired more people on the product side to improve the app’s design, and to build new features such as guide data for live sports.
“[Reelgood] did like five years of product development,” Croyé says, “and in the end, they look a little slicker than we, and have some features we don’t have yet. But we didn’t do product development for four years, we tried to stay afloat and start to scale it. And now we are coming, basically.”
Reelgood wants to go even further with its aggregation efforts. Sanderson expects Reelgood’s guide to include live news and sports sources later this year, followed by shortform content on sites like YouTube. Ultimately, he wants Reelgood to cover everything users might want to watch in the most efficient way possible.
“If there are new episodes of some of the shows you’re watching, those are queued up there. If there’s a new movie that our algorithm knows you’re going to love, that’s sitting there. And then if you’re a fan of the Giants and there’s a Giants game on, that’s sitting there. Maybe some local news. If there’s a YouTube influencer you follow, and they have a new video, that’s up there,” he says. “So you can really have this one, super-curated row: Here are your best options of what to watch right now.”
That sounds a lot like the kind of experience streaming platforms like Roku and Amazon Fire TV should be including themselves. If companies like Reelgood and JustWatch can get there first, the streaming wars could get a lot more interesting—and far less confusing.
Correction: An earlier version of this story said that Reelgood partnered with TiVo for its streaming guide. Reelgood says TiVo is a customer, not a partner.