Technology by Irvine-based XUMO is powering a free streaming content service geared for U.S. customers of LG Electronics Inc., the world’s second largest TV manufacturer.
LG’s service is called Channel Plus, and it debuted last week on the company’s smart TVs. It features more than 50 free channels of live and on-demand digital content created by the likes of TIME, PBS Digital Studios, WIRED, Cooking Light, GQ and Sports Illustrated.
XUMO’s technology makes Channel Plus part of the package for buyers of LG TVs. Viewers can get the entertainment, sports, news and lifestyle programming through dedicated channels or the channel guide.
“We’ve created a new way over and above the app for consumers to discover and get a hold of great content instead of content coming over a cable box or antenna,” said XUMO Chief Executive Colin Petrie-Norris. “With a lot of the cord cutting today, it’s a lovely way to get content.”
Consumers with cable subscriptions can get the same content through the Live TV mode on the remote control or via the Channel Plus app.
The development comes as Seoul-based LG and other smart TV makers, including Irvine-based Vizio Inc., try to cater to an elusive consumer base that has gradually been cutting the cord for years, made evident by the growing popularity of streaming services such as Netflix and Hulu, and ongoing struggles at legacy networks to capture and retain coveted younger viewers.
Xumo’s technology, rooted in ad placement and user searches, provides content suggestions based on current or past viewing habits. The suggestions rely on data analytics.
The company, which does not disclose financials, currently counts on licensing fees for most of its revenue but expects ads to become the chief source of revenue over time.
Linking with one of the world’s largest consumer electronics manufacturers and launching a new streaming service could help 5-year-old XUMO establish its own brand as it aims to build a network of 100 channels by year-end.
“LG is really a huge international TV manufacturer, a very well-known household brand and leader in the smart TV arena,” Petrie-Norris said. “They’ve put a lot into it.”
LG posted global sales of $48.8 billion last year, down 4.2% from 2014.
The company ranked No. 4 in North American TV shipments in the first quarter with an 8.7% market share, behind Sony, with 9.4%; Vizio, 29.1%; and Samsung, 37.4%; according to London-based IHS Markit, which reported that 25.2 million TV units were sold.
Xumo’s standard video streaming service is available on nearly 20 million smart TVs through partnerships with Vizio, Panasonic, Sanyo, Magnovox and Phillips, as well as through iOS and Roku apps.
Its latest deal is unique, though, because LG has established its own network of content under the Channel Plus brand.
Business Model
XUMO buys the rights to stream content in the U.S. from a variety of outlets, including media organizations, production studios, brands, YouTube sensations and other online content creators. It then licenses the content to TV manufacturers.
The company also handles all digital ad sales, an essential revenue generator for any video distributor.
“We’re focused on a free, ad-supported model,” Petrie-Norris said. “Ads are an important part of everyday life, and they fund a lot of the growth of content on the internet.”
Selling targeted digital ads, placing them within content and linking them to e-commerce is ingrained in the company’s DNA.
XUMO was created in 2011 through a joint venture between parent Viant Inc. and Panasonic Corp.
It employs about 30, most based in Irvine. It also has an office in New York City and development teams in the U.K. and Los Angeles.
Viant’s operating divisions include Irvine-based Specific Media LLC, an online advertising technology and media company with annual estimated revenue topping $200 million; Vindico LLC, a New York-based digital ad management and analytics service provider; and Beverly Hills-based social network Myspace.com.
Viant in February was acquired by Time Inc. in New York on undisclosed terms.
Time Chairman and Chief Executive Joe Ripp said at the time that Viant’s technology will boost the media company’s “ability to more effectively target consumers.”
The Viant Advertising Cloud bills itself as providing marketers with access to 1.2 billion consumer profiles and information that matches a client’s customer list with “first-party register data,” essentially information individuals directly give to businesses that includes such metrics as log-in time and duration on social media accounts like Myspace and other larger players.
The platform also lets clients send personalized ad messages to individual customers across digital formats and devices. Its analytics service provides information on consumer purchasing habits related to ad placements and how much they spent online or in-store.
