Mubi, the curated subscription video on demand service, is seeking an upstream move into film production. It will also seek new funding of over $100 million.
The company was founded 10 years ago in Silicon Valley by Efe Cakarel and has evolved a unique business model where its platform offers only curated movie content, largely art-house, independent and festival titles. Movies are added one per day and play for only a month before being removed. Not only does that sharply reduce content acquisition costs, it also creates a a different menu from larger VoD services which license content on long term deals.
“We will invest in our own produced content. It is the only way to get new content. Because if we talk to our studio partners they cannot give us their new films quickly. They have output deals with pay-TV platforms worth hundreds of millions of dollars,” said Cakarel on Thursday, speaking at the APOS conference in Indonesia. “To do this we plan to raise $30 million to $50 million through an off-balance sheet fund.”
Cakarel said that the company currently has 100,000 subscribers, but is now growing fast and expects to reach over 2 million within a period of three years.
“By 2017 we will need to raise more than $100 million of growth capital,” said Cakarel. “The good news is that there is plenty of capital available for fast-growing media companies.” Existing shareholders include Silver Lake Capital and Working Title co-founder Eric Fellner.
Mubi’s movie selection process is curated by a team of human programmers in the U.S. and U.K. In all other territories selection is by computer algorithm, guided by subscriber usage data and feedback.
Earlier this year the company announced a joint venture and $40 million funding partnership with Dong Ping’s Huanxi Media in order to launch into China.
Cakarel implied that Mubi China expects to avoid being tripped up by the Chinese regulatory restrictions that have recently snared both Apple and Disney. “They are bringing their own content into China. That’s why Netflix will find it difficult to enter China,” said Cakarel. “You have to have a China-specific strategy, and so we will focus on Chinese content.”