In the future, television may no longer be the passive experience where you sit back and zone out. It’ll be social. It’ll be interactive. It’ll be more like Amazon’s social broadcasting platform Twitch.
But just as the direct-to-consumer streaming world has become competitive and fragmented, so too will the interactive TV space. Caffeine, a new social broadcasting platform that’s backed by 21st Century Fox and Disney, is one of those attempting to take on Twitch.
Since its founding in April 2016, Caffeine has raised more than $146 million in funding. The majority of that money was raised last summer, led by a $100 million investment from Fox that placed 21st Century Fox CEO Lachlan Murdoch, the son of News Corp CEO Rupert Murdoch, on Caffeine’s board of directors. The round included existing investors Andreessen Horowitz and Greylock Partners, with Ben Horowitz and John Lilly from Greylock also joining Caffeine’s board.
But the company’s acceptance into the Disney Accelerator Program last fall gave it a significant shove into traditional sports, a new area of focus for a platform that got its start strictly in video gaming. That Disney investment gave Caffeine access to last month’s X Games in Aspen via ESPN. Caffeine was awarded the rights to 10 hours of live X Games content, which enabled ESPN to experiment with its new social storytelling and broadcast interactivity.
“This interactive live television stuff is getting huge momentum at the moment. There’s a lot of opportunity as more and more people don’t buy cable subscriptions and look for alternatives to watch live content,” said Ben Keighran, the co-founder and CEO of Caffeine. “I’m not commenting on ESPN’s behalf, but if you ask them I think they’ll say they’re really excited about it as well.”
Keighran previously helped design and build Apple TV. He said the FOX and Disney partnerships have sped up Caffeine’s plan for 2019.
“That has led us to getting sports content onto the platform far quickly than what I thought,” he said during last week’s X Games. “We’re only just starting to ramp up with the sports content. The X Games is our first time giving this a go.”
Access to some of the biggest sports broadcasters via ESPN and FOX means that Caffeine is already ahead of other competitors, including Twitch, as far as navigating the complicated sports rights space. Twitch began adding traditional sports content to its platform last year, including Thursday Night Football (via Amazon’s rights deal with the NFL) and the NBA’s G League. But Caffeine now has ESPN and FOX.
FOX negotiated social streaming into its $5.1 billion seven-year broadcast deal with Major League Baseball last fall, which was specifically to allow for games, such as the World Series, to be streamed live on Caffeine’s platform.
“Twitch is our competitor, for sure,” said Keighran. “What I’m trying to do is build something that’s far more mainstream than Twitch. I want it to be more about not just gaming but sports and gaming and eventually entertainment as well. The partnerships with Fox and Disney allow me to bring content into the platform that Twitch and Amazon don’t have the rights to. They’re a total game changer.”
Caffeine looks more like a social media platform with feeds than a content destination such as Twitch, YouTube, or Netflix. Users can interact with broadcasters in real time and buy them digital gifts with an in-app currency. There are no ads or latency between reactions. The company pulls in major influencers to interact with users. At the X Games, for example, Danny Davis, who won back-to-back gold medals in the 2014 and 2015 Men’s Snowboard SuperPipe, interacted with fans during live X Games events.
“It’s access. I spoke to some of the users afterwards and some of them were nervous to ask questions, they were star struck. They’re like ‘I’m on a FaceTime call with Danny Davis, oh god, what am I going to say?’” said Keighran.
The use of influencers is not uncommon in this space. Twitch deploys influencers in both sports and esports. Sportscastr does something similar through its partnerships with the NFLPA and WNBA. Caffeine said it will continue to focus on bringing in “killer influencers” to stay competitive, all while increasing its array of traditional and action sports rights. Keighran plans to talk to the “NBA’s of the world, the NFL’s of the world,” but also athletes and events in action sports, as he’s a snowboarder and surfer himself.
“I think users and the next generations want a more interactive format. They want to talk to their friends, invite their friends, talk to the commentator, be the commentator if they want to be, talk to the influencer. They want that kind of flexibility with that content,” he said. “The idea of sitting around a campfire or a television with just those friends … we’re going beyond that.”