Block Communications Inc (BCI) this week acquired free ad-supported streamer zone.tv in a move the company said provides financial certainty and strategic support to allow it to compete more aggressively in the FAST space.
BCI acquired Zone.tv intellectual property and assets, including the “zone.ify” free ad-supported streaming service that’s available on the market today, from existing owner ES3. Financial terms were not disclosed.
BCI was already an investor in Zone.tv. In 2022 ES3 and Zone.tv as its subsidiary announced closing $22.5 million in new capital, in a funding round that included both equity from BCI as a new partner, alongside debt refinancing with the Toronto-Dominion Bank. Following this week’s acquisition, BCI will continue to have a minority stake in ES3.
Zone.tv has around 25 employees, all of whom will be retained. Zone.tv CEO Jeff Weber will continue to run the company under the new ownership. In an interview conducted via email, Weber confirmed to StreamTV Insider that the company is already in the process of hiring additional employees across content, sales, engineering and development.
Following the investment from BCI, Zone.tv aims to grow its user base alongside more aggressive marketing and also attract more studio and content partners to expand programming on the service. Just how many users Zone-ify already counts hasn’t been disclosed. Weber declined to share any usage or monthly active user data, but said the company will have more to say as the year continues.
Significantly expanding content
Zone.tv’s service currently offers movies on-demand along with thematic short-form linear channels, with content coming from hundreds of partners, including Magnolia Studios, World Poker Tout, AXS TV and others.
And expanding its offering through content acquisition is the key near-term focus.
“The most significant strategic result of the transaction is our significantly enhanced ability to acquire quality content,” Weber told STV via email. “We have already seen significant movement amongst the leading content studios in the world based on our announcement.” Viewers can expect to see substantial changes to Zone.ify’s library in the next several weeks and months, he added.
One unique feature of zone.tv, which controls all of its own tech stack, is that its FAST service offers full films that aren’t interrupted by ads while the content is playing – instead putting ads in front of the movie for less intrusive viewing.
“This dramatically improves the quality of the experience for viewers but also ensures no ads are ‘lost’ due to viewers leaving the film during the movie,” he noted. And taken together, the chief executive said it allows for higher CPMs and higher fill rates – benefiting content owners looking to monetize.
It’s also a feature Weber said helps differentiate the service, which will continue to be a focus of the product roadmap. Beyond content acquisition, the company plans to leverage capabilities in targeting in the digital and social marketing space “to tightly match customers with our growing library to ensure viewers are thrilled when they use the service.”
A streaming foothold for BCI
In addition to helping fuel Zone.tv’s growth plans, BCI said the purchase also gives the media and communications provider a foothold in the streaming video space.
BCI is a privately held media company with broadband, commercial telecommunications, TV broadcasting, newspaper publishing and billboard advertising operations. It owns and operates cable systems in Northwestern Ohio, Southeastern Michigan, Northern and Central Mississippi and Northwestern Alabama. As of the end of 2022, BCI said its cable operations had “hundreds of thousands of customer relationships” across video and broadband. In addition to telecom, broadband and broadcast assets, BCI also publishes daily newspapers the Pittsburgh Post-Gazette and The Blade, in Toledo, Ohio.
“With this acquisition, BCI demonstrates our commitment to a new era of video via streaming television technology,” said Allan Block, chairman and CEO of BCI, in a statement announcing the Zone.tv deal.
Some smaller and independent cable providers have been looking to streaming alternatives as a way to offer TV options while they pivot away from traditional pay TV services or incorporate streaming into existing video offerings. Asked whether BCI plans to bring Zone-ify into its broadband or TV offerings as an additional or replacement option, Weber said that while it’s clear there could be opportunities across cable and streaming, there are no current plans announced to integrate the two business. That said, he noted BCI had been clear from the start in conversations “that they view streaming TV as a critical element in the media space moving forward.”
Indeed, BCI President Jodi Miehls in a statement said, “We believe in the model Zone·tv has created. Streaming’s place in the TV business is only going to become more powerful, and Zone·tv will ensure that BCI is on the leading edge of this exciting phase nationally.”
Further, Weber cited “keen interest from traditional MVPD’s to bring FAST into their offerings,” while noting success with existing operator distribution relationships.
MVPD and traditional service provider relationships in the U.S. and Canada are already in place, including distribution agreements with Comcast, Cox, and Rogers. Weber asserted this established trust allows Zone.tv to move fast in the operator space, with plans to keep pursuing that advantage near-term.
“We are seeing operators interest in FAST increase of late, and our lack of ownership in the content space means there are no entanglements from broader content deals that might arise with other FAST services,” he commented.
Beyond service providers, Zone.tv also has connected TV relationships, including with Roku, TiVo and across mobile on iOS and Android. It plans to move quickly to expand CTV relationships, with Weber calling that “a critical component going forward.”