Frndly TV, one of a handful of live streaming TV services in the U.S., has managed to accumulate a substantial customer base thanks in part to really listening to them.
The service launched about two years ago as a highly targeted skinny bundle with 12 channels and a $5.99/month price point. It’s since more than doubled that lineup—with family-friendly channels like Hallmark, History, Game Show Network, Weather Channel, GAC Family, Curiosity, Dove Channel, Family Movie Classics and Heartland TV—but it’s only increased its price to $6.99. The company is expected to add another batch of channels early next week but will keep its price as is.
Frndly TV, which now has more than 500,000 subscribers, is designed to boost availability for what co-founder Andy Karofsky called channels with less representation in the traditional and virtual MVPD space.
“We had this hypothesis that there were a lot of consumers out there who, when they had cable, these were channels that they preferred and watched a lot,” said Karofsky, who added that Frndly TV solves the distribution problem for programmers and consumers while maintaining affordability and simplicity. “The hypothesis held true and that’s really what we’ve been doing here since October of 2019.”
Fierce Video recently sat down with Karofsky and fellow co-founder Michael McKenna to discuss future growth strategies for Frndly TV and how building in-house customer service has made a huge difference.
The following transcript has been edited for length and clarity.
Fierce Video: Frndly TV recently added A+E Networks channels to the lineup but you’re still keeping the price point really low. How are you balancing expanding the lineup with keeping the entry point affordable?
Karofsky: It’s been a core tenant to our strategy since we launched, this idea of delivering high-quality, affordable service. It takes a lot of effort and discipline around the entire business to manage our cost structure, but we do a really good job of it. We’re still a small company. We have around 40 employees and a large number of those employees are in our customer service group.
We just try to do a really good job of keeping our overhead and cost structure as low as we can so we can continue to add great content to our lineup. We can’t add everything. There’s certain content out there that would just blow up our model. But we were able to find an avenue with A+E with content that was, when we surveyed our customer base, it was content that they were extremely interested in. We were able to add it under a construct with A+E that allowed us to retain our cost structure.
Fierce Video: Are a lot of your programming decisions guided by customer feedback?
Karofsky: Yeah, a lot of it. We talk to our customers a ton and they know their programming. It’s really impressive. Not just the shows but the specific channels, and the feedback they give us is extremely valuable in making those decisions.
McKenna: We also made a strategic decision at the beginning to keep the customer service in house, so that we were directly in contact with our subscribers. So, it’s not only an issue of querying our subscribers when opportunities like A+E or others come up, to get their feedback on whether they have an affinity for that programming. But we’re also reacting to every customer interaction that comes through. So, if we start to see a trend, it allows us to take it into consideration when we’re looking at programming or any other aspect of the business that touches the consumer.
Fierce Video: Where are you seeing most of the growth for Frndly TV? Is a lot of it organic, is it coming from partners, or is it a mix?
Karofsky: We’re doing it all ourselves right now.
McKenna: I would say it’s 100% organic.
Karofsky: Yeah, we’re not partnering with anyone right now.
Fierce Video: Frndly TV is at about 500,000 subscribers and you’re already profitable. Can you talk about how you reached that profitability relatively early on in your existence while some of your competitors are still chasing it?
Karofsky: It was something of a focus for us, getting to profitability, from the beginning. We actually got there faster than we had originally projected. A lot of it gets back to the discipline of the business. We have a ton of experience among the four founders [including Bassil El-Khatib and Mike McClain], both on the distribution and programming side, and we’ve been fortunate to hire some really strong talent that buys into the nature and discipline of the business. If you come to our office, it’s fine but there’s not a lot of bells and whistles. We’re not spending money on things other than what will really help grow the business. To Michael’s point, you can save money by outsourcing customer service, but it’s a piece of the business that we felt like, based on our experience, was essential to our success.
The funny thing is when we first launched, the four founders were doing the customer service. We were handling the tickets and we had this funny schedule where, you’re on for these few hours and the next guy is on for the next few hours and we were running it seven days a week. But the beauty of it was that we got to hear right away what users of the platform liked and didn’t like, and we also got a taste of that customer service and the importance. It just supported our decision to do it ourselves.