At Lukup Media (http://www.lukup.com, twitter.com/lukupmedia), we are building an interactive TV platform - it allows the creation and delivery of interactive ads and content on digital TV (satellite, cable) and this post summarises the lessons we learnt building distribution by dealing with very large companies (in our case, satellite and cable TV operators, and TV channels). We have done well, having built distribution that reaches out to 20 million TV homes in India, larger than number of homes reached by BSkyB or Comcast.
Lesson 1 : Existing vendors of your partners play a big role in determining your success : in our case, these vendors were set top box, middleware and conditional access providers. And while some of them were reluctantly helpful, some were downright terrible, one vendor for example, refused to accept bug reports and instead wanted to classify 'bugs' as 'change requests' ! So, consider the vendor and support ecosystem well.
Lesson 2 : revenue share vs fixed fees : when you build distribution, there is a decision to made - whether you want to share revenues with your distribution partners or pay them a fixed fee for the distribution. Too many rev share agreements makes the business feel like having too many moving parts. Sometimes, fixed fees work better than rev sharing.
Lesson 3 : Letters of Intent and MoUs mean nothing : atleast in India, we found that these pieces of paper mean nothing. Large companies are serious only with legal contracts, everything else is subject to change ! Do not bet your money or time on intent, in principle approvals or memorandums of understandings.
Lesson 4 : Measurability is very important : especially if you are building distribution. In our case, we have worked with some 'one way' satellite and cable platforms but explaining that to media buyers doesn't help. Even if it is difficult, you got to measure it somehow. If you can not measure distribution, its as good as not having it.
More on this later, as we continue to learn.
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