As Lightbox chief executive Kym Niblock prepares to bid farewell to the SVOD industry, we sit down with her for a long chat about her stint at the centre of one of the fastest changing industries in New Zealand.
Since joining Lightbox as chief executive in 2014, Kym Niblock has emerged as one of the most vocal members of the SVOD industry. She's never been scared to express an opinion, and she fully embraced her position as the champion of a challenger brand that most consumers didn't even understand at first. Over her tenure, she has seen the industry evolve quickly—so quickly, in fact, that Lightbox's user base has already ballooned to over 150,000 subscribers.
While many of these subscribers have signed on as part of bundled deals with their broadband or mobile accounts, the service has given Spark something unique to offer consumers. And as Niblock explains, telcos are now expected to offer more than just pipes.
As we sit down for a final SVOD chat, Niblock covers some of the ups, downs and gremlins that have come with operating in this ever-shifting space.
On the changing leadership at Lightbox
"I’ve spent the last 15 years in start-ups, and in my experience there are those who launch businesses and there are those who are focused on being a business-as-usual manager. There’s no right or wrong. I think Lightbox has lost a relatively standard number of people as the business has matured. We had a great launch team and a number of those people have stayed with us but a number of others have gone off to take great jobs. Maria Mahony went off to join Bravo and David Hine has joined TV3. These are Lightbox alumni who added great value and have now gone on to take on different roles. These are not roles that we could offer them."
On why she’s moving on
"If I was in a unit that was constantly doing startups, then I’d stay with Spark, but the business is moving into a different space now by betting bigger on some of the businesses that it’s started up. So, for the benefit of my career, I’d like to go out there and take on some different challenges. I’ve spent a lot of time in media, TV and online, and I’m pretty sure I’ve got some things to offer other people."
On her replacement
"The team is still working on finding a full-time replacement for me, and Jason Paris will announce someone in due course. That said, we are in really good hands. Among the leadership team we have Hema [Patel], who has been with Lightbox since the outset. She worked with Sony as well as other media companies. She started out as a finance person at Lightbox, but quickly demonstrated her ability to look at analytics and data to create insights. Now, she’s basically the chief operating office for Lightbox. That’s not her title, but that’s her function. The thing that she’s got over me is that she’s really close to the data. A lot of her work hinges on audience behaviour, so she knows on a minute scale what the audience is doing, whether they’re breathing or leaving the room for a cup of coffee."
On starting from nothing
"The scale of New Zealand allowed us to be very agile and very quick. For instance, some of the decisions we made with the price change of Lightbox were literally made in a room with me, Hema and two other people. We just said, ‘Let’s do it,’ and it was up 24 hours later. At some other organisations that I’ve worked at, which will remain nameless, we had a three-year debate on changing the colour of a font. I once got into trouble for moving something about 15 pixels to the right without consulting a steering committee."
On why small isn’t always great
"I think one of the single biggest issues in New Zealand is people creating products that can be supported at scale. In other countries where I’ve worked, you had a case of 800,000 people accessing a piece of technology in a week, and that’s reasonable because you can develop a framework for monetisation around that. The numbers are so much smaller in New Zealand, so it’s really hard to justify some of those business cases. Hema and I look at programmes and shows that we like, but which we just can’t afford to buy. We just don’t have the scale. As the audience gets bigger, it might make sense from a return-on-investment perspective, but that’s just not the case right now."
On the perception of New Zealand lagging behind
"I came to New Zealand mid-2014, and a couple of things were happening at the same time. One was that the New Zealanders I was working with thought that New Zealand must be at least five years behind the rest of the world. And very quickly it became evident that this wasn’t the truth. I think New Zealand is now pretty much on par with the rest of the world in this space. I think products like SVOD have allowed New Zealand to become a part of the global conversation. It took a while to convince people that there wasn’t some mega road map that you just picked up from somewhere else. There weren’t any rules. We had to figure things out as we went."
On teaching the masses
"We knew when we started Lightbox that one of our biggest challenges was going to be educating audiences as to the whole concept of SVOD. We did a lot of research when I came to Spark and it told us that people loved the concept, but they didn’t have the words for it. It’s a bit like when companies like Sky introduced their box sets and PVR. People didn’t have the language to say, ‘I want to have a boxset or a PVR’, but they wanted to pause or rewind when the cat had to be let out. So what we discovered was that we had to go all the way back to grassroots and teach them what there was to love about SVODs."
On different rates of adoption
"On the one hand, we had a group who didn’t understand the concept at all, and on the other hand we had a really advanced group, keeping up with the rest of the world. What this eventually led to was profiling our audience along a technology adopter curve. To early adopters, the concept of streaming content is just common knowledge and it’s what they’ve done for years. Yet, when we went into other homes, people looked at us as though we were aliens with two heads. And what we had to do was strip the education process right down. We couldn’t say we’re a streaming company. We had to say it was a new way to watch TV. The tale of success of success at Lightbox is really about how we’ve used our early adopters to become our advocates by promoting the fact that we’re a New Zealand company, programmed locally."
On gremlins in the Lightbox interface
"We need to be upfront and acknowledge that new technology always takes a while to settle down. People often have an expectation that new technology will behave in the same way as older technology, but this simply isn’t the case. At the end of the day, Lightbox is not yet as robust as a UHF signal. It will evolve over time, but it’s just not there yet."
On improving the system
"You need to remember that Lightbox launched on a wing and a prayer in terms of technology. We launched the service in a very short period of time of about eight months. And when you create something like that, it takes a while to stabilise. We’ve been working on it ever since, but this is really the equivalent of working on a 767 while it’s in the air."
On being caught off-guard
"Apple doesn’t give much notice on technology changes. And it just so happens that a few changes made to Apple’s technology meant that we were denied access. So we had to go back and recode our library to re-launch Airplay. And this all came down to a decision we had made a year and half earlier."
On playing digital dominoes
"There are 23 points between a piece of content leaving us and reaching a customer’s device, and we only control seven of them. The other variables sometimes knock people out. It could be something as simple as them having a VPN on their iPad that leads our system to stop the transmission. Our content contracts require us to do that. I’m not claiming that our service is the best in the world. It certainly has a way to go yet. And if the entire New Zealand population had to jump online, that would not be a good outcome."
On content rights
"There’s this myth that Netflix and Sky lockdown everything, but I can assure you they don’t. There are hundreds of thousands or millions of hours of content created every year across SVOD, linear channels or sporting fixtures. The amount of content out there is endless, and Netflix and Sky do not have enough money to buy everything. So when we walk into a room to bid for content, it’s a very level playing field. When we go to conferences where new content is put on display, we bid alongside Sky, TVNZ and everybody else. Everybody has their own budget and everyone has to make their choices based on that budget. Sometimes you’re bidding on stuff that you don’t get. It’s a bit like bidding for a house."
On Sky locking sports content up
"I don’t think Sky has locked everything up on the entertainment side, but I think sport is a place where they have been really successful in terms of locking up the tier one codes. And I question why the tier one codes would sign five-year deals in a market moving this fast. Five years is a hugely long time, particularly if you look at how far we’ve come in the last two years. Two years ago people were asking us, ‘What’s an SVOD?’. Now, they’re going, ‘What shows are you watching?’."
"We would rather people were watching our competitors than pirating, and that’s always been our stance. Our position is that as long as you are accessing content that’s legally paid for, then that’s a good thing."
On SVOD adoption
"If you look at the adopter curve, we’re coming off early adopters and we’re moving into mainstream at the moment. And what happens when you reach mainstream is that it just gets really fast all of a sudden. Lightbox certainly sees that in terms of the subs numbers that we’ve seen over the last year. It’s just gone from strength to strength. Simon [Moutter] released the numbers in our year-end announcement, and [last week] we had our biggest day of signups since launch [Lightbox currently has over 150,000 subscribers]."
On why there’s been an increase signups
"There are lots of reasons for this. We have new content coming onboard. We’ve refined the way we market to people. We have a massive in-house strategy about connecting with individuals about content they’ve seen or new episodes that might be coming up. We have the deal with Spark going around that offers Lightbox as a gift with your mobile service. All these things add up to a healthy, strong business."
On why gyms are like SVODs
"If you think about a gym, people sign up, they get really excited, they run around, do lots of classes for a month or so, but then they get a bit busy on a Tuesday and they can’t make it. And before you know it, a couple of weeks go by and they haven’t gone back. And then they reach a decision point, where they either decide to continue using the service or not. And what our market research has shown us is that you need to continue communicating with people. They’ve forgotten you’re there. So they want us to tell them that the season of Suits is on. They want us to tell them what’s new."
On competing with Netflix
"We see Lightbox as a complementary service to Netflix. We don’t want people to have to choose one or the other. We think you should be allowed to have both. So, if you want Lightbox, Neon and Netflix, you should be able to choose all of those things. What we’d like is for people to look at our content selection and go, 'I want that.'"
On the free-to-air players
"The free-to-airs have really stepped up their game as far as SVOD is concerned. TVNZ updated TVNZOnDemand just after I got here, and it’s a really great service. There’s a significant portion of Kiwis that use that service every day. And what these services do is help consumers migrate toward that kind of behaviour. So, a person who has never used a VOD service, might’ve missed an episode of Shortland Street and then figured out they could get it on their iPads. It makes it really helpful for us."
On consumer trust in digital products
"A really interesting study came out of the UK recently. What happened was that Sky in the UK had made iTunes movies available through its box service. And although that might sound counter-intuitive, it performed really well for them. And by the end of the trial, they’d sold more movies on iTunes than they had through their pay-per-view service. I actually asked the product manager at Sky about that, and she said that they had identified a category of the audience that was on the later side of the adopter curve, who didn’t want to get involved in new technology, but were familiar with iTunes on their phone. Introducing iTunes on the box was met with a positive response, because consumers knew what it was and they knew there weren’t any hidden charges. And so, suddenly all these people, who hadn’t ever before used on-demand, bought movies."
"I think it’s the future. I think you’ll see is a huge amount of collaboration, and we’re already hearing about all the different mergers that might take place in New Zealand."
On why telcos are moving into entertainment
"Pretty much every telco in the world is involved in media these days. Telcos are really smart and have a lot of data available to them, and what they know is that broadband and mobile supply is becoming an amenity, like electricity or gas. And they need to have products within the business that drive customers to use their service. You need to have a future-based economy, because if you’re only supplying pipes, then you don’t have an incentive for your customers to stay."
On why banks are like telcos
"You see the same thing at banks at the moment. Everybody wants to put their money in the bank, everybody needs a cheque account, everybody wants to stay out of the bank. And a lot of banks have shifted their services to accommodate those needs. So what banks have essentially become are digital services companies. And you’ll see a lot of telcos head in that direction as well. Spark has had its ventures unit for three or four years already. It’s created Morepork, Bigpipe, Skinny and Lightbox. And that whole model of creating adjacent services is a tried and true model."
On why making money from content isn’t everything
"The original mission for Lightbox was to create an entertainment business, and we’ve done that. I think we’ve changed our definition of what an entertainment business could be. I think in our early days we thought it would be this massive network of channels, but we’ve now discovered that this isn’t really what customers want. The feedback we get is that there’s a place for linear TV and there’s a place for VOD TV and everything in between. I do think that monetising content is very different from buying content, but reading audience needs is a bigger objective for us. You’ll never meet two people who watch content in the same way. Even when you talk to couples, they have different approaches to content. What services likes ours do is give customers the opportunity to choose."
On her next adventure
"I plan to stay in New Zealand, but I don’t have a set role to go to. I’ve never left a job with another one to go to. I leave when I feel that I’ve done what I can do, and when I feel the business can benefit from other people working in my place. I’ll be looking for other opportunities."