Sep 22, 2023

An interview withBen KeighranFounder & CEO The streaming space is crowded, but those with a content niche can stand out to viewers – and advertisers. Take Caffeine, a free-to-watch livestreaming platform with backing from Fox, Disney, Cox and Riot Games. It launched in 2018 as a competitor to Twitch for livestreaming gaming, music, talk shows and podcasts with influencers and celebrities. But the service wasn’t attracting new viewers as quickly as it hoped. So last year, Caffeine pivoted to zero in on live sports and competitions. The category attracts engaged viewers, plus there’s a market opportunity to livestream smaller sports leagues that typically rely on regional sports networks for distribution, CEO Ben Keighran says. Caffeine’s attention moved away from individual creators, Keighran says, and toward forging partnerships with action sports leagues, such as surfing, skiing and wiffleball. It’s even working with a rap battle league. (Fun fact: The rapper Drake has a multiyear partnership with Caffeine.) The platform credits this shift for the 1,000% jump in monthly active users it saw over the past 10 months, from 3 million to 35 million. And where there is scale, there is advertising potential. Caffeine started running ads roughly five months ago. Since the company is well backed, Keighran said, it could afford to hold off on ads until its scale was growing quickly enough to justify paying for programmatic sales teams. I spoke with Keighran to find out how Caffeine is approaching its new ads business. AdExchanger: Why do smaller sports leagues choose to distribute their content on Caffeine as opposed to more well-known distribution platforms like YouTube? BEN KEIGHRAN: Larger distribution platforms have a wide array of content and reach, but aren’t necessarily catered to live sports. Since our pivot last year, content owners are seeing an average of 10 times the viewership they get from other distributors. For example, Caffeine’s livestream of the Natural Selection Tour [a snowboarding competition] this year had an average of 30 times more views than other distributors airing the event. How does Caffeine monetize? We share revenue that content generates, like in-app purchases and pay-per-view or subscription-based content. We also have ads now, and we let content owners arbitrage some inventory for specific brands they work with. What is the platform’s approach to advertising? It’s early days, so we still mostly run pre-roll ads. But we do plan on opening up other forms of advertising, including mid-roll ads and more opportunities for show sponsorships and brand integrations. Do you sell inventory programmatically? Programmatic is the majority of our ad sales, although we’re working on building a direct sales team. Our programmatic network includes Magnite, Unruly, Xandr and The Trade Desk, plus [Magnite’s] SpringServe ad server. We’ve also recently plugged into Fox’s programmatic network, OneFox. How does ad targeting work? Caffeine serves ads based on content partner, device type and location by district market area. We can also layer on age- and gender-based targeting when someone signs up for an account to engage with posts. Does Caffeine have distribution deals with content owners that also invest in the platform, like Disney and Fox? We have streamed ESPN in the past, but not at the moment. Deals depend on seasonal licensing agreements. When ESPN owned X Games, for example, it distributed the series on Caffeine. [X Games has action sports such as skateboarding, skiing and BMX. ESPN sold it to private equity last year.] We’re currently streaming some content from Fox Sports. We also own a joint-venture studio with Fox to broadcast different organizations that don’t have their own production studios. Why would major programmers distribute content on Caffeine instead of keeping audiences on their own platforms? Generally, we’re running the sports that our distribution partners aren’t. Fox and Disney are more focused on the top sports leagues with high-cost airing rights, and usually run other sports content on Caffeine. We’re intentionally not cannibalizing each other’s viewership. Are you enjoying this newsletter? Let me know what you think. Hit me up at [email protected] . Enjoying this content? Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!