MAR GALTÉS
Barcelona
Freemium is one of those neologisms through which the language adapts to technologies and their circumstances. It is an amalgamation of free and premium and means access to free services that are complemented by added-value paid-for services. This is the business model employed by applications on Android and Apple smartphones. InOutTV has just launched its 2.0 freemium television platform on the market. It consists of a hybrid set-top box that enables users to manage free-to-air and paid-for HD digital television content, along with content from Internet channels. The set-top box can be operated on a free-of-charge basis or users can pay 36 euros per year to gain access to more services. “You can record whatever you want and see it whenever you want.”
“No more family squabbling over the remote!” exclaims Eudald Domènech, who founded InOutTV in 2001, having sold two pioneering Internet businesses, Servicom and Telépolis. The president of InOut is Joan Majó, former Spanish Minister for Industry.
In 2003, InOutTV launched its first set-top box, “a video recorder that served as a search engine for finding television schedule information.” “We began working on the program guide (SincroGuíaTV) before adding the possibility of recording (SincroGuíaTV Premium) and now providing access to à la carte content,” explains Domènech. “We employ some 30 people to edit or add synopses and reviews.”
The InOut business model has three sources of income: the sale of the programing database to other firms (Imagenio, Ono, the TVE website or the El Mundo website); alliances with television set manufacturers such as Oki, with embedded access to InOut; and access to the platform via DTT set-top boxes (HD, with a built-in hard drive and Internet connection). It has also added movie rentals to its portfolio of services through an agreement with Filmin, along with theme channels created by commercial brands such as Red Bull or Nestlé.
InOutTV recorded a turnover of 20.3 million euros in 2010, with a gross margin of 4.5 million euros and, for the first time, a net profit (200,000 euros). “We are about to start an interactive advertising trial with TV3.” The company has sold more than 2 million set-top boxes, 50,000 of which have built-in hard drives. “We have sold 25,000 of the new broadband units. Now we're starting to retail them in stores, such as Mediamarkt or Millar.” InOutTV's forecast for 2011 is to double turnover and exceed 40 million euros.
The USA remains a few years ahead. “Pay TV is the dominant force there. It is calculated that within two years 35% of households will go from paying 100 dollars for 800 channels to paying 20 dollars for what really interests them.”
Domènech controls 64% of the parent company, Techfoundries, while 16% is in the hands of minority shareholders and 20% is owned by Caja Duero, currently immersed in the problems of the banking sector. “We are looking for an industrial partner to replace it.”
Having become firmly established in the Spanish market, InOutTV is initiating its international expansion: it has set up InOutTV Asia in Hong Kong and is waiting for final confirmation of a license to operate in China “by the end of the year or at the start of 2012.” It will operate with a local partner and the Chinese government. “We provide the technology and they manage content. The market prospects are huge.”
The company had a turnover of 20.3 million euros and came into profit for the first time in 2010: this year it expects to double sales