Jan-Erik Asplund
Background
Len Markidan is the Chief Marketing Officer of the course creation platform Podia. We talked to Len about the build vs. buy dilemma around online video as well as how the explosive growth of video, with its high expenses, is affecting the economics of running a platform that hosts video.
Questions
- Let’s talk about video as a part of online courses, what part video has to play and why it's important.
- Diving into Podia specifically, could you talk about how Podia uses video hosting and streaming and how you monetize off of it?
- Let’s go in deeper on the point about video being the largest line item, how you guys think about how that affects pricing at scale and how you approach that.
- Could you go through the use cases of video within Podia, both hosting and streaming, and then talk about what the integration points are with the product and where users will touch video?
- How does the streaming end work? Do creators embed a YouTube live stream or Zoom links on a page that they can share with their folks?
- Are there any aspects of this where you could imagine building something different on your end versus going to one of these vendors?
- Would you say that, between Udemy and Coursera and Podia, the video aspect of the experience is going to be very similar?
- What are some of the things you think about in choosing a hosted video provider?
- Have you given thought to the two different kinds of video providers, like Cloudflare and Wistia on the one hand, and on the other hand, like Mux and Cloudinary that are a little more about building a video experience versus using one off the shelf?
- How do you think about switching costs with video? Have you done anything to make it easier to potentially switch away from Wistia in the future?
- I'm curious about your take on video more broadly and how you see it evolving. If I look at the Podia website, there are a couple different forms of video under features: there's the more direct hosting of video and live video, and then there's stuff like webinars where you're serving as the ticketing booth for people to access videos. Do you have thoughts on where this is going and how you see expansion of those use cases?
- As far as picking partners, how are you thinking about getting prepared for an explosion of live video or short form video?
- A lot of things seem to point towards this potentially being a commodity space, but I'd be curious to hear your thoughts.
- You mentioned integrating with Podia and having a video provider that “plays nice” as being a key differentiator. I'd love some more color on what some of the advantages for you all would be of having a video platform that has -- I don't know if it's a better API or just deeper integration into Podia. How do you think that would change the product experience?
- What other roadblocks are there besides editing for people who want to make videos?
Interview
Let’s talk about video as a part of online courses, what part video has to play and why it's important.
Len: It's important because of a combination of demand from consumers and a need for course creators to differentiate content and create higher perceived value than a course that's strictly text or audio or static files. Consumers want video because they’re used to instruction from an instructor, and the closest thing we have to that on the internet, at least with self-paced courses, is video. For cohort-based courses it would be streaming video. People want to see the person that's teaching them, they want to feel that person's energy, they want to be pulled into the content in a way that's immersive and rich. And we just don't have a better way to accomplish that right now that's accessible to most creators than video.
That's what makes it important. It's been interesting to see some of the ways that the use cases have expanded and creators are capitalizing on that. But I think that's the crux of where video plays into courses.
Diving into Podia specifically, could you talk about how Podia uses video hosting and streaming and how you monetize off of it?
Len: Video hosting and streaming are part of the all-in-one package that we offer for creators. The promise of Podia is that it's the only platform that you need to sell your digital products. Being able to post your videos there without using a third-party provider is a big part of that because the options for creators to self-post are not that great. They can post on YouTube for free, but then their audience is anonymized, and the platform markets competing videos alongside theirs. Or they can host on a premium video provider and pay for it, but the cost can be really prohibitive, especially for small business owners that have large video libraries.
So Podia offers hosting as part of the product, and we are able to use our volume to leverage better pricing than any individual creator could ever dream of getting themselves. Even with that, it's still the largest line item in our COGS. Continuing to stay on top of that cost and renegotiate those contracts as we grow is really important for us. That's the role that hosting plays. We use Wistia on the back-end for hosting video.
For live streaming, we integrate with Zoom and YouTube Live because we haven't seen an API that's really done everything we want it to do for streaming video. So we're letting Zoom and YouTube do the engineering work for us on this.
Let’s go in deeper on the point about video being the largest line item, how you guys think about how that affects pricing at scale and how you approach that.
Len: It's a pretty typical all-you-can-eat portfolio cost distribution. We don't have usage-based pricing for videos, so we certainly have a handful of creators on whom we lose money because of the size of their video needs. But overall, the goal is always to offer pricing options that are affordable for creators at every stage of the journey and to do it in a way where we remain a healthy company with healthy margins. That's the challenge we're always trying to solve. We think about how can we offer a predictable tiered pricing, which is not at all what we get -- or what anybody would get -- from the video provider, but we take that variable pricing from them and turn it into predictable tiered pricing for creators so they know what they're going to pay every month and don't have any surprises when they upload 10 extra videos.
Could you go through the use cases of video within Podia, both hosting and streaming, and then talk about what the integration points are with the product and where users will touch video?
Len: There's very little core video technology that we want to build directly into the product. We integrate for everything. Zoom has over 1,000 engineers working on this problem that is a core but limited part of our broader offering. We're not building video tech here. We're focusing on the big tech wins that make it easier for creators to start selling scale.
For video hosting, that means choosing a secure, stable, and powerful video platform that we can make natively available to our creators through API. For streaming, it basically means the same thing, but we're letting users bring platforms that they're already using and that are part of their existing workflows into Podia, and making it more seamless and adding value on top of what they would be able to get just using those platforms on their own.
The reality is that we're far better off outsourcing that core engineering work to platforms that are focused on solving the video problems, so that we can solve all the problems surrounding the video that the creator's trying to sell.
How does the streaming end work? Do creators embed a YouTube live stream or Zoom links on a page that they can share with their folks?
Len: That's exactly right. The biggest downside with YouTube Live for creators is that they don't own their audience. Their audience is totally anonymous to them. They can't take their audience with them, they can't email their audience. YouTube owns that relationship. What we're offering with the YouTube Live embed is the ability to gate a YouTube live stream behind a Podia paywall or email gate, so that you can either sell access to this webinar or streaming, or you can at least require an email address so you can begin to move your audience off of YouTube and into a place where you can own that relationship and be in their inboxes.
Similarly, I think one of the core issues with Zoom is that it's really difficult to monetize if you're just using the Zoom platform. So we handle all the Zoom registrations via API and then we embed the Zoom player behind a Podia checkout process so that you can either require email registration or you can sell access to a Zoom webinar or Zoom meeting. Then after the meeting, if you want to make the recording available, we'll process the recording and put it on the site so that anybody who registered for it through Podia can come back and access the recording.
Are there any aspects of this where you could imagine building something different on your end versus going to one of these vendors?
Len: I would say, in general, if it exists and it's good enough, we'll buy it. Everything that we build, we build because we believe that we can do it much better than the existing solution and because we believe that building ourselves will let us serve creators better. So we built our course platform, our site editor, our community platform, the affiliate marketing platform for creators -- the underlying tech that brings all of these different product types and data points into a single place together. But things like video platforms, text editors, email delivery -- we don't really see these as key differentiators for Podia. There are vendors that are focusing all of their energy on solving these problems, and we're very happy to be their customer rather than to build and maintain these things ourselves.
Would you say that, between Udemy and Coursera and Podia, the video aspect of the experience is going to be very similar?
Len: I would say that's true. I don't know exactly what Udemy uses, but I know that several of our competitors are using the same underlying video tech that we are. I haven't spoken with any creators who have mentioned the actual video player or video experience as one of their driving factors for choosing the platform.
What are some of the things you think about in choosing a hosted video provider?
Len: When we compare the leading services here -- we're not looking at a lot of emerging upstarts -- at that level cost is really the primary factor for us. We have relatively standard needs. We need stability, security, performance, video quality, flexibility of video quality so that creators can serve people with varying internet speeds, an API that lets us make the platform a seamless part of Podia. Roughly speaking, any of the top platforms can serve those needs. So for us, it's a question of which platform that does all of these things makes the most sense from a cost perspective? The answer to that may change over time, depending on the volume and depending on how we're doing it.
Several of the platforms -- at least all that we've looked at -- use different variables for pricing, and that's not by accident. The two I can speak to with the most familiarity are Cloudflare and Wistia. Cloudflare, for example, will charge primarily based on minutes watched, while the bulk of our Wistia charges are based on video stored. The result is that you just have to do a lot of math and modeling and guesswork to understand how the provider you choose is going to impact your underlying costs.
Have you given thought to the two different kinds of video providers, like Cloudflare and Wistia on the one hand, and on the other hand, like Mux and Cloudinary that are a little more about building a video experience versus using one off the shelf?
Len: For us, it has always come down to: we haven't seen enough customer demand for custom video solutions that it would make sense for us to explore doing something that requires a lot of dev work and building and bending to build something custom. It's important, but it's a limited part of our broader offering. Ultimately our customers care about, "Can we help them sell more products? Can we help them reduce their costs? Can we help them achieve better results for their customers?" Video accessories and video customization -- creators really see those as micro optimizations rather than fundamental things that we can be doing to help them succeed.
Sacra: It's interesting that video is so pivotal and important as a technology to connect people over the internet, and yet it doesn't matter which hosting provider you go with in a way, because creators don't really care.
Len: Yeah, creators don't really care. And video is not going away. It plays a role that it has played for a long time, and it will continue to play this role for the foreseeable future. Video is the closest thing we have on the internet to IRL. That was true with recorded video, now it's true with streaming video, it's going to continue to be true with all the advances that will make video more rich, immersive and interactive. So things that may be on the edges now, like in-video commenting and in-video purchases -- there's going to be a time when these elements become mainstream and creators will begin to demand them, but the video platforms will adapt.
They'll have to adapt and they have been adapting. Things that were table stakes now were not table stakes maybe six years ago, when we first signed up for Wistia. The feature set looked very different then, but in general, the leading players have kept pace with the demand. Even if it gets to a point where creators demand things that are maybe more cutting edge now, I do think this is a market where the leading players have done a fairly good job of keeping up with that demand.
How do you think about switching costs with video? Have you done anything to make it easier to potentially switch away from Wistia in the future?
Len: I'm getting out of my depth here technically, but from the discovery work that we've done, it's not necessarily complicated. It's just a matter of engineer hours and of running the migration in a way that is safe for your infrastructure and in a way that the creator never notices. Typically it would look like starting with some kind of pilot, where we host new videos that come in on a new provider for some months to test how well it handles our needs. Last time we looked at this, we were planning a three to six month pilot depending on performance, and then doing the full back-end migration after six months. It wasn't particularly complicated to do. It was just a matter of changing where new videos get stored. And then the back-end migration was not particularly complicated, it was just -- well, a developer would probably hate me for saying that, but it's like a database migration, but you're moving videos. The only thing that complicates it is the sheer volume because we're talking about millions of videos here.
I'm curious about your take on video more broadly and how you see it evolving. If I look at the Podia website, there are a couple different forms of video under features: there's the more direct hosting of video and live video, and then there's stuff like webinars where you're serving as the ticketing booth for people to access videos. Do you have thoughts on where this is going and how you see expansion of those use cases?
Len: There's no question in my mind that live video will trend towards overtaking recorded video. Obviously it has proliferated over the last couple of years, first with the rise of Twitch and streaming, and now with everybody on Zoom meetings and webinars over the last 18 months. We're definitely seeing more and more creators add live video into the mix.
Also, short form video has been really disruptive at a macro level, when you think about the rise of TikTok and every other social media platform adding short video. We're still seeing that used far more on the marketing side for creators than on the course delivery side, but I would not be surprised at all to see it infiltrate the course experience in the coming years.
Those are probably the two biggest trends that we've got our eye on right now. Other than that, interactive in-video engagement, commenting, purchasing -- any way you can make video interactive, people are trying to do it. I'm personally going to be really curious to see what wins out there.
As far as picking partners, how are you thinking about getting prepared for an explosion of live video or short form video?
Len: I think the key in this environment is making bets on the partners that you think will be at pace with or ahead of everyone else. This is felt far more acutely right now on the streaming side than on the recorded side. But as progress in recorded video tech happens, I think we'll likely have a very different conversation than the one we've had today about what the needs and key differentiators for creators are. But I do expect the leading platforms to keep pace here.
A lot of things seem to point towards this potentially being a commodity space, but I'd be curious to hear your thoughts.
Len: I wouldn't necessarily disagree with that, specifically talking about the video hosting space. I'm personally really curious about where it'll be de-commoditized. I think there's a chance that it gets de-commoditized in ecosystems. The strength of Zoom's ecosystem, for example, right now is kind of a hidden beast, but many people are deriving massive value from Zoom's marketplace and the tools that you can use there. I'd be very curious to see what Zoom does, if anything, with recorded video.
I wouldn't be surprised to see the breakout video platforms be the ones that play the most nicely with the other tools in creators’ workflows. To me, it makes more sense as a place for video platforms to differentiate than on the core tech, because it seems like the core tech is advancing at roughly the same rate across the market. That's something I'd really love to see. Obviously anybody that wants to come in and integrate natively with Podia, you should do that, but that seems like the obvious place to me.
As far as the role the video is going to continue to play in courses and in digital products in general, we're going to keep chasing the dragon on how it feels to actually interact with people in real life. That's where all of these advances are moving us toward, and we're obviously still far away from getting there. We're having this Zoom call and I'm enjoying myself, but it would be very different if we were both sitting in Brooklyn and having a conversation on barstools next to each other. I think everybody in video wants to move us closer to that reality. I don't know how close we are. I think we're getting closer every year. I think the rate of change is increasing, but I'm personally more curious than confident about what the big advancements are going to be.
You mentioned integrating with Podia and having a video provider that “plays nice” as being a key differentiator. I'd love some more color on what some of the advantages for you all would be of having a video platform that has -- I don't know if it's a better API or just deeper integration into Podia. How do you think that would change the product experience?
Len: One of the big challenges for creators is, not just having video or shooting video, but taking raw video and turning it into a really beautiful product that is then ready to sell to a consumer. There are many steps that are required in between turning on your webcam or turning on your camera and having that finished product. A lot of those steps currently take place on third-party software that doesn't touch either Podia or the video platform, in iMovie, Final Cut Pro, Camtasia or one of these other editing apps.
Some video platforms have kind of "lightweight" editing experiences in the app, but there’s a real opportunity for somebody to really replace one of those tools. A five-star experience would be: a creator uploads a raw video to Podia; within this video UI they are able to edit the video down; they're able to remove verbal tics and pauses; they're able to add stock music; they're able to add end slates and closing slates and turn it into a finished product in a way that feels automagical. We're a long way from that, but I think that’s going to be a really powerful unlock that will enable a lot of people who were struggling to become creators, or who wanted to become creators but are scared of some of these technical things, to be able to pursue this career.
What other roadblocks are there besides editing for people who want to make videos?
Len: The tech -- a lot of people are scared about the tech. If you Google the question, "What tech do I need? What equipment do I need to shoot video for an online course?" You'll be inundated with advice, most of it conflicting. It’ll range everywhere from “You can just use your iPhone or Android phone and do your entire video on that” to “You need an eight point ring and a lighting setup and a boom mic and a grip and a gaffer and a production crew.” Even though there is the option of just shooting with your phone, the fact that these options are offered to creators is overwhelming.
I've talked to a lot of creators who think, "Podia suggests that I just shoot on my iPhone, but the fact that people are suggesting all of these alternatives means that that's probably the worst way to do it, right? I'm scared that if I do it on my phone, it's not going to come out well." Even though it can seem from the outside really easy to say, "Just shoot it on your phone and see what happens, you might surprise yourself," that can be a really limiting fear for a lot of people. I've talked to creators who have put off building a course or a digital product for a very long time -- years in some cases -- simply because they were scared of the practical aspect of the tech of creating these videos.
And just as many people are struggling with things that have nothing to do with the video, but that are more related to imposter syndrome and "I don't know that I have anything to share in a video. I don't know that I have the expertise to shoot a video that people will actually find valuable." Comparison robs a lot of people of opportunity in the video space, where they see Casey Neistat and producers on YouTube that are putting out stunning drone footage of their palatial mansions or Maui. And that's where they're pontificating on how to create an online course. The creator sees that and they're like, "This is unattainable. Why bother?"
I would say that there are a lot of obstacles to getting started with video and maybe only half of them actually have to do with the act of creating a video.
Sacra: I can imagine shooting video on an iPhone was controversial at some point, but as I was watching the Apple event the other day, I thought, "It really feels like they've just dedicated themselves to making this thing an insane video camera every year."
Len: I love those billboards that are these gorgeous, stunning shots, with the only headline saying that it’s shot on an iPhone. The reality is you can create stunning videos on an iPhone. There are YouTube channels with hundreds of thousands to millions of subscribers that shoot all of their video on iPhones. The gap between having an iPhone and having a DSLR or a really fancy video camera, especially when it’s in the hands of a lay person, is really narrow if not obsolete at this point. Sure, there are a lot of things that somebody with a Hollywood camera can do if they know what they're doing, but if you put one of those $20,000 RED cameras in my hands, I'm going to shoot something that's probably a hell of a lot worse than the average YouTuber can do on their iPhone.
Disclaimers
This transcript is for information purposes only and does not constitute advice of any type or trade recommendation and should not form the basis of any investment decision. Sacra accepts no liability for the transcript or for any errors, omissions or inaccuracies in respect of it. The views of the experts expressed in the transcript are those of the experts and they are not endorsed by, nor do they represent the opinion of Sacra. Sacra reserves all copyright, intellectual property rights in the transcript. Any modification, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, or selling any transcript is strictly prohibited.
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