Two years ago Chive Media Group started distributing its Chive TV streaming channel through connected TVs in bars and on Royal Caribbean cruise ships, adapting connected TV into a form of digital out-of-home advertising. Now the digital media company is spinning off that business into its own company called Atmosphere, which is expected to make at least $10 million in revenue in 2019, according to Chive Media Group co-founder CEO Leo Resig.
While other publishers were licensing user-generated videos mainly to post to Facebook and other platforms, Chive Media Group was arranging deals to extend its usage rights to connected TVs through its Chive TV OTT app, which it began distributing through connected TVs inside of bars in 2016. That app served as the proof of concept for what is now Atmosphere, which Resig claimed is “the only digital out-of-home app on what is essentially an OTT platform.”
Atmosphere effectively converts the TVs inside of 4,000 business locations currently — primarily bars and restaurants and eventually gyms, hotels, casinos, gas stations, cruise ships, etc. — into digital billboards, interspersing ads among videos licensed from regular people, Instagram stars and media companies, including Cheddar and Fatherly, which will distribute 30-second to one-minute video compilations on Atmosphere’s channels.
Given the context, the videos are intended to be watched with or without sound and are currently packaged into five channels within its OTT app, including Chive TV, which features a variety of viral videos, and Escape TV, which features nature videos. The company plans to add at least four more channels, such as Beach Bum TV, which will show videos of people surfing and doing other beach-related activities. Each channel streams five hours’ worth of videos on an endless loop, and the videos are updated weekly.
Atmosphere offers businesses free Roku devices to plug into their existing TVs and distribute its content, through its app is also available on Apple TV, Amazon Fire TV and Google’s Android TV. Atmosphere doesn’t pay businesses to play its channels but has commissioned independent studies that showed people spend 16 percent more time in bars that air Chive TV than those that don’t, Resig said.
To get a business to distribute its channel in a location costs Atmosphere $77 per install, but the company is able to make that money back within five weeks, according to Chive Media Group co-founder and president John Resig, brother of Leo. Atmosphere is not profitable because it is investing in hiring people to work at the company and is currently raising funding from outside investors, said Leo Resig.
Chive Media Group, which has never raised outside funding, decided to spin off Atmosphere into its own company in part because it would be easier to raise money for that specific business versus trying to convince investors to put money into a media company amid the industry’s ongoing business struggles.
“It’s hard to scale TheChive. If you’re an investor, it’s like, ‘Love what you’re doing over here with Chive TV and this Atmosphere idea,’ but investors want but to be able to show growth and quite frankly that’s the only thing that’s growing,” said Leo Resig.
Atmosphere primarily makes money by selling ads that appear between videos. Those ads can be targeted to specific venues or even specific devices within a venue, and locations can be geofenced so that advertisers can retarget people who may have seen an ad on Atmosphere with a follow-up ad on their phone. Anheuser-Busch InBev has signed a deal with the company to run ads in eight markets promoting its craft beers, said John Resig.
Atmosphere also operates a subscription business, in which businesses pay $37 a month to insert their own ads, or “digital signage,” to promote things like happy hour deals or loyalty programs. While Atmosphere is primarily a business-to-business play, regular people can also access its app through their connected TVs and watch its videos with ads or pay $3 a month to watch them without ads.
This story has been updated to reflect that people spent 16 percent more time in bars with Chive TV. It previously read 60 percent.