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The Culture Machine Story

MUMBAI: Culture Machine CEO Sameer Pitalwalla has reasons to be happy. He has just signed a deal with YouTube’s rival Amazon Video Direct. Having raised Rs 111 crore (Rs 1.11 billion), his company is also close to being operationally profitable. Small wonder, the man is keeping back-to-back meetings, sometimes at late nights, but always with a smile.

There are no immediate plans to produce original or exclusive content for Amazon Video Direct. But if it ever comes to that, Pitalwalla is secure in the knowledge that he has the creative staff and the technology to generate good content almost instantly.

Sameer Pitalwalla insideThe deal fits into Pitalwalla’s growth plans. “Culture Machine has already crossed 500 million monthly views on YouTube and 50 million monthly views on Facebook. We have just signed a deal with Amazon Video Direct and hope to gain more viewership on that platform as well,” Pitalwalla said.

Culture Machine plans to achieve a target of one billion in terms of monthly viewership in the next 15 months.

“We are in talks with a few over-the-top (OTT) platforms to deliver our content, but nothing has been finalised yet. We have also licensed some of our content to Epic TV,” Pitalwalla said.

At the heart of Pitalwalla’s confidence to achieve all these aims lie high-tech IT-based tools which the company has developed in-house, such as Intelligent Machine, Video Machine and Business Machine, to create and manage content for brands as well as channels.

Culture-Machine-cover-imageIntelligent Machine is an algorithm that analyses some two billion videos on a daily basis and spits out a ‘content recipe’ about the kinds and genres of content to produce, the favourite content among a particular demographic, or even data related to viewership.

Video Machine can actually churn out any desired type of high-quality video content in seconds—much faster than a human being would take to create a video.

The company uses these content tools to keep its viewers engaged at very short notice, especially on the social media pages of its content brands. This would also mean that the company would have no problems scaling up its operations rapidly as per demand.

The Culture Machine FAQs

  • Whodunnit: Sameer Pitalwalla, a former executive at Walt Disney India and a graduate from the University of Westminster, and Venkat Prasad, a former product manager at YouTube, team up.
  • Whydunnit: They believe that regular TV has its limitations and that digital is the future. They also estimate that the size of the market they can tap into is around $1 billion in terms of total TV ad spends, which will change as video and audiences go increasingly digital.
  • Howdunnit: By raising ‘Series A’ round of funding of $3.5 million from Singapore-based venture capital fund Zodius Capital, sometime in July 2013. In January 2015, the company raised $18 million from Tiger Global, Zodius Capital and Times Internet to strengthen its technology solution and create content.
  • Brand Associations: Lakme, Procter & Gamble, Unilever, Havells, Johnson & Johnson, Microsoft, Tata Motors, Fox Star Studio and others.
  • Popular For: English language web series ‘Alisha’, which features on Blush, a female-focused channel on YouTube. Being Indian channel is targeted at urban North Indian youth. Put Chutney is for youth from urban South India.
  • Milestones: Culture Machine’s channels crossed 500 million monthly views on YouTube and 50 million monthly views on Facebook.

Culture Machine has YouTube channels that are distinct in positioning. Being Indian is a channel aimed at the urban North Indian youths aged 18–24. While Put Chutney is aimed at an urban South Indian viewership, Blush is targeted at female viewers. There is also Being Indian Music and a food channel, among others. “We intend to get into more genres shortly, based on the feedback and viewership data,” Pitalwalla said.

Screen Shot 2016-02-15 at 2.34.41 PM

Being Indian is the most popular of the lot. “Our Being Indian channel on YouTube has 10 million active users and 15 million viewers every month. Our average watch time across channels is around 70%,” Pitalwalla averred.

Culture Machine is all set to renew some more seasons of its popular English-language web series ‘Alisha’, which has completed its first season on the female-focused YouTube channel Blush.

Yet, a few years back Culture Machine was just another start-up. In fact, the Culture Machine story took root in 2013 when, Pitalwalla, a former director of video and celebrities business at Disney India, and Venkat Prasad, a former product manager at YouTube, met at a conference in California.

Sometime after that, they founded a technology company called Culture Machine, which produced video for the internet space. The company raised $3.5 million as their very first round of funding in December 2013, led by Zodius and Times Internet. To date, it has total funding of $22 million.

Today, the company has 350 channels in its network across categories including music, comedy, news, beauty, lifestyle and makeup.

In its first year of operations, Culture Machine did not have any long-form shows, though it began with Being Indian, its first YouTube channel, which is still very active.

Screen Shot 2016-02-15 at 2.23.49 PM (1)

During its second year of operations, no fresh shows were launched. It was a period of consolidation and preparation.

In the third year, Culture Machine produced three shows, namely ‘Alisha’ on its Blush channel, ‘Black Sheep’ on its Rascalas channel and ‘Ctrl+Alt+Del’ on its Put Chutney—all sponsored by brands. The company has so far produced 500 hours of content.

This year, Culture Machine has lined up four more shows for its YouTube channels Blush and Being Indian and also finalised a deal with Amazon Video Direct.

The company also aims to increase its revenues from sponsorships, advertising inventory, content syndication and content-related merchandise such as T-shirts and other items.

Culture Machine is expanding its staff strength. “At the moment, we are in the process of recruiting people with knowledge of deep machine learning (artificial intelligence), with which we plan to improve our analytics algorithms like Intelligence Machine, in order to gain further insights into our viewership patterns and perhaps even predict these. We are essentially a technology company that creates digital content, rather than a pure content company,” said Pitalwalla, preferring to keep Culture Machine’s shareholding pattern a secret.

So, is Culture Machine operationally profitable? “We are close to it,” Pitalwalla said, while declining to provide the financial details.