Netflix on Blast

Santa Fe startup Xerb aims to disrupt a stale distribution model and get filmmakers paid

Xerb Founder and CEO Eric Streeper created his streaming company to serve independent film creators and their fans. (Julia Goldberg)

When he graduated from college a decade ago with a finance degree from the University of Denver, Santa Fe native Eric Streeper moved to California and began working in the royalty department for an entertainment business management company. His job included divvying up royalties to band members, and also eyeballing royalty statements to find mistakes that shorted the musicians.

"I got a taste for how crappy the entertainment industry really is for anyone who's creative," Streeper says.

The company also represented a YouTube star—a performer who, at the time, was reportedly the first YouTube personality to hit one million subscribers (then-teenager Lucas Cruikshank playing the character Fred Figglehorn).

"Through that, I saw that there was this big perception gap," says Streeper, now  33. "People thought these YouTube people were making a ton of money, when in reality they were getting a ton of exposure from their channel … but they really weren't making very much at all."

These experiences and observations planted the seed for Streeper's new start-up, Xerb, which aims to disrupt the streaming industry to benefit the creators. I visited with Streep Nov. 22 at Xerb's offices in the Santa Fe Business Incubator, where he was demoing the product as part of Global Entrepreneurship Week.

Essentially, Xerb provides different organizations their own streaming channels and centralized subscription management for customers. These function "like individual Netflix," Streeper says, except "they're all curated by humans instead of algorithms."

(I thought this sounded like a positive development, given that my own Netflix account has been making nonstop recommendations for movies in which people fall in love at Christmas—a massive algorithmic error, unless all these films end with the happy couples also being decapitated.)

Xerb recently brought on its 18th channel: the Wildlife Conservation Film Festival. Other channels include The Santa Fe Film Festival, Independent Shorts Award, Classic Film Academy, On Native Ground and Kids First! While some member organizations hail from New Mexico, Xerb's reach has proven, so far, international in scope. SFFF will officially launch its channel to customers on Dec. 7.

While the online landscape has changed and grown dramatically in the last decade, Streeper says it hasn't proven more financially beneficial for creatives who were hit hard last year by changes in YouTube's monetization rules.

"Some creators on there have lost 6% of their revenue overnight because of an algorithm change," he says, "but even before that, average revenue for a YouTube was maybe $1,000 per one million views, so you need a lot of million views to even make a … living wage doing it."

Streeper also had been considering Netflix's role in distribution and its massive growth from direct-to-consumer video rentals to streaming to film studio. All the companies that had modeled their streaming services on Netflix—Hulu, Comcast and Amazon, to name a few—were essentially "cloning a 10-year-old model," he says. That lack of innovation provided "a big opportunity that is really interesting and exciting."

Xerb doesn't require exclusivity from its creative partners, nor will it be providing its own content or channels. "We just want to partner with people who are creating content and make it so they can release that content themselves and control their own distribution."

Customers who subscribe to individual channels are less likely to encounter endless titles in which they have no interest (see Christmas rom-com story above) because each channel is curated by the organization itself. Moreover, "for a lot of people, if they know their money is going directly to support the people making the stuff they're watching, that's something they are more likely to get behind and feel better about paying for," Streeper says.

The companies pay nothing to Xerb to set up—and set up is easy (Streeper utilized his tech background and training to build the platform on the React framework). So far, subscriptions range from $2.99 per month to $6.99 per month. The Santa Fe Film Festival's is $5 per month.

Xerb takes 30% of the price of subscriptions, but pays the payment processing costs, so it works out closer to 23% or so, he says. Regarding TV-connected devices, for now Xerb works with Chromecast, and will probably target Roku next.

As for his company's name, Xerb pays homage to the now-defunct border blaster radio station XERB, made famous by George Lucas in American Graffiti.

"Getting around traditional distribution was that tie in," Streeper says and "… it also had a film tie in; that's why we liked it."

Focusing on distribution for his startup "may sound boring," Streeper says, but it's crucial. "It really is the place from which all power is derived in film and media. For us … the critical thing is opening a kind of distribution that was never available before to anyone, so all you have to do is make a good film and you can get it out there and you can monetize it."

with short films, hors d'oeuvres, a photo booth and raffle
5:30-8 pm, Saturday Dec. 7
Santa Fe Brewing Company,
35 Fire Place, 424-3333

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