iStream shuts down; Founder laments investor apathy
It's official. The Indian online video aggregator iStream.com has shut down. The portal, which grew to 6 million uniques and 12 million video views a month, has pulled the curtain on the business. The company, which had raised $5 million from SAIF Partners in November 2011, could not raise further funding to stay afloat.
The business has huge infrastructure costs while the cashflows from advertising are yet to mature and cover the costs, while the existing investors were not ready to back them up nor they could raise fresh funding.
Below is the note from the founder and CEO Radhakrishnan Ramachandran.
"We can't believe this is happening! How many teams have cracked the 'Video on Demand' space and built a premium online product like ours. Everyone we meet says "iStream rocks". Then why are we shutting down?".
My team was heartbroken. They just couldn't rationalise the situation. Neither could I.
We were by far the undisputed leader in the premium online video space in India.. Our numbers were soaring â€“ in March we crossed 6 million unique users; and over 12 million video views. We had marquee brands advertising with us. And more!
All this, in just over a year.
And now we are forced to shut istream.com down â€“ something we built with so much passion, emotion and honest sweat.
I don't have all the answers as to why it had to end this way.
We had built a great technology and product team backed by a solid digital media team. We had millions of passionate users coming in every month, and rising by the hour. We had top brands endorsing our product â€“giving us premium ad dollars.
While one could debate the best business model for a digital media product like ours â€“ whether India is an ad driven digital economy; or whether the market is ripe for experimenting with a subscription model, the fact remains that online video is a capital intensive business, requiring patience and cash flows. This is not unique to us or India, that is how it has been everywhere.
Hulu, one of the global leaders, could reach where it is today only after 6 years (against little more than a year for iStream) and after raising over a 100 million dollars (against 5 million dollars for iStream) in funding.
In that sense, the journey to build a great video destination had, just begun. We did so many things right. We also knew there is so much that could have been done to build iStream to the levels we dreamt of. And we were on that long and winding road.
So, to all my content partners, to all the brands which came on board, and more than any one else â€“ to my users, millions of them who came looking for their favorite TV shows, that old classic movie or the latest news, day in and day out, and found it -a heartfelt thank you; but also an apology!
And to my team "the best I have worked in all my life. It was an honor and a pleasure. Thank you for being an integral part of the dream. Thank you for reposing your faith in me and Dhanu.
Guys â€“ are you ready for starting all over again?
One leg of our journey may be over before we reached the destination. Rest assured, the second leg of that journey begins, and this will be one that will home into its destination.
The dream continuesâ€¦.
Founder & CEO