It’s JumpTV–a cross between YouTube, MySpace and cable television–that distributes ethnic TV online to immigrant groups in North America and Europe. Since taking over as CEO of the company in 2005, when it was struggling to find a vision, he’s made JumpTV into perhaps the largest provider of online ethnic television in the world. The company now broadcasts 240 channels from 70 countries–from Latin America and the Middle East to China and Ethiopia. It has 37 Arabic language stations, including Al Jazeera, and recently signed with an Israeli channel to air a 24-hour soccer channel. “I think most immigrants who leave their country for a new one keep two places in their heart–one for the new country where they’re making their life, but always a place for their home,” says Paterson. “That’s really what we’re centering on.”
Paterson also hopes to carve out an Internet niche in which ethnic content and social networking can complement each other–allowing, for example, Romanian soccer fans in opposite corners of the world to watch a game together. He’s drastically changed the business model at JumpTV, which was founded in 2000 by broadcast attorney Farrel Miller to distribute pirated U.S. television signals over the Internet, as allowed by Canadian law. Now it concentrates on grass-roots strategies for obtaining content: It’s not uncommon for Paterson to send his staff trekking throughout the developing world in an effort to lock up local stations. His business partner, Kaleil Isaza Tuzman, has traveled a million kilometers in the past year, spending a night in Iraq’s Green Zone, being mugged by Lithuanian mobsters–even sharing a Sudanese hotel room with a goat.
The test, however, will be to see whether JumpTV can turn a profit–and attract advertisers–on a collection of small, disparate audiences. In the six months between April and September, JumpTV lost $12.9 million on just less than $1 million in revenue. Right now, with rates for individual channels starting at $9.95 a month, the company has signed 30,000 subscribers, and it has only just begun its campaign to bring in advertising. But it has lined up some impressive partners, including U.S.-based Comcast Corp. and Spain’s Telefónica, which have agreed to promote JumpTV to their broadband subscribers in exchange for a share of the subscription revenue. Investors expect the company to amass 500,000 subscribers by the end of 2008 and to turn a profit in 2009, according to Canaccord Adams, a Vancouver-based investment group that helped with JumpTV’s public offering in August.
Paterson’s timing appears to be good–immigration growth is at a record high, and telecom firms are rolling out new broadband Internet services at ever lower prices. Paterson aims to have 500 channels by the end of 2008. “JumpTV is a pioneer,” says Canaccord’s Steven Frankel, who notes that the company is only just getting off the ground. “We’re not talking about overnight success here … [but] there is a large, diverse, ethnic base spread throughout the world that is interested in this content.”
For the moment, JumpTV seems to occupy the ethnic-programming online TV niche all by itself. Already the firm has surpassed the ethnic-program offerings of traditional cable or satellite providers, and while companies like Apple have begun developing Web-to-TV transfer products (that allow you to see the Internet on your television screen), obtaining them is expected to be pricey. More so, these programs aren’t expected to offer specialized content. “What [JumpTV is] doing is really smart,” says Joseph Laszlo, a tech analyst at Jupiter, an independent market research firm in New York. “How competitive this market [will] become is still a very open question.”
Paterson, meanwhile, is trying to stay focused on the bigger picture, in which he says–quoting Microsoft Corp. Chairman Bill Gates–Internet television will “blow away” conventional broadcasting in the next year. A lot can happen in the meantime, however. The danger for JumpTV is getting too comfortable. “The pace of change in broadcasting is so fast that if we’re really going to succeed the way we think we can, we don’t have the luxury of going slow,” says Paterson. For the long term, however, Paterson is looking to the day when JumpTV will emerge not merely as the largest provider of online ethnic content, but of ethnic content overall. And as the line between Internet and television blurs, he thinks JumpTV could become the largest broadcaster in the world. “Why can’t JumpTV have millions of subscribers?” Paterson asks. “The demand is there, the people are there–we just have to deliver a high-quality product.” That’s a compelling future to predict.
