MTGx – Internal Digital ‘Startup’ at MTG

Modern Times Group (MTG) announced their new digital venture today, called MTGx. The idea behind it seems to be to consolidate their digital offerings into a new ‘startup’ in order to quickly adapt, pivot and innovate without being limited and restricted by MTG’s internal workings and the inherent rigidity of a large company.

To me it sounds like a well-funded ‘startup’ within the media conglomerate that already starts out with some pre-existing assets. MTG has also managed to hire people with impressive resumes to head up the project. Earlier in the year they poached Rikard Steiber from Google and made him Chief Digital Officer(CDO – Collateralized Debt Obligations?) at MTG and head of MTGx.

MTGx’s tagline is:

For decades MTG has been in the forefront of entertainment broadcasting. Now we want to revolutionize the digital entertainment industry too. With MTGx we’re combining the power of a global media group with the energy of a startup, to turn the grey corners of Internet into amusement parks. And if you’re the top talent in your field, we’d love to have you on board. We can assure you, it’ll be fun.

To me it seems like MTGx is a great way enable quick adopting, prototyping and pivoting (Lean style) while still having the financial clout of  MTG. I am actually rather interested to see what they will do in the future, their current products are quite diverse and I suspect they need a rather large team to keep them all going, not that I should complain about a company having to hire a lot of people. Anything that helps Swedish GDP along makes me happy.

MTGx splits their products into four different categories: xPlay (Core Services), xVentures (New Services), xCreations (Digital Production) and xLabs (Development Shop)

xPlay includes Viaplay, TV Play and Sports
xVentures includes Music, Games and Like.TV
xCreations includes Mobisodes, Webisodes and TV Extensions
xLabs includes Web / Apps, Social and Sign on

The xPlay area mainly circulates around Viaplay as far as I can tell and it is pretty much a Netflix competitor in Sweden. Priced at 79SEK/m for movies and tv series. This area has massive potential but they need to be able to offer a better service with larger offering than Netflix et al.

xVentures is the most interesting part in my opinion, this area will focus on the actual new services and a lot of good things that could come out of this. I am especially interested in the collaborations with startups, that they claim will be part of xVentures:.

As part of this effort xVentures will establish presence in start-up communities in several countries, with an initial focus on Sweden, the UK, and the US, to find partnership and investment opportunities.

Both partnerships and investments could be very beneficial to start-ups in these areas. MTG has huge reach with their media offerings and they sure know how to handle themselves on traditional media so I would trust them to run promotions. More investment money is always a good thing (as long as it is sensibly spent of course) and there is a lack of VC money in EU compared to the US so I am quite delighted about MTGx’s xVentures.

However, on the subject of xVentures, I am a bit worried about their current products, primarily Viagame and Like.tv.

Viagame is in a hard, competitive business. Selling PC games online is NOT easy in this day in age. Steam has a near monopoly on the main stream (and to an extent indie) scene. EA (Origin) and Ubisoft (UPlay) are trying to get in on the action and GOG has the niche market of older games (without DRM) in their pocket. What does Viagame have? A website, with a ‘shelf-ware’ distribution system and TV advertisement. TV ads are worth a lot and I did hear about the company via their Swedish ads but it is not an easy market. Just look at Gamersgate, the quite established Swedish digital distributor – in 2011 (most recent figures available) they only had 35m SEK in revenue, and a minor loss. It is not an easy business and I think Viagame needs to do more than they currently do to become a contender in the space. Don’t get me wrong, more competition is great and I would love for them to succeed but to do so, they need to have an edge.

The traditional ways to generate value in the IT economy is:1) Lock-in 2) Novelty 3) Efficiency 4) Complementaries. Viagame currently has none of these, though I could see both complementaries and Efficiency playing a part in the not too distant future. Complementaries as MTGx other products might be very good compliments to selling games (producing a video game review show or such perhaps). Efficiency as I assume it was not very expensive to set up the service and once it is up the fixed costs stay the same and the margins go way up – though I still suspect they won’t have an easy time generating enough revenue.

Like.tv is a second screen service, I never understood them and I am not sure how they will generate any money but I can see the use for live statistics, polls and betting. Other than that I fail to see the point. However, it is wonderful compliment to MTG’s current offerings, which mainly revolves around TV. It is actually brilliant but I am not sure if it will  actually make any money, mobile (incl tablet) is hard to monetize – the ad revenue isn’t exactly stellar for these devices.

I have been a bit negative toward the end of this post but I do hope this venture will be a success for MTG and those involved, innovation is damn important and will in the end benefit the consumer. On a related note, the stock markets appear to be quite neutral to the initiate, MTG closed 0.37% up.

In this stage they seem to be mostly recruiting new talent – over 25 positions within the ‘startup’. A quick glance suggest that they are building a solid backend team (Venture mangers, financial mangers, etc) but also investing heavily in new technical employees. Last I heard lots/most of the technical graduates in Sweden got swallowed up by Spotify and Skype but MTGx may be able to compete for these graduates in the future as they do have solid financial backing and are offering a startup environment – or claim to at least.

Or they can just hire me (hint hint nudge nudge) as I am soon done with my master. The results from my last exams are just out and I am officially done with all courses and only got my thesis to go. I shall soon return to Stockholm! In all seriousness though, I am (causally) looking for work so any hints would be greatly appreciated. See About for more info.

P.S., in case someone at MTG(x) reads this; the email at the bottom of your page says jobs[at]mtgx.com but as far as I can tell you don’t actually own that domain,  nor is the mail server run by you? I assume the correct email is either @mtgxjobs.com or @mtgx.se : ).

Edit 00:38 14/06: Just a few minutes before this post went live Rikard Steiber posted a 40 slide long presentation about MTGx on Twitter, sadly I did not see it before finishing the post. I will write an additional post with thoughts on it tomorrow. It is late and I want to be awake when I go through the presentation properly. You can check out the presentation on Slideshare.

-P

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