1Mby1M Incubation Radar 2011: ifood.tv, Menlo Park, California

For some, like Tyler Florence and Rachael Ray, cooking is their livelihood. For others, it’s a hobby. But for most, cooking is a necessity, a means to an end. Still, they want to cook food that looks and tastes good.

Based in Menlo Park, California, with offshore offices in India, ifood.tv was launched in 2007. This 1M/1M premium company is a popular destination for food- and recipe-related video content. On ifood.tv, foodies are coming together to discover new and interesting content, while professional chefs are using the platform to gain exposure and build their brand. Over the past few years, the company has aggregated a large library of cooking videos (more than 40,000) and text recipes (about 200,000) online; all the videos are hosted, managed, and streamed through the content management platform. Content is created by an in-house team of editors and sourced from professional chefs, video producers, authors, and media companies. The technology platform can deliver a blend of multimedia, interactive, and social features, and it can be reused to launch new Web 3.0 sites in other verticals.

The Team
The management team brings experience managing teams, launching Web products, and building traffic. Co-founder Alok Ranjan was a member of the new media team at IAC that launched HSN.com in the late 1990s. Most recently, he prepared growth strategy for Microsoft Corp Sales and Marketing group as a senior business strategy manager. At ifood.tv, he manages product development. Co-founder Vikrant Mathur has been part of two successful startups. At Telephia (acquired by AC Nielsen), he had direct P&L and product strategy responsibility. Most recently at Experthub, an online lead generation company, he was part of the senior management team and helped define and execute the product strategy and build the technology which led to the acquisition by Internet Brands. At ifood.tv, he manages marketing, business development, and network relationships.

The engineering and product teams have core expertise in SEO, data aggregation, semantic analysis, and knowledge generation (using natural language processing or NLP technologies), which are key factors for a Web 3.0 company. They are currently missing a VP of sales who can help to build a direct sales team.

The Origins and Competition
The idea for the company came in 2006, “when we, the founders, were trying to learn how to cook. Back in those days there were no videos online, and for anyone looking for recipes on the Web, the options were restricted to text-based recipes sites such as Allrecipes.com and Epicurious.com,” explains Mathur. He did not think these sites were very helpful because the food they cooked never looked like the food in their pictures; often, he would have questions about the recipe but there was no way to contact its author.

“During the process, what we found most useful, as a medium of instruction and learning, was Food Network, the cable channel. Being able to see the method and techniques was helpful; however, with Food Network, the menu choices were restricted to programming that was on-air. So, we embarked on the journey to bring food network online, and have an on-demand platform that people could use to access video-based cooking content from the convenience of their living rooms and kitchens,” Ranjan adds.

Back in 2006, ifood.tv was competing with the online arms of established brand names such as Foodnetwork.com and Epicurious.com. These sites are offshoots of traditional media units and thus extensions of the companies’ offline programming. ifood.tv believes that while they are powerful in nature, these sites focus on providing editorial content and fail to engage the users by not taking advantages of the interactive capabilities of the Web. Small, individually built cooking blogs and recipe sites are a source of similar content. Some of these websites are unable to cover the various niches of food and fail to attract a sizeable audience.

Today, the biggest competitor is YouTube since it has become the de facto platform for video content distribution. However, YouTube is still very much an entertainment platform for viewers. It does not support multiple formats or provide tailored content and focused community experience, especially for educational content and topics. There is thus a tremendous market opportunity to build new media sites, which would provide interactive community experience around niche content. ifood.tv’s founders believe that such a site will not only provide a platform for content creators to reach their target audience but will also allow them to choose the most compelling blend of video, voice, animation, images, and text to convey their message. In addition, such a site will particularly be attractive to advertisers because it will provide them with a targeted audience.

ifood.tv also aims to differentiate itself with its enhanced video-based learning materials and resources, and interactive online community to bring cooks, aficionados, and food lovers together across the world.

Focus on Video Recipes
The heart and soul of any recipe site are its recipes. With more than 40,000 videos, ifood.tv takes a different approach from properties such as Epicurious and Food Network by focusing on the visual aspect of learning to cook. ifood.tv claims to be the most trafficked video-based cooking website, and with its mobile app, all of these videos will be accessible to the user through a portable device. In addition, ifood.tv provides the tools to find and locate information quickly and easily through advanced search menus and intuitive, organized categorical searches (something that YouTube cannot do); all of this is possible through the taxonomy, knowledge base, and manual editing that all content goes through to enhance its value so that the site is not just aggregated videos.

Community
Having an online community to exchange recipes, swap stories, provide resources, and share an overall love of food is, for the founders, “icing on the cake.” The company works with more than 600 partners to produce and promote this content; in addition, thousands of people rate, review, and provide feedback on the content, which is designed to cater to variety of communities and contain recipes for traditional and more unfamiliar dishes.

Technology
The company has built a Web 3.0 platform that can be used to configure, manage and distribute videos and multimedia content; launch new sites and vertical search engines with minimal effort; and aggregate, process, and make visual representations of large amounts of data. All this technology is being leveraged to launch a new nutrition site in the next three to four weeks.

Online food media is large and growing market. Google reports that there are over a billion searches for recipe-related terms each month. Foodies come from diverse backgrounds, and food is largely a community and interest group phenomenon, but comScore Media Metrix data show that visitors to home/lifestyle-food sites are mostly female, between 35 and 44 years old, and fairly well off financially, with 57.3% having incomes greater than $60,000. This is the most sought-after group for brand advertisers and consumer packaged goods (CPG) companies. As foodies spend more time on the Internet, companies targeting this demographic are moving a higher percentage of their advertising budgets targeting this audience. ifood.tv hopes to tap into the display advertising industry, which emarketer forecasts at $30 billion for 2011; the $1.5 billion video advertising industry (emarketer estimate 2010); and the relatively new social media marketing industry to stay profitable.

When the company was started, ifood.tv was an unusual concept, and a lot of the initial success was based on word-of-mouth marketing. They were also covered by ReadWriteWeb and CNN India and received honorary mention on TechCrunch when they wrote about the space and one their early competitors.

The company has been generating revenues for the past three years and is profitable. According to ifood.tv, in the past 12 months, there have been an average of 3 million monthly unique visitors and close to 125,000 daily video streams.  There is a growing display ad network (currently more than 70 sites) using ifood.tv for their monetization needs. This year, they expect to grow more than 100% and be well over a million dollars in revenue.

Revenue
The company makes money from four major sources:

• Display advertising: Source campaigns through Ad Networks. Work with Glam, Federated Media, Meredith, and many others. CPMs range from $1.50 to $6.00.

• Video advertising: Source campaigns through Video Ad Networks. Work with Adotube, Yume, and Grab Networks. CPMs range from $5.00 to $10.00.

• In-text advertising: Source campaigns through Vibrant.

• Custom campaigns (involving social media and video production for brands).

The company is 100% bootstrapped, and the founders have invested $100,000 of their own money to get this far. At this point, they are looking to explore strategic partnerships, as well as financing.

With respect to strategic investment and partnerships, they would like to work with either an ad network who has an interest in the food space and can help build the ad sales team for both display and video inventory across ifood.tv and other network sites. Examples include Glam, Cox Digital (formerly Adify), Meredith, Yume, and Tremor; a big portal/content house (Yahoo, Demand Media) that may be interested in the video content and traffic and can help distribute this content and increase viewership; a food magazine (e.g., American Express Publishing) that may be interested in building or strengthening their presence online; or traditional media companies that may be interested in online video distribution companies. Examples are Comcast, Time Warner, and NBC.

In terms of VC firms, ifood.tv would like to work with a top-tier firm that has invested in content businesses/ad networks before because that’s what they are trying to be.

The growth strategy is to continue to grow traffic on ifood.tv through more content and distribution partnerships; increase revenue by building the sales organization to help sell custom campaigns (preferably involving video production) directly to brands; build an ad network for food properties; and launch Web3.0 sites in related verticals such as wine and nutrition and replicate the model built for ifood.tv.

Beyond the above, they are also thinking about health, fashion, and travel. I also feel that a site like ifood.tv can put together a strong affiliate network and monetize by selling products of affiliates on a revenue-sharing basis.

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This segment is a part in the series : 1Mby1M Incubation Radar 2011