Ever wondered how a bootstrapped company can compete with giants in the ever-evolving world of streaming? Join Zack Ellison and Shawne Merriman as they sit with Stephen Hodge, CEO of OTTera, a leading provider of streaming application development and distribution solutions. Discover the secrets behind OTTera’s success, from building strong partnerships to staying ahead of the curve in a rapidly changing industry. Plus, get an insider’s perspective on the future of streaming, including the rise of FAST channels, the impact of AI on content creation, and the growing importance of direct-to-consumer platforms.

Success Unleash’d Principles From This Episode

1. Be Where the Industry Is Going, Not Where It Is

OTTera’s growth is fueled by its ability to foresee shifts in streaming before they become mainstream. Stephen managed to unlock tremendous success by anticipating trends and building the right business plans around them.

2. Build Something Extremely Valuable

Stephen set aside his desire to chase validation and focused instead on creating undeniable value. By making his brand indispensable, he became too hard to ignore and unlocked huge opportunities.

3.Partnerships Are Everything

Stephen knew that the people you work with can make or break your business. Therefore, he aligned with the right people for OTTera. He surrounded himself with those who shared his vision and brought complementary strengths to his table.

4. Bootstrap First, Capital Later

Stephen emphasized how self-sufficiency breeds discipline. He stresses how many startups fail because they rely on funding alone instead of proving they can generate real revenue.

6. Adapt and Evolve Relentlessly

Stephen acknowledges that the media industry is transforming at lightning speed. Because of this ever-evolving reality, businesses that resist change will certainly be left behind. Meanwhile, those who embrace innovation are more likely to thrive.

6. Control Your Platform to Control Your Destiny

Stephen advises business owners, and in extension content creators, to secure ownership of their distribution channels rather than relying solely on platforms they do not control, such as YouTube or Instagram.

7. Resilience is the Ultimate Differentiator

Tough times create tough entrepreneurs, and Stephen fully understands this. He knows that overcoming the biggest obstacles allows business owners to build an edge that their competitors walking down an easy path would find quite difficult to develop.

8. Speed and Execution Matter More Than Ideas

Stephen warns against the danger of poor execution and how it kills many great business ideas. In order to achieve success, one must learn how to move fast and execute flawlessly.

9. Advertising is the Engine of Media

In today’s highly interconnected world, media platforms have become vital in advertising more than ever. Whether through traditional TV or digital platforms, any business can gain sustainability and experience growth with content monetization and targeted ads.

10. Think Long-Term and Stay Ahead of the Curve

Success cannot be achieved just by planning ahead of time. Stephen underlines the importance of creating a 10-year vision to experience sustainable success and constantly stay ahead of the countless shifts in your chosen industry.

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Watch the Episode Here

Listen to the Podcast Here

Streaming Innovation: How OTTera Is Revolutionizing The Industry With Stephen Hodge

We have Stephen Hodge, the CEO of OTTera in Los Angeles, with us.

How’s it going?

What’s up?

I’m keeping it going and getting excited about the end of 2024 and all the things that are coming up, most importantly CES.

I’ve been going to CES. When I’m walking around there, people look at me like, “What are you doing here?” I stick out like a sore thumb at CES with all the tech heads and all the other stuff that’s going on. I know what it is for me, but can you explain why CES and these types of conventions and stuff like that are important for you guys?

I’ve been going to CES for a long time. We first entered into this space in the early days, even before connected TV became the thing. It was tablets and mobile phones. CES is the main destination for anything in the consumer electronic space. For anything that’s involved in OTT, that space of having a streaming service, a streaming channel, or a platform, CES is a destination that’s going to have the products that you need to be on in order to reach people.

Companies like Vizio, Samsung, TCLs, LGs, Honda, BMW, and every potential device that has a screen, even Whirlpool and General Electric, are going to be in this place. You never know what these companies are thinking or what they have up their sleeves. It’s a great place to meet with companies that we’re already dealing with, but it’s also the place to meet companies that maybe you never would’ve thought would be entering this kind of streaming space. It has gone from something that was emerging for CTV to something that is a mainstay for the connected TV market, with the who’s who of connected TV all setting up in the Aria Hotel. It’s like a main hub destination that we have to be at. All of our partners and potential customers are there.

Let me ask one more question off of that. You’ve been going there for years. My first time was several years ago. I missed a year or two and then I came back. I was shocked at the size of the companies that attend this thing. How has it changed? I look at it like when you first start going, you are a rookie walking into the locker room. You’re getting on the scene. You might get a little bit of a hazing. It’s not the hazing that we had in the locker room, but you get that rookie bam a little bit, walking in the doors. How has your guys’ position changed? OTTera is in a market. You do business with so many different people. How has that changed from the time you started going to OTTera being real players when you show up?

The biggest change for me personally is I walk a lot less. At this point, I’m in a suite and a lot of my meetings are coming to me. Several years ago, I was walking the floors and the space in itself was very new. It wasn’t focused on one particular destination being the hub of where everybody in the connected TV space goes.

I was walking through the gigantic floors. We were going to every single booth and trying to figure out who to talk to. I also miss that because that was when you were going off gut instincts and being like, “Who is the person that’s the decision-maker in this booth out of all these 100-plus people that are here, the attendees?” There was some fun in finding out like, “Who is responsible? Who’s the person leading and managing the applications on the Samsung TV, LG, or any of these platforms?”

The biggest thing that’s changed, at least for me, is that we’ve built up a name for ourselves, and we are already partners with all of these key manufacturers. At this point, we have a suite. People are coming to meet with us. There’s a lot less walking for me. CES is still a great place. We have other people. The younger versions of me that are working for us are walking the floors. They’re still going to meet up with all these new players and bring the information back to me.

That’s the biggest difference for us. We are a fixture in this space. We have a name that is synonymous with the industry that we’re in, which is OTT. All the connected TV platforms know who we are. They’re accepting applications from us. They’re taking in channels from us. It’s a great place for us to meet up with those executives who have become, at this point, friends of ours over the years.

OTTera: The One-Stop Shop For Streaming Success

Stephen, let’s take a half-step back and talk about what OTTera is and what you’re doing. You’re at the forefront of a massive change in content and distribution. Talk a little bit about streaming and what you’re doing in this space.

Streaming, in general, is where we fit and what we do, and we are the most holistic company in this space. We touch everything from the development of applications that reach every single platform and every single operating system. We are a leader in FAST channel playout, distribution, and delivery. FAST channel, for those that don’t know, is a linear TV channel. The biggest difference is that the advertising can be dynamically inserted, so the advertising can be personal to the viewer. It is no different than watching YouTube and seeing an ad on YouTube. It is YouTube-targeted advertising meets traditional TV.

We’re a leader in that FAST channel space. We’re a leader in the advertising space of monetizing these different types of channels and streaming services. Also, we’re involved in the distribution of both applications, channels, and content to reach these different platforms. Where we are is at the exact center of what this space is. We’re adding value to many different platform partners in many different ways. We’re looking for apps, content, channels, and even advertising support. We’ve spent a bit over a decade building those relationships and building the reputation to be a noted, well-known, well-regarded company in this space.

Put some numbers around that for people that don’t really know. What’s happening in the media space is people are leaving cable. You’ve heard of this trend of cord-cutting. Everything is going to be delivered over Wi-Fi and streaming. The industry is going to be five times bigger in a decade than it is now. It’s going to be close to $3 trillion. Imagine that. All the content that people are watching on YouTube, Netflix, and Lights Out Sports TV is all streaming.

From Rookie To Veteran: A Decade Of Change At CES

OTTera builds these applications and these channels. You mentioned FAST channel. What that means for people that don’t know is it’s free ad-supported TV. It’s a traditional, old-school linear TV where it’s ad-supported. You don’t need to pay for a subscription. OTTera has made a name for itself in the space but a lot of people outside the space still don’t know what’s going on. Certainly, Shawne knows you guys well. You work closely together. Shawne, do you want to talk a little bit about the space and what you’re doing with Lights Out Sports TV?

Yeah. I was going to piggyback off of what Stephen said of them starting it years ago and getting into this market. The market has changed drastically. Sometimes, when you’re the first to market, people look at you a little crazy, like, “What are you doing? You’re the first there.” People, when they’re unfamiliar with things, stay away from it. They shy away from it when it’s unfamiliar.

When I retired from the NFL, I got straight into TV and started doing all the TV stuff. These were all traditional TV cable channels that were out there. I don’t think FAST came into play until ‘13 or ‘14, around that time. I saw it. Sometimes, I’ll get off of something with FOX Sports or I’ll get off a show on ESPN and they got all these other digital things going on.

You started seeing more digital outside when the broadcast was off. Before you know it, this whole FAST industry came around. People were scratching their heads like, “What’s going on?” That’s what pushed me to launch Lights Out Sports TV, which is a free ad-supported all-sports streaming service. The biggest reason why I chose to work with OTTera, for one, is because they have relationships and everything in this business, but also a proven track record and work with some of the biggest and the best.

For me, getting into a space when you’re coming from a different background is important to partner up and work with the people who have not only been doing it but also have a vision of what this business is going to look like ten years from now. That, to me, was very important. A lot of these people on cable are still looking at linear TV and they can’t transition. They’re trying to pivot, but they’re late for the game. OTTera is one of the leaders in that space and understands not only where the space is but what it’s going to look like in the next 7 to 10-plus years. That was more important.

My question to Stephen off of that is where do you see this thing going? I’m starting to see that even with the NFL, there is free ads-supported stuff. This wouldn’t have happened years ago. You would not get anything from the NFL or any one of the major leagues. Everybody’s seeing the rise in this space and seeing the capabilities and possibilities. Where do you see this thing going in the next 5 to 10 years?

The Future Of Streaming: Predictions And Opportunities

We’re about to experience some really interesting times. We’re going to see giants crumble and mammoths being built. We’re going to see a lot happening. The same trends that we see in the creator industry with these Twitch streamers and YouTube streamers that are creating their own brands, their own followings, their own conventions, we’re going to see that happening even more in this streaming space because of the growth of the capabilities and the adoption of AI in this space.

Platforms like YouTube are going to be overrun with content. There’s going to be more growth in people creating their own individual bespoke platforms that focus on their niche content, whether it is sports streaming news, finance, comedy, or whatever it is if there’s an audience for that. It is the same as what exists on YouTube, but discovery is going to be key. We’re going to see 5x or more of the actual revenue.

There is also going to be an increase in the amount of content. If that content is not able to be discovered, there needs to be a new way to discover that content. That’s going to be a growth in direct-to-consumer streaming services. There is going to be a lot more money circulating in this space because with a lot more people adopting this technology and consuming content in this way, advertisers are going to continue to lean in.

It’s traditional at this point. YouTube is very much traditional. In the same way that advertisers are leaning into traditional, this new linear space is going to become that. Discovery will continue to improve. More direct-to-consumer platforms are going to be built around this kind of content. More channels, more ad-supported video on demand, and ultimately more advertising inventory that brands can lean into to target users specifically based on their interests. They’re going to see a lot of growth in that space.

Also, what’s going to happen is, as Zack pointed out, more traditional companies are the ones that are acting too slowly to adopt this technology. We’re going to see them continue to do what we’ve been seeing them do over the last few months. That trend is going to continue. They’re going to start downsizing. They’re going to start selling off assets. They’re going to start shutting down. That’s going to make way for new companies to enter that space.

That’ll be the OTTeras, the Lights Outs, and the others that understand what is happening and that have built themselves a model that compliments that as opposed to trying to fight against it. There’s no reason to fight against that current. That’s why we continue to grow in this space. We’re not fighting the current. We’re seeing where it’s going and saying, “Let’s be there because it’s inevitable.”

You talk about the inevitable. A few years ago, you wouldn’t even have thought the NFL would ever be on Netflix. It never came across anybody’s imagination that something like that was going to happen. You see more games on different streaming services and different streaming platforms. My question is, what do you think is the next big thing? Ads are so key in this business. How do you see this ad side of free ad-supported plays handling out? You see some of the bigger ones that are doing extremely well selling ads. What do you see with this free ad-supported structure coming into play in this business?

Advertising has always been what the entire media industry has used to sustain itself. Even with cable TV, subscribers are like the icing on the cake, but at the end of the day, what does everybody talk about? The ads during the Super Bowl or the ads during American Idol. What are all these companies looking to do to supplement their productions? They’re doing ads. They’re getting involved in, whether it’s product placement or branded content. That’s going to grow. That’s going to continue to grow.

New brands will pop up and there are going to be more ways. What this particular avenue represents as an opportunity for advertisers of all sizes and all scales is the ability to reach their specific user demographic. In the same way that we see ads on YouTube that are really focused on reaching people that are on YouTube, driving people to other YouTube channels, etc., we’ll start to see that more in the connected TV space but trying to drive people to other streaming services or other ways of reaching your demographic.

For example, the amount of times that I’m watching YouTube and I see an ad for some type of a coach, like a life coach. You see these things all the time. It doesn’t apply to me but they’re running their ads on YouTube. They’re able to run those ads. Whether they can run those ads on FAST, they haven’t reached that point yet. When they’re able to run their ads on FAST and then direct people to their streaming service, those people who are paying for their website can pay for access to this content on a streaming platform, and that’s a natural progression for them.

As others are able to craft their own stories or turn their ideas into scripts and then those scripts into content, and then that content into channels or libraries of VOD content, that’s the opportunity for a direct-to-consumer service to reach these platforms, too. However, they still need to be able to target people to reach those.

There’s going to be a lot more exposure from an advertising standpoint. It’s not going to be tied with bleach, Coca-Cola, and carnival cruises that are advertising. It’s going to be everything, everything that can possibly advertise. Whether they’re looking to reach people in the Los Angeles area, the United States, or Mexico City, it doesn’t matter. There’s going to be a way to reach very niche demographics of people.

The Rise Of Influencer-Led Channels: A New Era Of Content Creation

More interestingly, it will be based on their personal interest. It’s going to be a way to capture massive amounts of a niche audience. It’s going to be a really great time for advertisers in that space and a great time for anybody who knows how to put together quality content and capture eyeballs. We’re in a space where we’re seeing individual influencers who have audiences that are directly competing with some of the biggest shows on TV. I’m very much looking forward to that.

Stephen, I want to interject. You hit on exactly what I was going to ask you. I was following the Netflix event with Jake Paul and Mike Tyson a while back. We learned a couple of things from that. One is that the tech quality has to be better because millions of people had a lot of buffering issues and missed key moments of the event. That’s one thing that’s going to help you guys quite a bit because you’re known for the quality of your technology and your ability to deliver seamless streaming live. That’s one thing we learned.

Let me run this thesis by you. My thinking is that every big influencer like Jake Paul or Shawne will stop monetizing on other people’s platforms solely, whether it’s YouTube, Instagram, or TikTok. They’ll still use those as a feeder to build a base following. Once you’re Jake Paul, you’ve already got the built-in audience of tens of millions of people. They’re there for you. They don’t give a shit about what platform you’re on. They don’t care if it’s YouTube, Netflix, or your own FAST channel.

My thinking is that all of the big influencers are going to be creating their own channels. That means there’s going to be, to your point, a proliferation of these channels. That’s going to create a bonanza for advertisers because they can pinpoint exactly who they want to target with digital ads. Not only can they say, “This person likes Jake Paul,” but within that universe, they can pinpoint the exact types of Jake Paul followers that they want. That’s where I think it’s going. Is that the correct way to look at this? Am I missing anything?

It’s the only way. There have been quite a few examples of this already. Mr. Beast already has his FAST channel. PocketWatch formed an agency to capture all of these kid and family-friendly influencers from YouTube and then build a network around them. They have channels that are PocketWatch. They have channels that are Ryan. They have channels that are Love, Diana. They have their own OTT platform streaming service. That’s the way to go, and that’s the only path to growth.

At a certain point, you have hundreds of millions of YouTube subscribers. That’s great, but then how are you going to grow further beyond that? It’s the same reason that Netflix had to incorporate advertising into its business model. They have reached a saturation point with subscriptions and were like, “How do we grow from this point?” For the influencers, you reached a saturation point in terms of followers on these platforms. How do you grow further? You grow further by having a platform that you can control. You grow further by not only being able to build that platform but also being in control of your advertising. On YouTube, YouTube is in control of that advertising.

For some people, they’re going to consume your content on YouTube regardless, and that’s fine. It’s proven to be in the high tens of millions of people that are consuming their content through these native applications, whether they’re on a smartphone, on the TV, or in the fucking refrigerator. It doesn’t matter. They’re consuming your content on these devices. We’re at a point where you can’t ignore that.

Companies like Vizio, which was acquired by Walmart, have posted their earnings to show that they generate more money in advertising on their TVs than what they generate from the selling of their TVs, which is still good. You have your Samsungs, LGs, and others posting astronomical advertising revenue figures on these devices. When you see that and you see those numbers, no one can ignore that. At some point, the influencers or the creator industry is going to embrace that. They’re tipping their toe in that arena.

There’s significant money or real money that’s being made there. There are billions of dollars that are being made there. The second that that is completely embraced by the community, not only are they going to have FAST, but they’re also going to have their own platforms. They’re going to partner with other platforms. They’re going to start to make sure that they are as entrenched in that space as they are in traditional social media.

Stephen, I want to add a thought. This is me putting on my investor hat. I can’t help myself. The way I think about investing is what really good investors do is identify themes in the world. Once they’ve identified that theme, the question becomes how are they going to make money off it? How are they going to monetize that theme?

Of the themes that I see with what you’re doing and what Shawne is doing, one is this theme of everything’s moving to streaming. In my view, one of the best ways to play is to partner with the builders of these streaming channels because, ultimately, there’s going to be a lot more built, and you are making money on the ads. There’s all this money coming out of traditional media or linear TV and it’s going into streaming. In my view, OTTera is a great way to monetize this theme of everything going to streaming.

The second theme that I like is, what’s the most valuable content? What do people want to watch on streaming? They want to watch live sports. They also want to have the option to watch sports on demand. That’s what Shawne has built with Lights Out Sports TV. He’s got some of the best live sports that have very strong followings but maybe aren’t big enough to be on primetime ESPN. They’re certainly powerful when you have all those together.

You two are really coming together in something incredible here in that you’ve both identified this trend that can’t be stopped. It’s like a freight train going 250 miles an hour. Nothing’s going to stop it. This industry is going to grow like crazy. It’s happening. It’s obvious even to people who aren’t in the space. What OTTera is doing as the builder and what Shawne is doing as the content provider in the most valuable segment of the streaming space is pretty incredible.

I agree. Sports, hands down, is going to be the most valuable in this industry. Almost every other genre of content is going to be under the threat of immense competition. AI is a beast and the content looks great. We could be AI. You can’t distinguish between what is real and what’s fake with AI. However, since pre-Roman times, sports have been something that has captured attention, whoever can capture an audience in the sports space and continue to grow in that space.

That’s why we’re seeing Netflix, Amazon, and all these streaming platforms fighting for sports rights. They got the content in the traditional streaming space. They got the content from movies, etc., but they know that in this next pivot, they’re going to need live sports. It’s more of a gamble with content at this point because anybody who’s a writer can run their script through AI and generate something. They can work with an editing team. The budgets are going to be coming down significantly. You don’t need the same access to talent to be able to tell a great story. Sports is a winner.

AI can’t get you one of these hats.

I like that hat.

The OTTera Advantage: Building A Bootstrapped Business In A Competitive Landscape

Stephen, you are talking about a great story. Zack, what’s up with that hat?

When I was out in LA with Stephen, I got this hat and there’s a story behind it. Stephen, tell everybody how much these hats go for.

Those hats start at around $5,000 apiece. The average price is around $30,000, but it could reach $70,000 or $80,000 in the 1st year.

You only give these hats to people that you’re a partner with.

We only give the hats to customers and partners. OTTera, as a company, is more than a vendor. We are a partner. We’re invested in our people. In the same way that you may see UPS drivers with their UPS socks, UPS shoes, UPS shorts, and UPS polos, you can’t go out and buy those. UPS is not going to give you one of their branded pieces of merch. At the end of the day, there’s value in that.

We want to make sure that anyone that we are partners with understands that we’re more than just a vendor. We’re not selling you a bottle of water. We’re selling the entire ecosystem. We’re selling the technology, distribution, monetization, consulting around how things work and where things are going, and analytics. What is the data telling us? What are the new markets that you should be looking into? We’re providing people with a level of Intel and customer support that is unrivaled in this industry.

That’s one thing that I know and I can say. I’ll take the Pepsi taste test challenge against any service. Our support is hands down the best because we have the knowledge and the boots on the ground to provide really great support. Shawne can tell you. He’ll have live events on Sunday and live events on Saturday, and we’ll be right there.

I am going to attest to that. For us, especially with Lights Out Sports TV, things are moving extremely fast. There are these new partnerships, new deals, and new opportunities. You’re right. We might have a live fight for Lights Out Xtreme Fighting on Saturday and turn right back around and have a live tailgating show that’s not only on Lights Out Sports TV but also syndicated out in 90 airports.

We are talking about a one-stop shop. For me personally, that probably is your biggest attribute in what you do. It’s not just the technology. It’s being able to come somewhere and you don’t have to leave the store. You can go over there and get some food. You can go somewhere and they can fix your car in the back. It’s like, “You can go over here and get sleep medicine. If you have a cold, no problem. You can go over here.” It’s one of these things that has been working with you guys, and it has been great.

It does feel like a one-stop shop where I feel confident and comfortable when I’m going to these meetings. I’m flying around the country, sitting down, and talking about the capabilities of OTTera, what you guys bring to the table, and what you guys have done so far. I feel confident that I go out and get this partnership done and there are going to be no problems. There are going to be no problems ingesting new content. There are going to be no problems getting things prepared and ready. No signals are going to be dropped. No transmission is going to be dropped.

It does feel like a one-stop shop. I’m going to be biased because I’m working with you, but seeing where this space is going, the sky’s the limit on what’s going to happen here in the next 12 to 24 months with not only our partnership together but with you guys as an industry where everything is going anyway.

I appreciate it. I like how you brought this up. Zack and I were having a conversation. I was telling him when I gave him the hat, “That hat doesn’t go to anybody. You have to really earn that hat. We don’t  give those things away.” It’s a part of our branding. It’s a part of who we are. A lot of times, you go to shows and they pass out the hats and the shirts, and then you see them in the trash.

How many times have you gone to a CES or an NAB and they give you these things but the way that they give it to you doesn’t have a value? For us, anybody that you see with one of these, you know that they are in some way, shape, or form working with OTTera. At the same time, if it’s someone who’s working with OTTera, there’s a 99% chance they love us to death because we do what it is that we set out to do for them.

One of the things that has made us very special to date and what we’ve built a relationship around, especially me and you, Shawne, and Zack, is the fact that OTTera is a bootstrap business. In that, there’s something special. For us to be in the same name as our competitors are in this space, we had to do that without the equal investment that those other companies have had to get into this space. Instead, we’ve had to constantly think ahead, “Where is this industry going? Let’s get there first.”

The other ones can catch up with the capital investment. If you have the ability to raise capital and you can raise a capital of $50 million at a time or $100 million at a time, you can afford to catch up from that standpoint. When you don’t have that access or when you’re operating based on what your revenues are doing, you really have to think way far ahead of the line.

We have a plan for where this industry is going for the next ten years. We’ve been following this plan consistently for the past few years. That’s the reason why we’ve been able to maintain the growth and the positioning that we have. By the time these companies or some of our customers like the LGs and the TCLs reach out to us to say, “Can you do this?” We can be like, “Yeah. We’re already set up for that. We’re doing that already. Do you guys want to do that? We’re set. Let’s go.” We continue to show and prove that we’re moving right where the top of this industry is moving but not with that capital yet.

To amplify what you’re saying, and people don’t know this because they’re not in the weeds in the space, but OTTera is the only bootstrapped builder of streaming platforms, streaming channels, and apps that have gotten this far. You have built this from the dirt. You’re doing quite well. You’re going to kill it, in my view.

I want to talk a little bit about the stuff you had to overcome to get here. When we’re talking about success and how you became successful, everybody goes for the shit. What are some of the toughest things that you’ve had to overcome as a bootstrap founder in this emerging industry that’s transitioning at lightning speed where people don’t even know what’s going on? You’re trying to teach them at the same time as you’re building your own company.

Overcoming Challenges: The Power Of Perseverance And A Strong Team

That’s an interesting question to unpack because of obvious reasons and less obvious reasons.

I want to jump in on this because I got a feel for what is going on. I had a personal thing. Before you answer, I wanted to see if you felt the same way. Even with me getting into this industry, I feel like I have to be ten times better than everybody else to get the same level of eyeballs, the same level of respect, and the same level of, “I know this shit too. I’m also good at this, too.” Is there any of that for you? I feel like I have a chip on my shoulder sometimes when you’re the smaller guy coming into the space.

For me and us in general, because myself and then all of my partners, none of us had a background in the media, the content delivery playout space, or anything like that. Some parts were easy because of the fact that we were very early into this space. It’s supply and demand. At the end of the day, if you have something that platforms need or really value, that opens the door for you.

When we stepped into this and were powering Toon Goggles in the early 2010s, at that point, it was the only free kid streaming service. That opened up a lot of doors for us. It gave us a lot of the relationships that are key for us. The things that have been more difficult, which there is less of now but still exist, are those who don’t know us or don’t know me and want to assume based upon either have not heard of me or have not understood what we have been through to get to this point how well-versed we are in this industry or in this space. At this point, they know the company, but they may not know the individuals running the company. That’s still somewhat of a hurdle that we have to jump over.

In this, a lot of times, getting the doors to open for you and getting some of the key executives to understand that we have a strong value to bring to the table, for us, we had a little bit less of that simply because of the way that we entered the space.  We entered this space with an IP that was very much in demand because there was nothing else like it. It’s not like this time when you have so many different children’s streaming services. Back when Toon Goggles was first released, it was the only one, so every streaming platform wanted that.

Being able to gain relationships and then leverage that into saying, “Since we’ve already developed for all the other platforms, let’s now introduce other streaming services and also bring FAST channels. We’ve already solved these problems for this service. Let’s also solve these problems across the board.” That made it a little bit easier to transition.

What are the stats on investments for Black entrepreneurs? It’s less than 2% of the industry. That’s the elephant in the room. There’s not that kind of support. To a certain extent, not having that is what made us as strong as we are. We’ve never depended on that. That’s not to say, “If we could be a company that can generate eight figures annually from the dirt, imagine what would happen if we had the capital infusion?”

I don’t know many that can generate revenues like that from dirt or from thought dust. Imagine if there’s capital that’s put behind that. What could that be? What will that be? As we enter into 2025, that’s going to be an interesting story to be able to tell about what the next level of this looks like because there are some strong plans that we have to put in place.

You hit on something that I want to touch on, which is when you are ignored. I feel the same way, doing what I do with A.R.I. and our investment fund that invests in early-stage companies. A lot of people didn’t know who I was or why I could make an impact in this space. Do you know how you get people’s attention like you guys have and I have? You develop something that’s so fucking valuable that they have to pay attention and then they all want in. Shawne and I have talked a lot about this offline. I will always take that call in the future from somebody who ignored me but it’s going to be a hell of a lot more expensive to do business with me. That’s the honest-to-God truth.

Zack, another thing, too, is educating people on the market on what venture debt is. There’s a long line of educational information that has to go into it that people didn’t know. It’s coming around. When we first met years ago, I didn’t know what it was. I didn’t see a whole lot out there. I didn’t see a whole lot of media. I didn’t see a whole lot of marketing.

All of a sudden, over the last couple of years, mainly from following you, I am seeing people open to, especially young entrepreneurs, getting into the business, not trying to give up their company. I see a lot of educational information going into it that wasn’t there several years ago. People didn’t talk about it because these other big VCs, other big firms, or whatever don’t want you to talk about venture debt because they want 40% of your company before you make any money.

For me, being a trailblazer in a market and creating something that wasn’t as important is becoming an important industry. I feel that our team is strong in everything we do. The sky is the limit from the OTTero side. It’s scary what you guys have already done with nothing. Zack, you know this because we sit on some of these calls and these meetings sometimes, and this was built. We didn’t have a ton of money put behind us.

When I started Lights Out, we had nothing. Between coming out of my own pocket and bringing money for sponsorship, that’s how we got built. It wasn’t some big VC coming to drop $5 million or $10 million on us and saying, “Go for it. Have at it.” It wasn’t that. You have another layer of skin when you build it from the dirt. Your mentality is different when you do it that way.

In a very crazy way, I’d rather it be like that because you are forced to maneuver. You are forced to watch everything that happens, every dollar and every cent that goes in and out. You’re very conscious of the people you bring in. You are only as big as your team. You are only as big as the people you bring in. You can have all these great ideas but you need somebody to execute it. You’re conscious of the people you bring on board. For me, it’s been a blessing in disguise.

Stephen, I don’t know if you feel that way, but for me, we’re at the point where we can start talking to other people for capital and everything else but I appreciate these couple of years we’ve had when we had to figure shit out. You had to figure shit out. It brings out a different dog in you that you didn’t know you had. A lot of people never develop it.

There are companies that tried to do this before you guys that got dumped $20 million and never made money. They were never profitable. They never got great at what they did because they knew they had $20 million to fall back on no matter what happened. I look at it as a blessing that no one did because I see some of these other companies doing what we did in this space with Lights Out Xtreme Fighting that’s folding because they raised a ton of money, got it, didn’t know what to do with it, blew it, and made the wrong decisions. Do you guys feel like, in a way, that there’s an advantage because you had to roll up your sleeves more than anybody else?

For sure. We’re in a position where we are good as individuals and as entrepreneurs. With our team, we have almost 60 people that work with us. We pay our bills. We’re good from that standpoint. Knowing that we have a product that generates money and knowing that we’ve been able to grow this company based on the revenues that are coming in for this company is a very rewarding feeling.

As we say in our hip-hop world, “Yesterday’s price is not today’s price.” What happens is you were slow to get in. You could have gotten in back in 2017. It’s okay. We’re here and we generate money. We’re a fixture in this space, but coming to the table, we have to have a more realistic conversation about what the valuation is going to be. We’re in a different position because it’s not a make or break for us.

I’m not going to call any names because I don’t want controversy, but we consistently see companies that we were once competing with that are having to drastically downsize their company or completely leave the space. Some have even shut down. The most recent was not long ago and the others were the last few months. While this happens, we continue to grow.

I can only attribute that to what our business model has been or what our philosophy is with how we go about entering the market, how we go about spending capital, how we go about hiring, and how we go about assessing who’s going to be a member of this team. All those kinds of decisions lead to the foundation that we have. That culture is a part of us. Since we have that culture, we need a little bit of capital on top of that to accelerate to the moon.

The Anaconda Analogy: Overcoming Challenges And Reaching The Top Of The Food Chain

When we have these conversations, I keep going back to this Netflix special I watched sometime during COVID. It was about the kings of the jungle or the animals in the jungle. They talked about the Anaconda. When the Anaconda is fully grown, it’s 30 feet and at the top of the food chain. It’s the ultimate predator. The problem for the Anaconda is something like 95% to 98% get eaten when they’re still little and developing.

I think about this all the time in the context of startups, growing businesses, and especially bootstrap companies like all of ours. We were once very small and could be eaten by almost anyone at that point. We keep getting stronger. Pretty soon, we will be fully grown. At that point, no one can stop us. That’s the pep talk I give to founders when they’re like, “This is really hard. How am I going to do this?” My advice to them is, “You got to push through. If you don’t get eaten and you keep pushing through and you get to that fully grown state, no one’s going to be able to fuck with you.” That’s where we’re all headed. It’s happening in real time.

Zack, do you have anything else? For us, I’m really excited about the partnership and the future of this industry. Zack and I were talking about the excitement of leaving one space, going into another, and having that passion to do this shit and love it. Where things are going for all of us, mainly the partnership with OTTera, and the capabilities of what’s going to happen over the next 12 to 24 months are going to be fun for us. I can’t wait for it.

I appreciate you guys, 100%.

Thanks for coming on, Stephen. It’s always good to see you. I love seeing your success with OTTera.

I appreciate it with pride.

I appreciate it.

Take care.

We’ll see you soon.

Important Links

• Zack Ellison on LinkedIn
• Zack Ellison on Instagram
• The 7 in 7 Show with Zack Ellison (podcast)
• Applied Real Intelligence (A.R.I.) website
• Shawne Merriman on LinkedIn
• Shawne Merriman on Instagram
• Lights Out Sports TV website
• Lights Out Xtreme Fighting website
• OTTera
• OTTera, Inc. on LinkedIn
• Stephen L. Hodge on LinkedIn

About Stephen Hodge

Stephen Hodge is the Co-Founder & CEO of OTTera, founded in 2017 and headquartered in Burbank, California. OTTera is a global leader in white-label streaming solutions. The company enables publishers, content creators, and broadcasters to launch and monetize their streaming platforms across devices, including mobile, connected TVs, and gaming consoles. Serving hundreds of over-the-top (OTT) applications and thousands of free ad-supported TV (FAST) channels, OTTera is a leader in the global transition to streaming content.

Stephen is a proven leader with a track record of success in mobile application technology development, content acquisition and creation, and white label platform streaming technology. With his technology background, Stephen previously spearheaded companies like Toon Goggles, Digital Media Interactive, and Anywhere Artists, before co-founding OTTera. Today, distribution of services managed by Stephen and his team reach over 70 million monthly unique viewers across every major consumer electronic device worldwide. Stephen leads OTTera’s strategies for content licensing, business development, monetization, while ensuring OTTera and its related companies stay ahead of their competition.