Israeli video technology company Eko, founded by CEO Yoni Bloch, is currently closing a deal with US retail giant Walmart. In the collaboration between the two companies, Walmart will set up a video and content platform based on Eko's technology designed to compete with Amazon's platform, sources close to the deal inform "Globes."
Eko, formerly Interlude, has developed interactive video technology that enables viewers to choose how a story plot will continue. Over the years, its business model has been based on cooperation with creative artists, studios, and media companies. Sources close to Eko told "Globes" that this model made it difficult for Eko to make a profit, with the company remaining on unsure footing despite the success of its content. The deal with Walmart, the first cooperation of this kind for Eko, is likely to prove a significant business milestone for the company, although the volume of revenue that it will generate is not clear.
Bloch and his partners, chief product officer Tal Zubalsky and Barak Feldman, founded the company in 2009. The three founders, all of whom are musicians by trade, started with the idea of an interactive clip designed to encourage the audience to view it a number of times. The assumption was that as soon as a certain song is heard a number of times in a row, it has a better chance to succeed. At that time, the company worked mainly with artists, winning "Time Magazine's" clip of the year for its clip to Bob Dylan's legendary song, "Like a Rolling Stone." Despite the recognition that this brought, Eko's work with artists is regarded an unprofitable.
In 2014, Interlude launched a platform for creating an interactive video platform under the name Eko, and later registered in the US under this name, leaving only its development center in Israel under the management of CTO Yuval Hofshy. The transition to working in New York and Los Angeles is linked to the change in business strategy by the company, which switched to an emphasis on producing content for studios. Among other things, Eko produced an interactive version of "Twilight Zone" with CBS and participated in the creation of a full-length movie with MGM, which also invested in the company. Sony invested $40 million in Eko in 2016 at a company value of $175 million (according to IVC's figures). Eko raised a total of $77 million from a series of prominent investors.
The current deal with Walmart shows Eko's ability to again be flexible and find new ways to expand and grow in its business. What is it about Bloch's startup that interests Walmart? The answer lies in the enormous power of its great rivalry with Amazon. Walmart still trails behind Jeff Bezos's company in technology but has been trying to catch up in recent years. It is frantically searching for new technological tools in retail spheres and it now appears that it wants to expand to video, where Amazon has been operating for years.
Amazon's streaming service offers a broad range of content, including original series, and estimates are that it is planning to spend $5 billion on content creation this year. Its service has been active in Israel since 2016.
Published by Globes [online], Israel business news - www.globes-online.com - on June 10, 2018
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