Amid the noise of fight week (Jake Paul vs. Ben Askren is tomorrow night), TrillerNet—the parent company of the short video platform, Triller—announced the acquisition of FITE, a sports and entertainment focused direct-to-consumer digital distribution platform. The deal is expected to expand Triller’s visibility for tentpole events (FITE comes with over 4 million registered users worldwide) and provide the TikTok competitor with the back-end technology needed to deliver live digital PPVs at scale, which “is clearly what we see as the future,” new CEO Mahi de Silva said. (TrillerNet also acquired de Silva’s Amplify.ai earlier this week.) Terms of the deal were not disclosed. However, it is believed Triller spent $250 million on acquisitions over the last couple of months (including Verzuz, Halogen and Mashtraxx).
Our Take: The relationship between Triller and FITE dates back to November 2020. FITE was Triller’s exclusive digital distribution partner (think: phone, laptop, smart TV apps) for the event headlined by Mike Tyson and Roy Jones Jr. The success of that pay-per-view led to the two sides discussing a merger. Prior to that night, Triller had never seriously considered PPV (nor long-form content) as a revenue stream. “We were blown away with the scale of what we achieved in November,” de Silva said. “It definitely gave us the confidence that this is something we could recreate.” It has been reported the Tyson-Jones event did 1.6 million PPV buys, the majority of which were said to be digital.
Triller and FITE could have continued to work with each other at arm’s length. “The economics were good for them and good for us,” de Silva said. But the Tyson-Jones PPV gave Triller “a glimpse into [the FITE] platform and their ability to handle massive scale,” which they found to be “really impressive.” Not only did FITE have the technology to take the live stream and make it work without issue on a variety of different devices, they had a stack capable of handling a multitude of payment instruments and terms—important with the price point for a Triller Fight Club event set at $49.99. “This is the kind of machinery you need to attract that broader audience and to get them to come back for two, three, four, five events a year,” de Silva said. The acquisition of FITE means all of that technology will now be incorporated into Triller platforms (think: app, website, Triller TV) making the company “more formidable as a purveyor of content and pay-per-view events,” he added.
Triller hopes to eventually turn their event-driven relationships with viewers into subscriptions (the FITE platform supports both PPV and subscription models). De Silva indicated Triller views subscriptions “as an important aspect for fans that are interested in sport or other genres of content.” While in theory Triller could have introduced a subscription service without the FITE acquisition, FITE has an established subscription video-on-demand service with a “pretty large audience. So, they’ve kind of carved out that path [for us],” de Silva said.
One genre Triller is almost certain to explore further is music. Just last month the company acquired Verzuz (a webcast series of rap battles). “Verzuz has been sponsor-driven [from a revenue standpoint]. But now we see opportunities to take what FITE brings to the table [in terms of technology] and create premium Verzuz experiences [for a global audience],” de Silva said.
In addition to the technology platform, FITE comes to with a valuable existing consumer base Triller can tap into. “We do a good job of creating awareness [within] our app and [among] our audience. But what FITE excels at is [capturing] the traditional fight related sports fan [particularly those abroad],” de Silva said. The data-driven streaming company creates interest in events and drive audiences to purchase “using a big mix of [marketing] channels. From the traditional paid channels, to a number of internal ones” (think: email, push notifications, video pre-roll), according to FITE CEO Kosta Jordanov. “We’ve built an engine that if you look at the customer acquisition costs over the years, 2016 to now, [they] have decreased very sharply and very consistently quarter over quarter,” he added.
November’s PPV also demonstrated the effectiveness of FITE’s affiliate network (more than 1,200 strong), and de Silva said the evidence “showed up in spades in the numbers.” Of course, selling more PPVs means there is more money for content.
FITE, de Silva says, is seen as “a perfect complement” from both an audience and existing content perspective. The company carries a couple of events per week around the globe, programming that will beef up a long-form content portfolio light beyond Triller Fight Club events.
FITE’s positive cash flow certainly didn’t dampen Triller’s interest in a purchase. “If you think about the tech and M&A space, there are a lot of people spending lots of money in hopes of doing something in the future,” de Silva noted. “So, the fact that it’s an accretive transaction is just amazing.”