tmm1: Has anything changed since November?
1. HDCP on tvOS: No API, but workaround still possible.
2. Number of users interested in DRM support: 300
3. DTCP-IP License Costs: $20k/yr + up to $8mil liability
4. Projected break-even price: $15/mo
You’re basically saying you need $54k a year to break even. Given that 20k per year would be $5.56/mo for 300 users, or 37% of the $15/mo price, that leaves 63%, or $34,000/yr as unspecified additional costs. I’m presuming that’s liability insurance and your amortized R&D costs. A quick Google search, not sure how applicable, shows a $2 million general liability policy as costing as low as $500 per year, so even if it costs up to 30 times that, it would still leave R&D as your greatest expense, which is an upfront cost.
a) What governs the range of liability, between 1 million or 8 million? Is it the extent of the possible compromise? Or is the max liability yet to be determined?
b) Given R&D mostly being a fixed upfront cost, at some point, even with just 300 users, our $15/mo would have paid you back, so the monthly price should then drop to between $6 and $10, depending on the liability insurance cost, right?
c) If 600 people signed up for DRM rather than 300, then the initial monthly price should run around $7.50 a month, with a future drop to between $3 and $5? Likewise, if a thousand people signed up, initial price would be $4.50/mo, dropping to $2 or $3 a month?
d) Would you consider a launching Kickstarter for the R&D costs? See if you can cover the dev costs up front.
It seems your biggest issue is getting enough people interested. Also, obviously, having DRM support isn’t just for initial 300 people. It makes your app hugely more marketable, safe for a much larger audience, and removes the largest caveat hindering your users from evangelizing your product and service.
I’m increasingly passionate about DRM, because Cox Cable keeps adding DRM to additional channels on a monthly basis, and while I love Channels and subscribe to the DVR service, I’m not sure how much longer I can continue to use it. I also bought my mother an AppleTV and HDHomeRun Prime only to realize her cable provider (formerly Time Warner Cable) DRM’s everything. I can’t recommend Channels to anyone these days. Solving the DRM problem seems like the cost of doing business. You can’t play ball without a bat.
As an aside, it’d be awesome if you became more of a one-stop-shop. For instance, becoming an in-app reseller of blessed or preferred Silicon Dust and NAS hardware. And built more self-service/self-install onboarding/trouble shooting into the app for new users, even telling users onscreen how to connect things, who to call at their cable company, and what info to give them. Lower the barriers to entry.
