Online video startup Chill has laid off a large part of its staff as it looks to move away from the entertainment industry.
Chill Chief Executive Brian Norgard said that the company has laid off its entire entertainment team and some engineers, cutting down to nine employees. He did specify how many lost their jobs, but the Wrap reported there were 17 employees before the layoffs.
The L.A. company had been an online distributor of videos from independent filmmakers. Customers could pay a small fee, typically under $10, to watch a comedy special or documentary film. The site currently offers a Maria Bamford comedy special for $4.99 and a free look at a documentary about crowdfunding.
But Norgard said the company's a la carte model faced some challenges.
"We discovered that the sales/acquisition cycles around premium content to be somewhat inconsistent with our self-serve distribution model," he wrote in an email.
Furthermore, he said it was difficult to get consumers to pay for individual video when services such as Netflix offer unlimited video consumption.
"Convincing people to transact around a la carte premium content still isn't nearly as straightforward as one would assume," he said. "There's a reason why Netflix is so highly valued on the public markets. Easy access to premium content is still very, very hard to do."
Norgard said he's not sure what’s next for the startup, but that the remaining team is working on developing new ideas.
Chill has undergone a few iterations over the years. The site originally evolved out of Norgard's previous startup, Namesake, a social network around conversations.
At first, Chill was social video platform where people post popular videos from the web for others to see and comment on. The company later struck deals with comedians and filmmakers to become a distribution platform for independent projects.
At one time, Chill's distribution model appeared to be a hit. The company raised an $8 million round led by Kleiner Perkins Caufield & Byers and talent agency William Morris Endeavor in June last year and signed a premium content distribution deal with gossip network TMZ.