Phil Hellmuth, accidentally or otherwise, let the cat out of the bag on Twitter earlier this month that the PokerGO app hasn’t been profitable for the company formerly known as Poker Central. After nearly four years in existence, there is at least one potential reason why the app still isn’t profitable: Direct competition with other streaming services.
The “Poker Brat” owns a partial stake in the poker app. How much he owns isn’t known publicly, and that is information he keeps to himself. Cary Katz, the founder of the College Loan Corporation, created Poker Central in 2015. Initially, the platform was intended to be one of the first ever 24/7 poker channels.
Phil Hellmuth stands up for PokerGO
Two years later, the network evolved into an app called PokerGO, and the 24/7 channel became a streaming app similar to Netflix and Hulu, except the content is exclusively poker-related. Over the years, PokerGO has launched numerous original programs such as the reboot of High Stakes Poker and Poker After Dark, and high roller tournament series including the U.S. Poker Open and PokerGO Cup. Katz even has a state-of-the-art studio to film high roller events outside the Aria on the Las Vegas Strip.
But after all these years, despite creating plenty of original programming and pumping millions of dollars into the product, the app is still losing money, at least if you trust Phil Hellmuth as a source (and why wouldn’t you?).
“I am disappointed that @PokerGo App is taking so much criticism! PG spent $20M bringing top notch poker content!! And lost a TON of money! Yes, I am an owner of the App, and presumably, PG will end up doing well, but the criticism hurts. When everyone else left poker, PG stayed!” Phil Hellmuth wrote in defense of the company he partially owns.
What’s going on?
Katz, a regular in the high roller tournaments on PokerGO, has an almost unlimited bankroll. He’s a multimillionaire who can afford to fund an expensive project such as a poker app. According to Hellmuth’s tweet, the company has pumped $20 million into its content. How much the app has lost isn’t clear, but the 15-time WSOP bracelet winner let his Twitter followers know that it is “a TON of money.”
One reason why PokerGO isn’t making money could be tough competition. Not competition within poker as there aren’t any other such apps. But against streaming platforms such as Netflix and Hulu, two major TV and movie apps that have millions of customers.
PokerGO costs $14.99 per month or $99.99 per year. That’s more expensive than Hulu ($11.99 per month without ads) and Netflix ($13.99 per month for the standard plan). Many poker fans on social media have complained about the PokerGO cost, questioning why poker-only content is priced higher than the most popular movie and TV streaming apps.
PokerGO has always kept its financials private, and no one outside the company knows exactly how many people subscribe to the app. But it’s safe to assume most of the subscribers are hardcore poker fans and not a casual audience. We say that given that recreational poker players are more likely to spend their money on streaming devices such as Netflix and Hulu than a poker-only app.
In a July 11 YouTube video, Doug Polk was highly critical of PokerGO’s stance on protecting its content. The poker media company refuses to permit anyone outside of PokerGO to share any PokerGO content on social media, a decision that might limit the number of people who consume PokerGO content. And, as Polk argued in the video on his new YouTube channel, perhaps the current business model isn’t the most profitable.
“The events they put on tend to be good, the quality is extremely high, and they’ve had some very fun moments,” Polk argued. “But at the same time they’ve made poker gated with a subscription, which I think is not the best model. I think a more ESPN-based model where you make money off ads makes more sense.”
When Poker Central first launched, the content was free, but ads were frequent. Katz and his company clearly decided that business model wasn’t working. But the app now features far more original programming (ad free) than back in 2015, so it’s possible PokerGO could now charge a higher premium for commercials, given that they now have far more viewers.
Hellmuth is convinced PokerGO “will end up doing well.” And for all we know, he’ll be proven right. But it’s been four years since the launch date, and the app still isn’t making money.
Featured image source: Twitter