Professionally produced media is undergoing dramatic changes driven by recent major business development deals. Some examples:
However, in the rush to disrupt the existing models, people are forgetting the lesson learned in the music industry; aggregation of content provides the best experience for users and the biggest profit opportunity for the owners. Simply said: aggregation wins.
One of the biggest problems with professionally produced video today is that it reveals too starkly the seams between the different organizations involved. Viewers do not care one iota about the subtleties involved in what, when, where, and how a movie is released, they just want to watch content on their schedule on their device of choice. And, worse than that, they certainly do not want to wander the Web, searching site after site with completely different user experiences, billing models, and content catalogs to find what they’re looking for. Anything superfluous that gets between the users and the content makes it that much more likely that they will abandon looking altogether.
There is a strong parallel to the music industry of the late 1990s and early 2000s. As the industry struggled to make the transition to digital distribution, each label tried a model that fit their artists, but left everyone else out in the cold. Then, in 2003, the iTunes store rescued everyone. With a single product launch, users now had one place to go, behind a single user interface, and a single billing method, and all was right with the world. But the real genius here was because the catalog was nearly complete (despite hold outs like the Beatles & AC/DC), it simplified things enormously. If the
big four labels had each launched their own iTunes, it would have been a disaster. By providing a single place to find, listen, and buy nearly ANY content, Apple increased the size of the pie for everyone.
This powerful form of aggregation extends to other media types as well. When someone wants user generated content, they do not have to think for a nanosecond before they type in Youtube. Ditto for Flickr and pictures. Or Scribd and documents. Or Wikipedia for knowledge. Users adopt aggregators very quickly when they understand that it simplifies their lives – if users say “when I want X, I go to Y” then it makes everyone’s lives easier.
We’ve seen this aggregation strategy work in our favor at Entertonement. By providing an extremely simple way to upload, find, and share all the content on the site, users quickly understood that if they wanted audio, they knew where to go. Even better, we’ve been lucky enough to work with partners who got it too. There are huge libraries of phenomenal content out there and the owners have read all the success stories of those who embrace this model, rather than avoid it. As they brought their hundreds of thousands of hours of sounds into our platform, we’ve seen everyone’s experience get better and better.
So, who is going to win for professionally produced video content streaming? The winner will be the company that is able to bridge all the gaps for the users and make available the broadest possible catalog. My bet is on Netflix. They have a profitable business model that does not require being supported (or beholden to) the content creators. They’re aggressive enough to go around anyone necessary to get at the real value–the content–and can write huge checks to make it happen. And, finally, every additional customer who streams a piece of content from them is a huge cost savings, which makes it extremely motivating to move every single customer online. Combined with the fact that, unlike Hulu, they don’t ever have to worry about the ups and downs of the advertising market, Netflix has the inside track to victory.