Content Play: The Value of Original Programming

Content remains the most valuable IP in the converging ecosystem of entertainment and technology.

Apple’s recent announcement to pursue original programming in film and television marks yet another tech giant’s attempt to conquer the world of content. This strategy has been in play since Google’s acquisition of YouTube in 2006, which effectively laid the foundation for platform-driven media distribution.

As the global digital infrastructure becomes more consolidated and competitive, technology companies increasingly invest in content to sell hardware and software services, as well as generate add-on revenue through direct-to-consumer subscription models. Case in point, the launch of Comcast’s Watchable and Verizon’s Go90 platforms.

As a result, the boundaries that have long separated Hollywood and Silicon Valley are gradually giving way to the force of convergence. The two industries, traditionally seen as siloed territories, have become integrated.

Technological progress facilitates the spreading of content while films, television shows, and online videos function as value assets for platforms. These substantial IP databases do not only cut through the massive noise of the Internet, they also differentiate the growing palette of online services and devices. In this environment, Content is King.

Original content serves as a strong asset in brand building and community management which are fundamental to long-term success in the crowded marketplace of convergence. Netflix and Amazon have built distinctive brands through their programming strategies, achieving popular success and industry recognition with Emmy-winning shows like Orange is the New Black (Netflix, 2013-present) and Transparent (Amazon, 2014-present). A focus on creative content production is an effective way to stimulate brand equity, but it also opens up more high-risk exposure in a fluctuating business, as seen in the case of Microsoft Studios.

Ultimately, these content plays put a spotlight on the work of creators and makers across the mediascape, counterbalancing disproportionate supply with rising demand. The business value of original programming propels the creative force of the industry as it expands into the growing verticals of convergence.

The creative community will be front and center as the industry enters its next stage.

Our reports on The Power of IP: New Developments in Advertising and The Online Video Shaking Value Chain look into how new content business models are disrupting the entertainment industry.

Written by Thomas Jorion and Matthias Stork