For Content Libraries, “As Good” Isn’t Good Enough
One the most painful things to realize as a product manager building an app for video content was that the content is more important than the features. Or, put differently, content is the primary feature. Good content can make up for bad features, but good features can’t make up for bad content.
Product people aren’t used to their innovation being secondary to anything, but once I swallowed that pill, the obvious next question was what is “good content”? The answer to that question varies depending on your goals, but in the startup world we are all shooting for the moon (billions of dollars in revenue). That means being disruptive. And disruptive means being 10X better than the alternatives to your content value proposition.
So, if I were to look at an app like BuzzFeed Video and say their content isn’t “good enough” (I’m not saying that, but if I were), I would mean their content value prop isn’t 10X better than the alternatives to that value prop. For example, maybe BuzzFeed Video’s snackable videos aren’t that much better than what you could get scrolling through Facebook.
If that were true, that wouldn’t mean that BuzzFeed has bad content. It would just mean their content isn’t good enough to win in the market.
State of the (Video) Union
When I think of OTT video, I think of a few buckets of content types:
Let’s look at each of these in turn.
You can get caught up in the weeds of exclusivity windows, and other contract nuances, but at the end of the day it can be boiled down to a simple question: who eats first?
In movies, Netflix and Amazon eat first. Hollywood already is slow feeding digital streaming rights to these aggregators. It would be very difficult to build a movie library that is 10X better than what Hollywood has allowed Netflix and Amazon to amass.
If your creative vision for an episodic series requires a movie-level production budget per episode, and complete artistic freedom in exploring sex and violence on screen, traditionally HBO was the only place to go. Now, Netflix is opening up there wallets and proving their competency at funding winners. Amazon and Hulu are also opening up their pocketbooks, but they are behind in their ability to pick winners.
So, those four eat first. It would be very difficult to create a value proposition around premium television that is 10X better. Even if you were some how able to give shows a bigger budget to attract the best creators to call you first, you would still have to be 10X better at picking the best concepts to fund.
Hulu clearly eats first here, based on their traditional studio backing. All the shows you would see on basic cable (ABC, Fox, NBC, etc.) come to Hulu first, and then many move out of that window to Netflix and Amazon later. The traditional studios have no reason to give someone else the same exclusivity window around streaming broadcast television (even if they end up selling Hulu). How, then, do you create a basic television value proposition that is 10X better? Nothing is impossible, but it would require a truly creative vision.
YouTube is clearly the giant of web video. The “path to glory” is tremendously strong on YouTube, and that attracts all the talent to put their content there first. You can literally go from Joe Shmo or Jane Doe making videos with their camera phone, to a millionaire. And now YouTube, with YouTube Red, is working to create even more value for their best homegrown talent.
It is very difficult to see how you would get more web talent and content than YouTube. And even more difficult to see how you could be 10X better at creating exclusive relationships with web talent than YouTube themselves, or every other company trying to poach YouTube and do the same thing.
Disruption with data, disruption with features, disruption with content: the underlying principles are the same. Switching costs are the basis for the “10X” rule of thumb, and also the reason why disruption requires focused, clear goals.
What is one content problem that you can solve for movies, premium television, standard television, or web content? Are you creating a huge new category of video content, like Snapchat (or only a small one, like Periscope)? Or can you create an aggregation of content types that is 10X better than the other aggregation plays in the market? Regardless, this much is true:
If you are building a content product, and you want to take billions of dollars of market share from the content incumbents, your content value proposition has to be significantly better. “As good” won’t be good enough.