Disney, Netflix and the new era of content
The announcement that Disney is to withdraw content from the Netflix platform from 2019 has surprised many, and marks the arrival of a new era in the content industry.
Netflix, will not have been caught completely by surprise: over time, it has been aware that content creators would want, as entry barriers diminish, to take control of their own distribution, and that the most likely to do so were precisely those who, like Disney, have an immense inventory of high-value content and a loyal public willing to pay to watch it over and again, along with the capacity to create new content.
Anticipating this likelihood, Netflix decided to become an immense content factory of its own, content that has won prizes and attracted many millions of people to their screens around the world. Netflix knows content production is the key to the future and is prepared not only to produce more, but also to acquire or reach agreements with those who know how to do it.
For Disney, the move makes sense: Mickey Mouse has grown tired of seeing the number of subscribers to Netflix grow continually around the world; what’s more, Netflix uses content selection algorithms to tell its customers what to watch. Disney has decided it doesn’t need Netflix, and that in the current environment of bandwidth availability — which will only improve with the arrival of 5G — can now mount its own platform. To do this, it has strengthened its presence in BAMTech, the interactive media company that worked primarily for the US baseball league, and has begun to organize its content catalog to create something offer that people will pay for. This a viable approach, and one that outlines a future many people will find uncomfortable or annoying, because it looks like a return to watching television on channels, albeit through the internet. If you want access to a wide range of content, you end up having to sign up to a certain number of subscriptions, rather than just having one or a few that allow you to manage the vast majority of content. An uncomfortable market fragmentation, annoying to the public, but one that allows companies to reach the market and to squeeze the most of out the data they generate and freeing them from having to share revenue with intermediaries.
The current technological panorama allows more and more content creators to consider becoming distributors. The infrastructure once needed to reach consumers seems to be much more feasible today, while former intermediaries, supply aggregators or cable TV companies could have problems if they cannot become owners of their own content .
Moves of this type are obviously not available to anyone. Nevertheless, the audiovisual content landscape is going to undergo radical change that will create new winners and losers. We are in a new era, one characterized by more bandwidth, closer proximity between producers and viewers, and more attempts to squeeze money out of viewers.
Many of us now pay for Netflix as well as a television platform, along with HBO or Amazon, which come bundled with other services as part of its premium offer. We will see how far, in the future, people are prepared to pay out to access content.
(En español, aquí)
