The Content Clock

In between working, raising a family, working out, or any of the myriad things that fill everyone’s day there is only so much time that anyone has. Importantly, this defines the types of content that can be consumed and when. When we think about content from this “time-share” perspective, different competitive opportunities — and pitfalls — emerge.

Different content providers have each taken their own share of time on what we call “The Content Clock” — and have been successful in so far as they’ve been able to monetize their respective slice(s) of time. This is especially true when we consider longform video content.

But first, let’s consider the content clock:

Here it is for the (12AM-12PM) side of the clock as well:

This clock is really focused on one’s weekday experience, but serves as a useful framework for thinking about the different types of content (audio, written, visual, etc.) that we consume and when. Using the content clock framework, we can think of the competitive nature of content providers from a “timeshare” perspective rather than the traditional market share framework that is used today.

More importantly, the clock shows us that there is a defined structure to the ways in which content can be distributed, and what types are most suitable at certain times. In the morning, there is a preference for the written word and audio for those who are commuting; while during the day only short bits of content can be consumed in between work meetings — the domain of social media. This means that the opportunity for individuals to consume, say, longform video content is limited to when they get home after work, and this is the *only* slot one can really do that on a regular weekday basis.

Longform Video

It is this scarcity of time for longform video consumption that makes the competitive dynamics of Netflix, Hulu, and Disney so interesting.

When we compare the “old” world’s timeshare vs. the “new” world’s, we roughly get something like this:

As a result, there are a couple of dynamics that are worth noting:

• The first is that the best slot to have was in that 7–8PM window, or “prime time” as it’s known in the “old-world”. This meant that television networks — which were only a handful of players — had power over content providers; a show would never succeed if it was not on one of the major networks. In turn, these major networks fought to air select shows during the primetime windows to ensure the largest viewership to which they could distribute TV advertising.
• The second is that the best prime time opportunity wasn’t actually any of these shows, but live sports. Few things could guarantee more attention, and by extension more advertising revenue, than having a one-time, live piece of content that would aggregate a substantial viewership. Companies would spend whole ad budgets just to get time here, similar to the Super Bowl dynamic (but on a weekday instead of a weekend).
• The third, and most important, is that Netflix has now dominated this time-share window; and has transitioned content from being a battle of who owns prime time slots to being time-agnostic. Netflix has sucked up not only prime time, but all the time that one would watch longform content, with certain exceptions. Ironically, one-time use content is no longer as attractive as it once was — evergreen content that can gain subscribers is the more attractive piece of content. While anecdotal, one can consider the fact that the average cost for a 30-second Super Bowl advertisement has fallen for the first time since 2006.

More specifically, Netflix has changed the dynamics of longform video by monopolozing all possible longform content time. In the old world, competitors could only own a 30 minute — 1 hour slot with a single show, and then users would switch away to the next best channel, driving attention and ad revenue elsewhere. Channel providers would show their best show at the best time that they could afford to in order to drive revenue. Contrast that to Netflix and other streaming services who can deliver content on-demand almost endlessly. Now that entire libraries of content are available on-demand and not programmatically, Netflix can aggregate attention away from traditional content providers.

Further still, through their pioneering practice of offering whole seasons at once Netflix can extend their content extensively. Once you finished LOST on Fox you would go and watch The Sopranos on HBO, but if you could watch the entire show of LOST why not binge on Netflix’s digital property for longer? In fact, why not spend all of the available time you have to watch video, continuing to watch the video you want?

This gets at the crux of Netflix’s strategic move to launch whole season releases at once, starting with House of Cards, facilitating the binge epidemic that we are all so familiar (and guilty of) today.

House of Cards being released all at once means that I do not gather just for a single hour like Game of Thrones, but instead my entire night has been subsumed by the offerings of a single platform.

In many respects this has purely been a competitive play — spacing out live content week to week is the best way to ensure that you get a maximum audience at the same moment in time a la HBO, but by giving everything at once you instead ensure that no one user is switching away to another channel or content provider. This kind of lock-in goes beyond what channel providers are even able to do; they are forced to compete on what they can offer in their respective live window; and this means that their distribution model has to change; and by extension, their business model. This is textbook disruption.

Admittedly, some live sports and premium shows such as Game of Thrones are exceptions to this rule, as their sequential natures make their weekly-release-at-a-certain-time a relevant feature; but this type of content only has a limited value; in the moment, as opposed to a dynamic library that has exactly what every single individual wants.

Where to from here?

Netflix has monopolized the night-based, and increasingly travel-based viewing supply, with only a handful of competitors. Indeed, would-be competitors need to find another section on the content clock to compete. The transition from the old-world to the new has mandated business model changes, and propose interesting questions about where potential players could play, and where the differentiation point will be in the future:

• Live video-game streaming has taken on a life of its own, even outstripping sports in many contexts. Cementing this dominance is no small task, as there is a cultural-hand-down of live sports from generation to generation. The NFL serves as an example here — many millennials and Gen Z individuals did not watch football growing up with their families, and as such their affinity for the game is on decline. Relatedly too, the viewership of the NFL has been declining consistently as well. For Live video-game streaming to go beyond a generational fad, Amazon will need to think about Twitch on a multi-generational level.
• From my perspective, when people are looking to waste time in between work, or while in the louvre; they can watch some quick portrait mode content; but that domain is dominated by social media. Jeffrey Katzenberg is trying to enter this space with premium mobile-first content and a star-studded Hollywood backing, and Snapchat has made inroads here as well. While this venture is exciting — I’m not sure how much engagement they can hope to have with such a short amount of time.
• The success of Bandersnatch, Roma, and Bird Box demonstrate the true scope of what Netflix has accomplished; Roma highlighted Netflix’s ability to deliver high-brow, high-quality films that are too risky for theater distribution. Bird Box highlights Netflix’s ability to deliver mass produced, “average” content, and Bandersnatch highlights Netflix’s ability to deliver new modalities — engaging interactive content that will change what we come to expect from media and television

Given these three dynamics, I am curious to see what future challengers will propose, and where on the clock they will compete.