Collaborating to compete | STREAMED
STREAMED is a regular column covering the people, companies and ideas behind the new media economy, written by Corin Faife and published by Breaker.
To begin with an ending: this is the last edition in the STREAMED series. It’s been a brief but wide-ranging look into the world of Spotify, Netflix, Amazon and co., and while the five column installments have only scratched the surface, we’ve had enough time to touch on some of the big themes that define the industry now and — barring a huge disruption — will do so for some time to come.
The last year in particular was a pivotal time for video streaming. Netflix has long been the incumbent, a giant that was synonymous with the entire industry for a while; but as time passes that first-mover advantage becomes less and less relevant, and a growing number of rivals have moved in to try and take a piece of the pie. This is a year that has seen various long-discussed projects come to fruition, notably original streaming services from both Apple and Disney. With these two new additions plus existing competition from Hulu and Amazon Prime Video, we really are in a period of intense competition when it comes to video-on-demand, and the so-called “streaming wars” are only going to become more intense.
As we’ve already seen, the exact nature of the battles fought depends on each competitor’s strengths and weaknesses. Earlier in the series I discussed Apple, Amazon and Google’s ecosystem-driven strategy, where content is essentially a means of driving device or product adoption, keeping media consumers within a walled garden of apps and services. A few weeks later Disney flexed its media muscles, publishing a giant list of every movie and TV series that would be available in its back catalog once the new service launches. If nothing else, it was a reminder of just how extensive the Walt Disney Company’s network of subsidiaries is: the roster of content included not just Disney originals, but works from Pixar, Marvel, Fox Entertainment Group, and more.
In looking to get an edge in this competitive environment, another strategic trend is emerging from streaming platforms of all kinds: the partnership deal. Earlier this month, Verizon announced that it would offer all new and existing wireless unlimited customers a year of Disney+ for free — a great growth hacking move on Disney’s part, as the channel can now bootstrap the service with millions of early subscribers before it even launches.
In the same week Twitch, the video game streaming giant, also announced a new partnership feature: “Watch Parties” will let anyone with an Amazon Prime account watch a Prime video simultaneously with a Twitch streamer, presumably to allow for Mystery Science Theater 3000-style riffing over the original content. Of course, Amazon is already hugely successful in the video streaming market — currently it ranks second in the US behind Netflix — but Twitch watch-alongs could give a younger demographic reason to sign up. And for Twitch, offering this kind of TV and movie livestreaming is a chance to expand beyond the core concern of video gaming, and makes sense as a way to diversify audience in future.
Just last week, Spotify also started promoting a deal with Google whereby subscribers at the premium level of the music streaming service receive a Google Home Mini smart speaker for free. Besides paying for Spotify Premium, the one other qualifying condition is that users must link their Spotify accounts with their Google accounts — presumably the value of the additional customer insight that comes from joining these two data sources is worth waiving the $49 retail cost of the speaker. (“If you’re not paying for the product, you are the product,” as the saying goes.)
Beneath the headline-grabbing deals, what does it all mean for the future of streaming? With giant companies like Disney and Amazon now in the field, it’s quite possible that their competitors will attempt more acquisitions of smaller players in the market, as legacy entertainment companies try to compete by bringing onboard new audiences — not to mention new tech and marketing talent.
More generally, as newer entertainment companies take risks on content, for independent artists in film and TV there’s a big opportunity to get new shows made. It’s easier to shoot, edit and distribute high quality video than ever before, and self-publishing can provide a route into bona fide stardom, especially for actors and shows that might otherwise have been overlooked: see, for example, Issa Rae’s start with her web series Awkward Black Girl, or Broad City’s similar journey from YouTube to Comedy Central. At the same time, the business metrics used by streaming companies mean that shows which are commissioned or renewed are those that perform well according to a sometimes opaque set of criteria, and some fan favorites end up getting the ax in the middle of a creative peak. Thankfully there’s a trend towards more transparency in how platforms like Netflix measure and classify viewing habits, which can only be a good thing for creators and viewers alike.
In the music industry, streaming now makes up 80 percent of revenue, and has led to years of growing income after a steep drop in the early 2000s. But there’s still concern over where this revenue actually goes: although major global artists can net huge sums through streaming plays alone, smaller acts struggle with the fractions of a cent typically paid out per stream, leading to questions about the viability of the new model for artists themselves. Here again is the same tension we find in video streaming: services that offer a great deal to consumers at the level of price and convenience don’t necessarily provide a fair deal to artists — and indeed, can make it harder as an audience to support the artists whose work we enjoy, since the route from a customer’s monthly subscription payment to an artist’s paycheck passes through so many intermediaries.
Taking an example from the news industry, we had to first hit a peak of free content (the web publication explosion in the aughts) to arrive at the present day, where news consumers are starting to recognize that donations and subscriptions to nonprofit news organizations constitute an investment in the overall health of the media ecosystem. The success of smaller artists in the new streaming economy could depend on a similar ability to build direct connections with audiences and cut out intermediation from larger platforms; thankfully due to social media and fundraising options like Kickstarter, Patreon, Substack etc., this looks like an achievable goal.
We’re living in a golden age of entertainment, and the challenge now is to ensure that its profits are distributed directly and equitably. I hope we’re headed in that direction — and to keep on track, the best we can do is keep paying attention to what’s happening behind the streams.
STREAMED was brought to you by Breaker, SingularDTV’s artist-driven blockchain-powered entertainment dapp. Built with the creator in mind, Breaker empowers artists with a blockchain rights management system and peer-to-peer distribution platform. Audiences from all over the world can find bold independent content on Breaker, including the company’s own original productions. Download the dapp and learn more at www.breaker.io.
