I should call this a round up of the last two weeks. Even though I got my column out on time last week, I had a lot of spill over ideas. So many stories that they bled into this week’s edition. (Which is late again.) Business-wise, the entertainment press had two stories dominate the news in the week of December 7th, one which matters and one which doesn’t. But first, our holdover article, with a key lesson.
The Most Important Story of the Week – Youtube Kills Original Programming
Or did they?
That’s a deliberately provocative headline not quite captured by, you know, the truth. But clicks, am I right?
In reality, Youtube is quietly pulling back from original programming. Or shifting their strategy to premiere originals on their ad-supported platform (just Youtube) instead of their subscription service. Along with this move will come a likely decrease in their overall spend and spend per show.
I don’t want to go overboard here. Like saying something like, “See all original programming is bad.” That sounds just silly on its face. Obviously, HBO was built by original programming. Actually, every broadcast channel was built by original programming. AMC and USA Network took leaps in popularity by leveraging original programming people liked. Netflix captured a lot of new subscribers with House of Cards.
But I do want to push back on what I see as the implicit assumption that “original programming = success”. Just making your own shows doesn’t give you a competitive advantage per se. It isn’t a panacea to all the problems ailing your business. This is another example of executives not being creative, but simply asking, “Well, what are they doing?”
That’s why I think economically-minded companies, like Youtube presumably, may pull back on original programming if it doesn’t work right away. Maybe they do have a flashy hit–like Cobra Kai–but the costs for that and the 10 to 12 other series may not cover their bills. In that case, you pivot away from original content. I’ve been bullish on Youtube for awhile, and I think the more they focus on Youtube and YoutubeTV, the better and more coherent their offering.
If you read Stratechery, you’ve seen Ben Thompson has his “aggregator theory” that I love. My only quibble is I’ve never understood why he applies this to Netflix as opposed to Youtube. (He actually does both.) Netflix is specifically not trying to aggregate it all, but Youtube is. If you have it all, you don’t need “just a little bit more”. You’ll get it eventually. And that shows why Youtube probably doesn’t need original programming.
Long Read of the Week – Youtube and The Pressure to Publish
While I’m on the Youtube train, I want to call out this article on Variety by Todd Spangler that has been sitting in my “to read” list for a while. I don’t have a ton of insight except that Youtube has problems that seem unique to it in the video world. Netflix is going to compete very traditionally with the big studio players by making big shows and streaming them. It’s just a different channel.
Youtube has to deal with, basically, it’s algorithm. The algorithm pushes people to extreme content. Or it burns out creators. Or it caters to children. Or it is addictive. It’s a fundamentally different problem that is both easier (fixing algorithms is easier than dealing with people) and harder (it cuts directly into revenue) to solve.
Other Contenders for Most Important Story – Technical Difficulties in PPV/Tiger and Phil Match
For those who don’t know, AT&T announced a giant pay per view golf match between Tiger Woods and Phil Mickelson. Since AT&T now owns Bleacher Report, they had the genius idea to have an option to purchase the event on BR too. Of course, the BR website crashed, so they offered it for free to customers, which bugged anyone who paid for it. So refunds were issued.
These refunds won’t bankrupt AT&T, and it looks like they’ll plow ahead with future PPVs in golf. Also, I don’t think this story portend some huge change for how we consume video content. So why was it almost the most important story of the week?
Because it provides such a great lesson on the relationship between “content” and “product”.
The lesson is one I’ve hit on a handful of times but will really emphasize going forward: product matters. Yes, content is king, but your product is right there. If the process to watch content is maddeningly difficult, then customer will find other ways or not watch. Content is king, but product may be the Queen. Or at least a rook.
Other Contender – Netflix keeps friends for $80 or $100 million, non-exclusively