Over the last 10 years, I have seen our relationship with media and with TV in particular changing at a truly astonishing pace. In 2008 Netflix streaming and Hulu had just been launched but we were still dealing with DVDs and TIVOs and we had no idea what OTT even was (it means over-the-top, as related to the way content is conveyed without a set-top box). I, for that matter, was still living in Italy and returning late my Blockbuster DVDs. Basically, another era.
Today we are in the era of what broadcasters call “time shifting” – with viewers watching what they want, when they want. It started in the 80s with the VCRs, continued with DVRs, and really took off when streaming technology allowed consumers to watch content over the internet without retaining it in their computer. Cord cutting, as the trend of leaving linear and cable TV in favor of streaming and OTT subscriptions, has increased. These simple changes in consumer behavior have changed everything else: from how much content is produced to how it’s delivered, marketed, and planned by all the major media/technology companies.
As consumers changed, media companies changed too: tapping into debt to finance $8 billion (yes, with the b) of new content like Netflix is doing in 2018 (see this very interesting list of how much media and tech companies are spending on content this year) is still a risky move but doesn’t seem that crazy if you have 125 million subscribers in the era of super fast absorption of new content. For companies like Netflix or even for any linear TV broadcaster, you’re relevant only as much as your latest product (aka your latest original). Therefore, content literally is everything.
We have progressively become able to consume content faster too. Binge watching behavior is widespread (as the habit of watching 3 or more episode of a show back to back), and while certain companies are moving back to weekly content releasing (as I wrote on this blog a year ago), others are aggressively targeting the highest level of creativity, luring it with artistic freedom and big paychecks in order to produce content that is as innovative as movies – if not even more.
People not only consume fast, but they forget even faster. Getting viewers “hooked” takes more and more effort in an era of zero loyalty. Viewers want quality, no ads, compelling UX, and easy access. And – why not – the option to download content too. Marketing is truly the largest cost center of these companies, next or second to production, especially if they are targeting an international expansion where different markets, cultural divides and complicated local regulations already pose a significant obstacle.
What does the future hold for the TV industry, and consequentially for us? More content for sure. Even better quality of shows? Maybe. Less ads? Probably (Hulu spearheaded this movement). Technology improvements? You bet, especially with the 5G, the developments of content caching processes and the proliferation of CDNs (Content Delivery Networks).
But is it all this going to bring loyalty back into this maze? Not so sure. Viewers watch content faster than companies can produce. It takes a truly well constructed magic mix of partnerships with device companies and MVPDs, quality content, appealing design and convenient pricing to keep a viewer really “hooked”. And even once a company has this magic equation figured out, as Netflix recently discovered, maintaining the machine properly oiled is a whole another story.