All roads lead to content

Content is getting bigger, wider and pricier. 

With 85% of US millennials subscribing to at least one streaming platform (data available here), it is without a question the era of content. However, it is also the era of data more than before, as many companies are now working the dynamics of in house analytics (see the AT&T acquisition of AppNexus announced just last week) and the rise of companies like iSpot.tv or Brightline, that track ad performance on a responsive and dynamic basis which allows, in the case of Brightline, to adapt ads to the customers’ preferences. So what about content then?

Content is going local. There’s a scene in one of my favorite movies of all time, Up in the air, in which a very self-assured, type A young professional played by Anna Kendrick explains to an audience of much older executives, one of them played by George Clooney, what “glocal” means: “Our global must become local” (and shout out to Clooney’s mispronouncing of the word, glocaaal, that is hysterical).

As much as it sounds like marketing jargon, we are in fact in the era of glocal, and digital content is the perfect example (it’s not even a new concept, as apparently Japanese invented it in the 60s).

The trends and the data reveal that even hugely integrated and globalized audiences still covet content that resonates with their local realities and their daily life problems. The latest Nielsen “Local Watch”report, related to Q4 2017, shows that 91% of streaming device owners access local media either on TV or online (full Nielsen report downloadable here). While these numbers relate to the US only, there’s a strong possibility that international viewers feel equally interested in their local environment, if not even more. In order to satisfy this demand, Netflix – as the only company that is actually able to tap into different countries’ content needs on a global scale – has kicked off the production of 10 original international series in 2018 (as detailed here) and it’s launching its first originals in India this year to tap into one of the largest markets, and to compensate for not having China.

Content is king also because it means literally every genre and duration: from 1 hour drama to 30 minute comedy, news, reality shows, talk shows – historically at a record high for audience in this political climate – documentaries (another genre that has been hugely successful lately thanks to Netflix and HBO that brought the quality of this genre to a new high), and of course movies. There are many streaming services catering to only one specific genre: whether is anime (Crunchyroll), or documentaries and indie movies (Sundance Now or Mubi), or even romance movies only, like Passionflix. The fact that they are able not only to survive but thrive – Crunchyroll has 35 million users for its free platform version, Passionflix is 9 months old and already operating in the US with both originals and licensed content and in other countries with its originals only – means that where there’s a content genre, there’s a business, even if it’s niche.

Great content doesn’t have to cost an arm and a leg. A few weeks ago I was attending the TV of Tomorrow (TVOT) show in SF and in a panel about content someone mentioned the best content they ever produced cost the company only $700. That might be an extreme case, but it is true that big budgets do not guarantee necessarily big audience numbers, as it happened for the latest Star Wars installment (took $275 MM to make and made only $210 MM at the box office in the US). Nowadays using up to a million dollar is considered “cheap” content production: that’s the case of HBO’s Room 104, shot in a hotel room and probably for the lowest budget for a TV show of the last 5 years, or FX’s Atlanta, with a budget per episode around $1.5 million.

What does success mean in terms of content?  How do you really value content? How do you really know it’s a success or a failure? Viewers numbers, buzzword, or all of that?  Amazon labeled Transparent as a ‘huge success’ with less than a million viewers per episode but Netflix doesn’t release its numbers so we will never know how many people really watched Stranger Things. At the same time HBO cancelled Here and now because it averaged only 300-400k live + same day viewers.

Atlanta is probably the best TV show of the last 20 years and generated buzz and discussions, still enjoys a 98% Rotten Tomatoes score and was a spark of originality in an empty and remarkably conformist linear TV scene, but its season 2 averaged just a bit over 500k viewers per episode.  After it ended, it was even uncertain if FX was going to renew the show for another season (luckily for us, they did).

And even if the viewers numbers are there – see Roseanne’s revival – renewals of a show are not guaranteed. We live in a highly interconnected world where social media and internet buzz are all part of the bargaining power (or “social luggage”) of a show or its creator, but they can’t ensure its longevity, nor even its survival.

What’s the universal definition of content success, if there’s one? It appears nowadays to be a mix of audience numbers, internet buzz and critical acclaim. Often times the first two are enough for some media companies, and equally often the last two have been opposite concepts. However I’ve come to found that lately many shows had all 3 elements and they have in fact been considered a success. Take this chart from The Economist that was published just a couple of weeks ago: it displays a rating for Netflix’s most famous series of the past 6 years and there’s a clear correlation between the length of time they’ve been on air and content success, as well as critical acclaim and viewership.

Content is king because it stands on its own. Some time ago I was in a discussion on LinkedIn about OTT and the power of digital media and someone said “content stands on its own”. Whether you interpret this as “I judge content regardless of the network/channel it airs on” or “content is more important than the mean it’s conveyed through” or whatever else, it is a very relevant statement. We subscribe to certain platforms or channels because we liked that one show, or even just that single episode of that show. How much the content resonates with the daily life of viewers is the main reason why we like that content.

To sum it up, building a brand around quality content doesn’t seem enough anymore, as HBO is discovering following the Time Warner acquisition by AT&T (and as the NYTimes highlighted in this great piece). Numbers have always mattered just as much, which is why every company is increasing its efforts to gather more data and information about consumers patterns. Walking that fine line between content quality and numbers is the real challenge: in order to do so, companies are increasing their content budgets to tap into every genre, geography, narrative and creative talent pool, multiplying the output – and creating more burden on marketing to generate that internet buzz , as every new show needs to be supported by a cohesive marketing strategy. This has already produced a choice paradox for Netflix, as every new show gets lost in an ocean of new productions, but it might reveal to be the right pattern for all the other players in the field.