Commentary

Content Remains King

If the recent gyrations of Netflix and Hulu demonstrate anything, it is that content still rules.  We can talk about the new forms of services, devices and formats, but at the end of the day content dictates the business. 

Hulu’s rapid growth was primarily the result of its access to content from its owners who were major broadcasters.  It was an attractive acquisition target for some because of these content rights.  It posed inherent risks to its potential acquirers because of the content rights.  Finally, it was taken off the block by its owners in no small part because of where their content could end up. 

Simply stated, Hulu's attractiveness to consumers and potential acquirers is and has been the availability of content.  The somewhat tenuous relationship between Hulu and its broadcast owners is largely because of the uncertainty of where the premium content business is going because of online forces and the balancing act everyone is trying to do.  On the one hand, those with large established revenue streams and business relationships are continuing to band together despite undercurrents of change, and on the other, they are all looking to secure their future in a time of uncertainty, lots of unknowns, large potential disruptions and undoubtedly a few black swans before the tally is taken.  This goes for pay TV providers, broadcasters, cable networks, OTT providers, studios, advertisers and pretty much anybody participating in the business of premium content. 

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The other case in point for this argument is Netflix.  How does such a runaway success company by all measures stumble so badly so quickly?  They are playing in the same uncertain field as everyone else and it seems they tried to get ahead of the FUD, or perhaps were consumed by it.  In any event, it seems they overlooked the importance of content while getting carried away by the subscriber numbers for their streaming service.  Had their streaming library had the same depth and selection as their DVD rental library, I doubt this would have caused as much or even any upheaval.  Despite, the portended demise of physical media, and the lackluster adoption of BluRay while TV viewing and OTT video continues to grow, there is an obvious lesson here that content trumps the medium. 

We are living in a time of rampant innovation in the digital media industry as a result.  Technological forces and shifting consumer demands are stretching the seams of everyone’s business models.  I see UltraViolet and TVEverywhere first and foremost as business models to maintain status quo to access of content by established players while opening themselves to new forms of distribution and mediums at the same time.  The amazing new technologies and systems being developed for these are to ensure that the king does not leave the castle walls without sufficient safeguards.

As a technology marketer it is not that hard pill to swallow as it may seem that good old fashioned content still rules.  After all what it is leading to is amazing technology innovation in video that we have not seen in more than half a century, no matter what part of the industry you’re in.

1 comment about "Content Remains King".
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  1. Dean Collins from Cognation Inc, November 26, 2011 at 9:22 a.m.

    Interesting idea here from Internode (Australian isp) - http://blog.internode.on.net/2011/11/23/exclusive-live-concert-video-gorgeous-festival though feels like recycling of “AOL exclusive content”.

    We don’t have freedom of choice when it comes to residential ISP service here in the USA but if you did…..
    1/ Would exclusive content convince you to change?
    2/ What exclusive content would convince you to change?

    Was the Helio mobile phone tie-up with Spike/UFC a good idea and why wasn’t that enough to keep them alive ?(well alive longer than 2 years before being eaten by Virgin Mobile)

    Whilst maybe creating your own content like the Netflix "Arrested Development" deal might be a bad idea the licensing of known content can be done cheaply, is this a good idea to “differentiate” yourself in the market?


    Cheers,
    Dean
    http://blog.collins.net.pr/2011/11/interesting-idea-from-innovative-isp.html

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