Many years ago, I saw Cirque du Soleil when it first traveled to Chicago for a few weeks in the summer. I was blown away and so the next year when they came to Chicago, I saw them again. I was less blown away.
Now you’re likely to find a Cirque du Soleil troupe performing everywhere in the world, every few blocks, in between the Starbucks. They’re just as awesome as ever, but not so special.
Abundance doesn’t feed excitement, at least not in entertainment. And as OTT content providers really ramp up, an essay from The Diffusion Group’s Joel Espelien takes the provocative view that the explosion of content from online video sites and traditional TV is a great thing that might become a problem.
He calculates that in 2014, there were 199 new, original scripted TV series on pay-TV, and 352 when you combine broadcast and OTT. Espelien says there’s an eight-fold increase in original cable series since 1999. And that’s great for viewers.
But he says, “At the same time, there is an unfortunate reality in economics known as the law of diminishing marginal returns. Business strategies do not work forever, as the most effective schemes are copied and augmented by competitors.
"As this happens, they lose their capacity for competitive differentiation. We may be reaching that point with respect to the original TV series gambit. Do viewers really care about the 47th new science fiction series, or the 57th original series about vampires?”
I think you can sense his answer to the question. But beyond that, I think Espelien says the future belongs marketers and packagers. “Going forward the true scarce resource and competitive differentiator will not be original content, but original strategy,” he writes.
That underlines the brilliance of Netflix as a marketer. It debuts the third season of “House of Cards” on Feb. 27, and Netflix, and that series, remains rooted with the viewing public as a differentiator; it’s the online pay service that sets the bar. It still gets attention.
Whether that’s because it was the first one out of the gate or because “House of Cards” really does represent something bold and new (on American TV at least), Netflix has above-it-all status. Like HBO’s “It’s Not TV” slogan, Netflix positioned itself as the one and only true trailblazer. For younger viewers who grew up with streaming video, that’s a powerful tool.
Netflix says it spent $3 billion on content last year and will spend $6 billion over the next three years acquiring and producing content, and says it wants to be the biggest buyer of original content in the world. Ted Sarandos, the chief content officer said a few months ago he wants Netflix to be launching a new piece of original content every two weeks. Evidently, he’s decided, the glut of new content is somebody else’s problem.