As more and more consumers shift their viewing habits to streaming and over-the-top platforms, the opportunity for content providers is expansive. The only problem? Technology giants like Amazon and Apple and streaming video juggernaut Netflix are outspending just about everyone else on content.
Netflix is set to spend as much as $8 billion on content in 2018, while Amazon and Apple are expected to spend billions more than their
Legacy TV and media companies hoping to retain the linear TV leadership they have in a new digital world are betting on two things to stay competitive with
the tech giants: a focus on quality and the power of branding.
“[NBC] is a brand name, everyone knows it, and I think we will do just fine alongside these
giants,” said NBC Entertainment president Bob Greenblatt at Business Insider’s Ignition conference. “We are never going to compete by spending more than they are,
obviously,” he added, noting that NBC will spend “well north” of $1 billion on content this year -- a significant sum, but less than streaming competitors.
“We just have to do shows that cut through the clutter, more ‘This is Us’ and ‘The Voice’ and things that really penetrate the culture,” he added. “I am in the volume business, others are in the super volume business."
If you can’t compete on pure volume, focusing on a single brand is a powerful alternative. As HBO CEO Richard Plepler also said at the conference, a powerful brand sends a signal not only to potential subscribers, but to content creators as well.
“Brands, amidst all that clutter, matter more than ever,” Plepler said.
“People [tell] me all the time, well Netflix is spending X amount of money and Amazon is spending this amount of money and Google is spending money, everybody is spending money and competing,” he added. “It’s all true, but our brand means to us the curation of excellence, and it also means that producers and writers and actors understand that it means something to be inside the HBO family.”
Indeed, the feeling among many legacy media executives at the conference was that, ultimately, curated quality programming from these trusted named will eventually win out against overwhelming content spend from tech giants.
“if you flood the market with so much content so that they don’t unsubscribe, then at a certain point they get that sort of stress of choice,” said TV host and producer Chris Hardwick. "Not all those shows are going to be great, and if you watch enough stinkers, you may think oh, this isn’t that great anymore, so I think you really have to focus on quality over quantity.”
Others, meanwhile, are trying to zig while the rest zag. Discovery Communications is largely forgoing expensive dramas and scripted programming to focus on its less expansive reality and unscripted fare.
Discovery CEO David Zaslav called the big-budget scripted OTT world an “extremely competitive and over-served marketplace.”
“There is a whole bunch of media players playing in that space, and I think it is quite challenging,” he added. “I don’t know if there is a bubble, but I think there is a scale question.”
The problem to be solved is not a small one. Consumers love video, but will they stick with beloved brands? Or will the lure of seemingly unlimited content win out?