On Friday morning, executives at Turner Sports and parent company WarnerMedia likely thought they had a hit on their hands. The company had been teeing up a special pay-per-view event: a one-on-one golf match between Tiger Woods and Phil Mickelson, with the winner taking home a cool $9 million.
The event -- which Turner was selling for $19.99 through pay-TV providers and directly to consumers through its streaming video platform B/R Live -- looked like the future of live streaming: a one-off event sure to excite golf fans, with the added bonus of some built-in wagering opportunities.
Then the event kicked off, and things went awry. A technical problem hit the paywall page before the match, and people who paid for the event ahead of time were unable to tune in. Turner ultimately streamed the entire event for free on B/R Live, refunding those who paid and foregoing that revenue.
The incident serves as a vital lesson for media companies looking to enter the streaming video business: the product matters just as much as the content.
For technology-driven video companies like Netflix, Hulu, and YouTube, the product is the platform itself -- the delivery mechanism for the content. These companies have engineers that number in the hundreds (in the case of Netflix and YouTube, in the thousands) perfecting it, iterating it, and improving it.
Next year, Turner’s parent company WarnerMedia will launch a major streaming service, as will Disney and others.
These media companies know content (the Mickelson-Woods match was great content!), but they lack the experience on the product side that the tech players have built up over time.
Media companies have responded by trying to buy their way in, with Turner buying iStreamPlanet in 2015, and Disney buying BAM Tech earlier this year. These companies certainly have experience building viable streaming video platforms, but with far fewer products deployed than the tech-driven competition, they have a long way to go to catch up.
A reliable criticism of Netflix is that the company has conditioned consumers to expect an ad-free experience in streaming video. It is a valid criticism! But Netflix, with its thousands of engineers and relentless iterating, has also conditioned consumers to expect their streaming video to “just work.”
Netflix delivers HD video fast and on-demand, with few, if any, interruptions. YouTube is the same way. When one of those services goes down, it makes national news, because it happens so infrequently.
Then there are the recommendation algorithms, which have become expert at determining what viewers will want to watch next, and the easy-to-use interfaces, and the smart search functions.
When WarnerMedia and Disney launch their streaming services next year, the burden will be on them to try to match that experience, or at least come close to it.
These companies know how to produce truly incredible content, but if consumers find the experience of getting that content challenging or unreliable, they may tune out for good.
Content may be king, but the product has real power.
Expecting an ad-free experience may be a reliable criticism, but only from those who forgot why commercial interruptions came along 90 years ago in the first place. No one wanted their content interrupted. No one likes unsolicited advertising, targeted or not, creative or banal. Spot ads and program sponsorships were the ONLY way for producers to recoup their investment until the arrival of the internet. Before that addressed connection, radio and TV had no idea who received their free signals so they replaced a physical box-office or newsstand with advertising, at least in the U.S. Ads were absolutely necessary to fund the programs. But nowadays people can pay subscriptions and apparently they love the choice. Televised commercials, sight-sound-motion, may be the most effective form of delivering advertising but they are still about as welcome as ants at a picnic. Millions of mute buttons can't be wrong.