The Shows, Movies are Great Now Make It Easy on Us

Content Insider #920 – Reinvent

“You look down, they know you’re lying and up, they know you don’t know the truth. Don’t use seven words when four will do. Don’t shift your weight, look always at your mark but don’t stare, be specific but not memorable, be funny but don’t make him laugh. He’s got to like you then forget you the moment you’ve left his side.” – Rusty, “Ocean’s Eleven,” Warner Bros, 2001

There used to be home entertainment “rules” you could count on and expect back in the linear TV days but streaming turned it all into utter chaos and we don’t know how to say it nicely but…jeez folks, it isn’t about you, it’s about us the viewers!

Spring/summer TV was a period when the networks reset themselves and focused on which shows would stay, which were being replaced, committed to new projects/series, cranked out the pilots with the first few shows and got ready for the Fall grand unveilings.

When a show was cut from the schedule it was cut, replaced … done and done.

Anything that had outlived its usefulness (slipped the Nielsens) had a new project in the wings, that hopefully would impress the viewers.

Fall was celebrated with new (and old) series rollouts, sports took their rightful place in the schedules to beef up the audiences and ad coffers, and a new roster of movies that performed well at theaters but needed to earn more were slotted into the schedules.

Folks involved with shows that were greenlighted a year or two before they hit the schedules could count on steady work for at least nine months and if the show was renewed…

You knew what network had football, basketball, futbol, hockey; and you already knew whose ads you were going to see.

You looked forward to seeing last year’s – or the year’s before – theater winners on your home big screen because studios wanted to squeeze out every last cent of profit possible.

Streaming changed all that.

Suddenly, everyone was in the pool all at once with everything.

Steady Growth – While streaming video has reached peak penetration in North America with an estimated 83 percent penetration rate, there is still plenty of growth opportunities globally.

While it doesn’t come as a shock to anyone in the industry, with more than 300 M subscribers, Netflix is leading the pack when it comes to global subscribers and has developed an add, subtract, multiply, divide content formula that fellow tech-based streamers understand and networks/studios are struggling to understand and emulate.

They were late to the buffet line when it came to adding an ad-supported tier, but they made up for it and has moved quickly to ensure it paves the way for the streamer’s increased profitability.

But it took even more meaningful action…Netflix dug deeply into their viewer data analyzing shows, genre and variety that kept people involved longer; increased ages/viewing times/screen data; and more.

The data undoubtedly played a key role in their acquisition of game IP and projects to expand their reach and connection with younger members of households.

This has assisted them in developing a continued flow of new game-based movies and show series that are increasingly produced outside of the US to cross-platform lines that can be both interactive and immersive as well as passive visual content for any screen.

Viewing – In many regions of the world, the smartphone is the most used communications and entertainment device.

The goal, which Amazon Prime and Apple TV+ have also understood, is to develop a strategic balance between popular source material and a visual story that works across all screens.

Digging back into their earliest, most primitive numbers, Netflix and Amazon found that their key target audiences – never cable/cut cable – had never been exposed to linear TV’s series or they had long become distant memories.

In other words, the old was suddenly new again.

Shifted – Linear pay TV networks have cut back significantly in their development of new scripted shows as streaming services acquire new and existing projects. Many providers are also shopping some of their unscripted shows.

That’s right … everything old is new again!

Netflix probably knew that all along but overlooked the experience Ted Sarandos had learned in the early days with Reed Hastings when money was at a premium and the safe investments in studio/networks “retired” series was the best.

Folks signed up with the fledgling service for a lot of stuff they had missed – or never seen – free of ads.

It wasn’t until series like House of Cards and Orange is the New Black caught on that people really took the new home video services seriously.

Apple, which has long been touted as knowing what customers want before they want it – took four years to realize they had passed on a real audience winner and have finally renewed Ted Lasso after a four-year hiatus.

The old crew is happy to get back together and now we have to see if the old audience returns and brings along new subscribers…we think it will!

FAST Enjoyment – While Gen Alpha and late Gen Z consumers are often overlooked as entertainment prospects, they were born in the digital age and free is especially appealing to them.

Of course, all of the streamers – including the legacy studios/networks – could have gotten a better handle on the audience’s hunger for nostalgic or never-seen series/movies had they looked across the spectrum and studied the quiet – and increasingly profitable – growth FAST services were having.

Pluto and Tubi grew slowly, steadily and increasingly profitably by setting up genre channels of content like drama, romcom, horror, war, cops/robbers, sci-fi, western as well as long running daytime and evening TV series.

Roku’s Anthony Woods struggled in the early years when he founded the company in 2002 to prove to Wall Street that what the viewing public really wanted wasn’t services free of ads but rather a range of free channels to peruse and watch in a single connection.

Today, Roku, Tubi, Pluto and other FAST services have become the viewing homes for local news and community interest programs as a way to profitably reach people who have slashed their expensive cable bundle connections and still enjoy familiar content.

All with a whole lot fewer ads!

It has taken time, but consumers have found that there is a place they can go to, enjoy old/new shows and not be overwhelmed with ads.

The only folks who don’t really know what is going on with the fast growth of FAST are the rating services that really only track and report on viewer activity that pay them.

It falls to the FAST services to document and hype the success of their services during the annual TV Upfronts and it’s tough to convince national advertisers that your numbers are real when you’re the one developing/presenting them.

The markets where they’re making the best headway (albeit slowly) are in local/regional markets–wherever they’re making audience headway, regardless of the country.

But … that ain’t easy.

Streaming advertising – which is often automated – is extremely complex–even for seasoned marketers.

Most people understand – or at least accept – the concept of CPM (the cost to reach 1,000 viewers); but in the new arena, advertisers have to understand (really understand) who their core customers are, what they buy and why.

And we’ll repeat … that ain’t easy–especially for the global streaming services that are constantly on the search for the next big unanswered audience viewing winner(s) that will appeal to people around the world and not just in their home country.

Festival Fare – While Netflix, Amazon, Apple and other streaming services like to commission (and control) their own shows/movies, they are also present at film festivals around the world in search of projects that will resonate with their audiences and perhaps even help them earn another statue for their showcases.

They spend a lot of time, energy and money before the major and minor film festivals looking for that surprise gem that is going to earn them 10-30K more subscribers. They hope that it will draw people in and give them the “opportunity” to discover/explore all of the other content and stay rather than view and jump to another service.

Yeah, churn sucks but it’s also inevitable.

Cable folks never really worried about it when they had a big (expensive) bundle of damn near everything that was out there. But phone services have known churn is a fact of life ever since Ma Bell was broken up back in 1984

Of course, according to our daughter, it didn’t become a thing until Apple released the iPhone.

And as we noted earlier, today the smartphone has become the entertainment screen – as well as the computing/communications screen – for people around the world.

That near universal screen selection – and deeper dive into their subscriber data – may have been instrumental in Netflix (followed by other streamers) discovering the latest viewer trend … animation/anime.

Animation Rises – While older age groups have been most attracted to drama, action/adventure and horror video stories; the generation that came of age during the digital age have a real affinity for animated shows and anime. And it’s catching on with older viewers as well.

In a move to manage costs, meet local content requirements and broaden their global subscriber base, Netflix tapped into the rich history and experience of the Asian creative community. They quickly discovered that animated stories based on historical stories and figures in China, Japan and South Korea didn’t just appeal to APAC viewers but people around the globe.

You can rightfully argue that Disney with their rich Pixar, Disney animation studios, and Marvel vault should have already known this, but their projects were doing very well in theater showings and providing a solid ROI especially when they were extended into their global parks.

Of course, they and the US creation studios got a rude awakening when China unleashed Ne Zah 2 which rocked the industry at its foundation, grossing over $2B worldwide and counting and clearly surpassing Disney’s Inside Out 2 which only racked up $1.7B.

Suddenly, there was a new creative center that could compete for audience attention everywhere.

The only problem is convincing Shanghai, Hengdian and the other China-based studios to release their projects to streamers for their audiences since they (and especially their government) are wary of US-based relationships.

While the streamers deftly work to negotiate their way around the Washington chaos, they turn more of their attention to the global audience with projects from Japanese and South Korean studios. They’re also exploring new animated and other genre films/shows from EMEA, Latin/South American, Australian and New Zealand studios.

But the major issue/challenge to streaming isn’t the volume/variety of content available with the services but a fast, easy way to find just the film/show you want, when you want to watch it without having to jump from one service to another.

With an almost infinite number of entertainment choices across subscription, ad-supported and free services, they compound the problem by not coming together and developing a common/centralized discovery location where people can scan the listings of their services to find the film/show they are in the mood to watch … now!

All to frequently, they simply give up out of frustration and … settle.

Right now, the services are providing a disservice to subscribers. It only encourages them to add to the churn that hurts them all.

We understand the situation when Rusty in Oceans Eleven made an indirect observation about bringing everyone together in a common portal and said that it’s, “Slightly more complicated than that.”

All the streamers have to do is follow Danny’s suggestion, “we’re going to have to be very careful. Very precise.”

The streamers need to join in the effort because they’re not simply competing against each other, they’re up against what the all-purpose video stuff pool, YouTube.

YouTube – which is the last place we think of when we want entertainment, routinely has 11 percent of the TV audience while Netflix has 8.5 percent and the other services have even less.

When a centralized entertainment portal is available, we’ll be able to focus on our four ad-supported and two free movie/show services and enjoy them even more.

We’re pretty sure most other streaming viewers would do the same and be even happier with the stuff they watch on their screen(s) of choice.

Andy Marken – andy@markencom.com – is an author of more than 800 articles on management, marketing, communications, industry trends in media & entertainment, consumer electronics, software, and applications. An internationally recognized marketing/communications consultant with a broad range of technical and industry expertise especially in storage, storage management and film/video production fields; he has an extended range of relationships with business, industry trade press, online media, and industry analysts/consultants.