READ MORE: THB #104: 6 Truths About Streaming (The Hot Button)
There’s a lazy line of argument that says legacy media and big tech players in the streaming wars are all wannabe Netflixes. The thinking goes that whether you’re Disney, Paramount or Apple, Netflix is the target, and becoming more like Netflix is the best strategy to outstrip Netflix.
David Poland, a media analyst writing in The Hot Button newsletter on Substack, says this ain’t so.
“It’s almost funny to watch these power players aspire to something they cannot become. And it’s not, as some assert, that Netflix is the leader in streaming and can never be caught. That is just silly. How the others get to similar numbers — and I believe they absolutely can — will be through different strategies than Netflix used.”
Every other major streaming company has been built out of an existing business. And that includes Netflix’s origins in the DVD rental and postal business.
“This difference has been pointed at, almost universally, as a severe handicap to every other streamer,” Poland notes, when in fact Netflix is carrying a millstone around its neck, too, a “different millstone than anyone else’s.”
He elaborates: “What Netflix created, as it turned out, made more sense for legacy media than it actually did for Netflix. If a significant part of the on-demand world is and will always be library content, who is best suited to success in that model? The legacy media companies.”
CHARTING THE GLOBAL MARKETPLACE:
Big content spends, tapping emerging markets, and automated versioning: these are just a few of the strategies OTT companies are turning to in the fight for dominance in the global marketplace. Stay on top of the business trends and learn about the challenges streamers face with these hand-curated articles from the NAB Amplify archives:
- How To Secure the Next Billion+ Subscribers
- Think Globally: SVOD Success Means More Content, Foreign Content and Automated Versioning
- How Does OTT Gain Global Reach? Here’s Where to Start.
- Governments Draw Battlelines To Curb the US Domination of SVOD
- Streaming Content: I Do Not Think You Know What That Word Means
After a few years of licensing movies for almost nothing, Netflix first raised the price point for content in year-long and multi-year deals with companies like The Weinstein Co. and Relativity Media. Then, as those deals led to bigger suppliers wanting even more money, Netflix decided to build its own library and has spent around $100 billion on content in less than a decade to get there.
But legacy media don’t have to spend to build an archive. What’s more, there are other reasons they need not follow Netflix’s subscription-based and increasingly internationalized approach to market share.
Poland points out that AVOD (ad-driven on-demand) demonstrates to streamers that they can build an “unexpectedly robust audience.” Second, he says, it has turned out that internationalizing television is a lot more complicated than it first seemed — for everyone. Meanwhile, linear media is dying a lot slower than expected, prolonging the TV business.
All the major players — Disney, Warner Bros. Discovery, Amazon, Apple, Paramount and Comcast — are considering multiple strategies. Amazon, for instance, is buying live sports rights and Apple has just joined them, teaming with MLB for Friday night games.
“What Netflix created, as it turned out, made more sense for legacy media than it actually did for Netflix. If a significant part of the on-demand world is and will always be library content, who is best suited to success in that model? The legacy media companies.”
— David Poland
He thinks Disney “just need to up their game and present a united front” when it comes to Disney+ and Hulu. “Disney needs the combination, whether it’s called a bundle or not, to make enough month revenue per sub to make this work for them, especially as cannibalization of their linear business speeds up. Hulu is a lot more like Netflix, conceptually than Disney+ is.”
AT&T, he says, is betting big on David Zaslav being prepared to succeed in the biggest job of his strong career, as he steers the new Warner Bros. Discovery brand.
“Paramount is a bit of a blur, feels like it’s getting better, but most of the media feeling about it driven by the mistakes around distributing Yellowstone and spin-offs… Comcast has not much sexy happening. Universal is the most strategically consistent full-service studio. NBC seems to be turning into CBS of a decade ago, with no strong voice under 60. Peacock is still unable to launch a hit. And Wall St. media is still obsessed with them buying Paramount or some other studio to no clear end.”
The point is all these companies come to the streaming evolution with a different set of strengths and weaknesses.
“The worst thing for any of them is to chase anyone else’s success. We are too early in this cycle — except for Netflix — to be playing the game that way and winning.”