As content creators begin to see the long view of curated online content, we’re beginning to see an influx of independently owned video and print offerings. These efforts are in direct response of the influence large scale content platforms, namely Google and Facebook, have had on the delivery of premium publisher content. Unlike these publishers, platforms have not faced the immediate need to turn incremental profit for the content they’re producing. Instead, by aggregating and hosting content of all genres and qualities, platforms are building an experience and an audience that will return a profit over time. Publishers on the other hand, have for the most part, still relied on the content they produce to deliver immediate returns that fuel future production.
As the internet has widened the breadth of content available to consumers at any given time, the attention available to view this content by publisher has waned. The net result has pushed publishers to find consumers where they already are online rather than just purely drive them to owned platforms. In the case of both print and video publishers this is often traffic driven by Google or Facebook. Similar to their analog counterparts, Google and Facebook both garner a profit for housing content from other publishers. However, there is no distinction on these platforms to drive traffic to any one publisher, but rather to whatever content is trending at a given moment in time. This means that while the most popular individual pieces of publisher content, housed on these platforms, will drive a wave on incremental impressions it is unlikely that the same users will continue on to additional articles or videos from the same publisher. A similar story can be told of linear like SVOD providers that have carried premium publisher content. For SVOD providers like Netflix, a deep library of content of varying genres both drives the acquisition of new customers while hedges to retain customers in the future, alleviating the immediate need for hit worthy content. Anecdotally this can be explained by the number of Netflix originals that can be named in popular culture, or in fact the lack thereof considering the company’s level of investment, so effectively whether or not a given subscriber is a fan of the latest release there is enough supporting content to keep them as a return viewer. Pivoting off of this model, upcoming DTC services like Disney’s Disney+ and NBCU’s Peacock will use their platforms in a similar manner. This includes the promise of releasing new originals through these platforms, while having the confidence that if these originals do not lead to immediate viewership they will be supported by a deep library of iconic brands. Already this year, NBCU’s Peacock service has been announced as the new home for content that was meant for its linear counterpart. This trend of content sharing will most likely continue as these networks leverage existing intellectual property across platforms. The epitome of which being Disney’s Disney+ service, which will at its launch house decades worth of content from the publisher’s various owned studios.
These platforms therefore are a hedge against attention garnered through third party platforms in which traffic and ad revenue is shared. The seemingly rapid release of these DTC products and ever fragmenting delivery of content has led to a mix of delivery models but also a mix of opportunities for advertisers. Moving beyond a Netflix, which for now purely derives revenue from its subscriber base, we find a series of business models used to fuel content delivery. Some of the biggest and newest entrants to this space, like Amazon, Apple, and Disney, are leveraging their subscription video offering as an anchor for bundling subscribers into their larger ecosystem of products. Notably, Apple’s Apple TV+ offering builds on the brand’s ever growing bundle of services that now drive their ubiquitous mobile devices. Therefore, just like Amazon or Disney, the Apple TV+ service does not need to derive a profit on its own but rather it serves as a support system to fuel the core business – in this case selling more phones. This can be seen in the announcement that Apple will be offering a free year of its Apple TV+ service to buyers of any new device, which at about 200 million iPhones sold annually creates a large sample of trial users, keeping 25% of which would remain competitive with any premier linear offering currently on television. With this purpose in mind however, it is not clear if they will be selling any additional advertising through these services, or at least not in the traditional model that replaces linear impressions. This is then where the next series of DTC video platforms, created by linear providers, then shows promise for additional inventory possibilities. Ad supported linear content providers like NBCU or AMC, are leveraging their platforms as an opportunity to reach incremental audiences that have been lost to cord shaving. As a result these services will still be at least partially ad supported, with commercials served in a traditional linear format. Finally, niche players like sport or genre specific offerings, serve as an opportunity for companies to arbitrage licensing agreements.
The narrative of streaming fatigue continues to persist given the number of these services announced in just the last year. The number and mix of services that consumers is still yet to be seen, but what seems apparent is that the consumer’s reliance on curated platforms is unlikely to wane. Social platforms, as an example, are responding to this trend by creating more multi-faceted products. TikTok, a short-video application built on user-generated content, being the latest example of this directional shift. When a user watches a video on TikTok, they can then tap a button on the screen to respond with their own video, scored to the same soundtrack. Whether or not the viral success of the app is sustainable is still to be determined, as well as it’s viability as a brand safe platform for advertisers, it has served as an early model for how social platforms may attempt to form a more community based platform as user attention continues to fragment. In addition to these user-generated based content opportunities, some platforms are answering the vacuum of pay-wall content with their own curated pages. Facebook’s “News” tab being an early entrant into this space, offering an opportunity to curate premium specific periodical content. Outside of platform based distribution, premium print and editorial publishers continue to merge to form greater consortiums of content. While these merged brands, like Vice Media’s recent acquisition of Refinery29, still do not cumulatively add up to the reach of a larger social platform, they are successfully building targeting capabilities by widening their immediate user base. Eventually these models will most likely reflect those of linear television, where advertisers can approach a grouping of networks to find scale to target users via a private and premium marketplace in order to serve addressable advertising. This splintering of consumer behaviors comes as a result of an increasingly fragmented landscape, with the opportunity to have a more targeted social experience depending on the niche. Moreover, consumers are placing less value in the classic social media experience of likes and shares in favor of what has the potential to be a more authentic community built around specific interests and needs.
This new form of community aggregation are continually forming additional means for advertisers to place ads in front of users where they are going organically. These ad opportunities will therefore need to adapt to user needs and platform formats, as in earlier social platform iterations, with a renewed focus on brand sponsorships, influencers, and the ability to leverage the new fundamental capabilities of these platforms. The upshot being that most of these emerging social platforms call for deeper engagement with users, giving advertisers an opportunity to continue to create and iterate on more interactive and engaging ad formats.
