Second-screen entertainment: How OTT is unpacking video feudalism
On entertainment’s asbestos, video streaming and TV run a death-race against time, technology, and a pandemic.
Many are predisposed to the idea that media evolution is an inconsiderate matriphagy- the birth of new media cannot happen without the death of its parents, and naturally, video-streaming will do to TV what TV did to radio. But in believing it, we also discredit years of evidence pointing towards evolutionary adaptation. Radio may have had to shed its exclusivity, but it is still very much alive.
In fact, there is ample contrarian evidence that would gladly dismiss this ‘end-of-an-era’ hypothesis as bogus. Radio exists in a new and viral form- podcasts. In August 2019, monthly podcast consumption increased to 32% compared to 26% the year before. This happened while the number of podcasts also projected a handsome annual increase.
Why is radio relevant? Because the same trend has mirrored itself into our broadcast realities. ComScore openly disapproved of the “TV is dead” fad, and in an entertainment-savvy India, smartphones are spurring (not replacing) the purchase of Smart TVs. The idea is that OTT will not negate the need for TV, it will multiply the number of screens per household.
However, this won’t discount the need for infrastructural competency. Digital media (and subsequently- OTT) has rewritten the diktats of content creation, distribution, or consumerism. And such a change demands in equal parts- development, and sacrifice.
Act II. Scene I.
Among the most noteworthy business pivots for a pure-play broadcast entity was the birth of Disney+. In fact, in a discussion with (acting Executive Chairman of Walt Disney Co. and then Disney CEO) Robert Iger, Bloomberg Businessweek wrote-
Disney+ could define Iger’s legacy. Now 68, he’d been scheduled to retire this year. Instead, as part of the Fox deal, he agreed to stay on until 2021. He professes certainty that Disney+ is the right step. “It feels absolutely vital for us to do this,” he says. “This is, no question about it, the future of media.”
Now, even as a mere 6-month old product, Disney+ has bolstered its quarterly revenue to $4.1 billion (up $3 billion from the last quarter), while the company’s cruises, studios, and parks reel under losses due to the coronavirus inertia. Disney has also bypassed theatrical releases for Artemis Fowl, which will go live (in June) on — you guessed it right — Disney+.
Meanwhile Netflix’s total subscriber base skyrocketed by 15.8 million subscribers in its Q1, 2020 report, with a massive audience injection continuing well until normal life resumes.
If anything, this points to the normalization of video OTT into mainstream media. And as marketing becomes a much more frugal function and ad dollars are siphoned away by digital media, video platforms dig their roots deeper into the ground.
Here’s what the beginning of a not-too-distant Forbes story looked like:
Let’s look at four significant announcements and then put it all together into the story of the quarter:
* Netflix topped their global net new subscriber goal by 80%.
* Disney+, launched on November 12, 2019, topped 50 million subscribers in about 5 months after the launch. Netflix took 7 years to reach this number while Hulu still still falls far short of it.
* Fox, having divested its stake in Hulu when Disney bought their 21st Century Fox unit, turned around and bought ad-supported streaming service Tubi.
* NBCU, on the verge of launching their Peacock streaming service, doubled down on streaming by buying Vudu from Walmart.
These events — and the fact they all occurred in a single quarter — indicate streaming video has hit the inflection point between streaming as an early adopter/fast follower behavior or a niche add-on to traditional TV and streaming as a mainstream element of the media industry.
So strong is the appeal, that despite an overpopulated market, people still await the release of HBO Max and with it — Zack Snyder’s 210 minutes-long version of the Justice League (over two years, several requests, and an entire social media movement later).
Collateral damage.
One of the obvious impacts of this dependence on direct-to-consumer entertainment media is the subsequent erosion of middlemen, and the curtain call for cable TV.
The few cable networks that exist, have had to do away with bundled entertainment instead allowing custom plans for viewers to handpick channels they want to pay for.
On a much more magnified scale it is also unnerving traditional businesses. As the pandemic continues to mount insufferable economic damages, theaters — a near $52 billion global business, have also remained shut for a perilously long time without any relaxations to their statutory bills (to landlords and creditors). But what’s worse is that- charged by a sudden adrenaline rush, OTT is wiping the table off the latest releases, spelling overcast on theaters’ long-term sustenance.
At least 10 big-name Bollywood movies have announced they would bypass theaters releases altogether. And for a country both commercially and emotionally invested in its showbiz, this might indicate towards shifting patterns.
And even when theaters do return to business after lockdown orders are lifted, the general consumer bias towards social distancing and hygiene will only dictate seat-spacing and cost-accruing measures across movie halls. Globally, these coveted centers of art, history, and culture now fear being forgotten even before they can attempt to stage a turnaround.
The cost of a democracy.
Like it or not, OTT has also democratized both content creation and access. For all its criticisms, the internet usually does not discriminate against its audiences. With digital entertainment, audiences will also see a juxtaposition of cultures, equal access to the same resources globally, and content that is more creator-led than traditional broadcast media.
Every time OTT obliterates in-between franchises and affiliate/symbiotic businesses in the media industry, it empowers content creators with a direct access to their target audience. This drastically reduces distribution and marketing costs, thereby reducing the burden of production considerations. It is therefore not a surprise that many streaming platform originals are both exploratory and audacious.
Incidentally, they also need to spend a lot less time in building actor personas to make their shows visible to an audience. In fact, an algorithmic analysis of preference would already do for the audience what broadcast could not do for years with blanket marketing and premierships- build relevance.
That also brings us to the understanding that streaming entertainment is extremely personal and therefore more engaging, while watching linear-shows on TV (due to both its immobility and screen-size) remains a familial/group function.
Additionally, the impositions due to media-buying and the subsequent renting of ad-spaces restricts content and storytelling formats, which is of no consequence to streaming services. This coupled with programmatic digital ad innovations, and the newfound brand inclination towards capital conservation means- linear entertainment will either have to adapt or risk fizzling out as streaming platforms magnetize ad dollars away.
Renaissance 2.0.
All technology comes with an expiry date, after which it is either rescinded from production or is heftily modified and re-packaged. And as is with any free-marketing, OTT’s competition-intense space demands that these modifications be fast-processed.
The future of TV isn’t streaming, it is a superstructure of all entertainment functions consolidated into one. This has already been set into motion with multiple companies eyeing media extensions.
For example — MX Player, which was initially a local video player for smartphones, has grown into video streaming and beyond. It now has live TV, news, sports, a roster of original shows, integrated music streaming, and preliminary gaming on its platform.
If media reports are to go by, the brand is capitalizing on the entire daily leisure life-cycle of its consumer to become a nondetachable experience — a testament to the possibilities when you imagine them.
Flea-market capitalism.
Sidebar. It is also important to note, that with a job market that looks this ugly, and with the economic burden restructuring our priorities, many would also be looking towards clamping down on their leisure expenditures. This is also where the distinctions between AVoD (ad-led video on demand) and SVoD (subscription-led) become important.
OTT platforms today will have to re-evaluate monetization to strike a balance between customer feasibility and profit-making, and might also look at integrating creative brand stories to reduce the burden of the impending fall in subscription rates. But that’s a story for another day.
