In the span of three days, both Netflix and Disney made interesting announcements that speak volumes about the current situation in the entertainment media industry. There is a lot to cover, but I will be brief.Something changed in the last 10 years, due to the mobile and digital revolution. Traditional global marketing strategies that have been working for decades started to fail and new patterns emerged in customer behaviour. We now live in a digital dominated world. Decades of internet
One of the major differences between internet (regardless of how you experience it – desktop or mobile) is that almost everything is measurable and this killed traditional advertising. Banner blindness is a scientific fact and users are now allergic to any form of interruption to their content consumption experience.
This behaviour translated to entertainment media as well. Traditional TV, the asynchronous, mono-channel model, is dying. If you look at the numbers, all major US networks lost viewership in the 2016-2017, with the exception of NBC and Fox.
But if you take away sports, both NBC and Fox actually lost viewership on the rest of their content. Where did all these viewers go? Mostly to their mobile screens. Certainly, to Netflix, Hulu and Amazon Video.
With all this premise, let’s talk Netflix and Disney.
Netflix already upped its game, upping its spend for original content to the whopping sum of 6 billion US dollars (2017)., here. Netflix knows that the on-demand digital model works. Better than the traditional one. There is one thing users want, and it’s content. Which is why, even in this age where the world is dominated by Amazon, Google and Apple, companies like Disney can thrive, thanks to their content library.
Netflix needs one thing: paying users. They already have millions (the company is valued at $60billion) but the business model requires for them to grow. In order to do this, they need to always be at the top of the content competition. They need more licensed content. But that’s a dangerous game. Disney
Disney just reminded Netflix of that. Disney knows that content is what users want nowadays. They want direct access, on-demand, no interruptions, no limits. Disney’s library is so massive that it only makes sense for them to create their own service, targeted to families. This is why Disney announced they were not going to renew their license with Netflix after 2019. Note that we are talking only about movies. Marvel series will stay on Netflix (no surprise here – they were developed by Netflix).
Remember what I wrote about sports being the decisive content for US networks viewer numbers? Disney knows that too. Which is why, before films and animated series, they are going to work on the ESPN offering. Digital companies are increasingly getting control over sports broadcast. Amazon already bought exclusive rights to ten NFL Thursday nights. One day Amazon or Google (or Disney?) will buy exclusive rights to an entire season.
Netflix certainly wants to keep the amount of licenced content as high as possible. But it’s risky. Which is why they need to produce more original content. Also, thanks to the data they collect, they are also able to commission content that will target specific audiences. And bear in mind that this doesn’t mean producing a “House Of Cards” for every segment. Smaller productions are equally good when targeting niches.
In this light, it’s obvious why Netflix acquired Millarworld, the comic book publisher that created the comics Kick-Ass and Kingsman. And while the deal did not actually include the rights to these two titles (which probably still sit with the respective film producers), the reasoning behind it is clear: “let’s do with Millarworld what Disney did with Marvel”.
These two announcements make something clear: digital is the field where media entertainment game is going to be played. The gaming industry is already the biggest entertainment industry in the world (they beat the film industry years ago). And now digital is eating TV.
A suggestion? Write a TV spec script!
