Streaming With the Major Media

The challengers are disruptive because of their reach, traffic, and viral user base. If they can leverage their core competencies and traffic to offer valuable video products and services, they can pose a real threat to large media companies that have chosen to keep content behind walled gardens or on destination sites and nowhere else.

Predictions
At my presentation in May, I made a few predictions about the major media and streaming that still hold water and that are gaining some support in the marketplace. There are a few other predictions that are yet to be tested.

We will see many more partnerships between the incumbents and the challengers. The reason for this is that neither video property can be truly successful without the other. For example, user-generated content is great, but it often doesn’t have a clear business model attached to it; high-quality branded content can be monetized, but if it is left on destination sites it may not reach the full potential offered by the internet. Partnerships provide a happy medium for reach and revenue.

Users will always seek out content from ESPN and MTV, but in a world with millions of internet channels, there might be too much noise and distraction for a user to arrive at a destination site. Quality content will rise up and users will find it, and if brands can make content available to them at locations where they spend a lot of time already, they remove a few steps for the consumer.

Individual relevance is the Holy Grail in the streaming game. By individual relevance I mean some combination of localized, personalized, and individualized content that is easily found by a user who is looking for it. This doesn’t necessarily mean that a user sets preferences and a zip code and gets content that a database thinks is relevant. Individual relevance comes from a combination of high-quality branded content and content that’s generated and filtered by user communities—communites defined as much or more by shared interests and values than by geography.

My final prediction is that we will see a lot more leverage for the independent producer and more money being spent on multi-platform pilots by the big brands. In a world where an independent producer can create an asset on the cheap and then self-distribute that asset, the need for middle-men goes away. This gives an independent producer of broadband content more choice when it comes to distributing content. They can partner with a brand or they can distribute the content themselves.

Right now, the big brands can buy inexpensive broadband content because producers need the credibility, distribution, and marketing power of the brands. As producers get savvier, they will realize the value of holding onto their rights. This will inevitably increase the value of broadband rights and give producers more leverage in negotiating with big media companies.

As the value of well-produced content on the internet becomes more apparent, production budgets for streaming content are starting to grow. Big brands are spending more time and money on creating stories and experiences that are intended for streaming on the internet. Most big media companies have both television and internet properties. It is in their best interest to leverage multi-platform production and create products that can be monetized on every platform. With quality as the key differentiator for the big brands, pilots and shows will be created for the internet with bigger budgets and bigger hopes for high returns.

In future iterations of this discussion, the line between incumbent and challenger will certainly blur. At every stage of an industry-wide shift, disruptive forces change the market landscape and advance the industry into the next phase of its development. Some may already consider the entrants to be big media companies, and the big media companies to be internet companies. A blurring of the lines between the two will ultimately benefit consumers as well as the media players themselves.